Investor Strategy Call- September 27, 2021.mp4

 

Investor Strategy Call- September 27, 2021.mp4

Speaker1: [00:03:27] Hello. Ok, we see we have more. Yeah, we have plenty, we have more members that are reasonable common people than in clients. So let me see. So we have one matter. I’ll bring you to the panel as well. Matter. John, I’ll bring it to the panel because Joanne, later, I’m going to just show you how this works. So I’ll bring it to the panel just so because later I bring you up when I see we have question up, Dale. Yeah. So we’re just getting started. Maybe it’s a quiet one, but Abdul, we’re here. If anything, obviously. And then matters of financial analysts, you can talk deep about finance as well.

Speaker2: [00:04:09] So.

Speaker1: [00:04:27] And we’re just going to wait a bit if you have anything that you can feel free, but either way, we’re going to wait for a couple of minutes to see if anyone joins or if anyone else had any questions or we’ll just stick around. Yep, I saw your raise your hand there. Yep. Bring it to the panel.

Speaker2: [00:07:19] Ok, so it kicked me out, but bringing back in again, so. Do you have a question, though? Do you have a recommendation on some marketing funds centric or focused marketers that you work with or recommendation that you can share?

Speaker1: [00:07:41] Yes, I do. I definitely do. It depends on the check size, but so what is the. So this is for the what the $100 million fund, right?

Speaker2: [00:07:54] Yeah. So so we we we we had a soft launch. We had a launch technically, but it’s a soft launch with some private investors right now. We’re getting good response and we’re looking at maybe scale up and looking at different marketing services to help drive that for our D and then down the road. Got it.

Speaker1: [00:08:24] Minimum investment is what it’s like five hundred thousand or two hundred thousand or something.

Speaker2: [00:08:29] Yeah, that investment is a quarter million to fifty. But we have we have we have the discretionary decision that we would. We would accept we would accept 100000 and up.

Speaker1: [00:08:48] Ok, got it. Yeah. I mean, there’s this company that yeah, there’s one company that we recommend. We’re not affiliated at least yet, but we’re not affiliated. But yeah, there’s one marketing company. They have one hundred percent success rate, according to what they say. They’re not cheap, but they they they say that they have 100 percent success rate. Let me see just a second. Let me just get the name of them, but I can also, obviously, we can also introduce you. Let me see.

Speaker2: [00:09:16] Yeah, because if we can invalidate that, we would love to talk to you. We’ve been, we’ve been, you know, we’ve been talking to a few and we have we have not made a final decision yet, but we’re just trying to see what’s available out there and who else but our partners have worked with in the past. This is this would be likely a campaign that will go for, you know, maybe six to nine months.

Speaker1: [00:09:43] Ok. Yeah, like the one? Yeah, this one is probably the one that will fit because like if you want to go all out and this is the best one we know is just that. Yeah, for the check size is large and you want to do marketing in that sense, then because what they’ll do, they’ll they’ll send traffic right to your like, they’ll build you the everything and send traffic rights to it, and they’ve done it before it. Let me just dig up the. Or better yet, yeah, I’ll just make an introduction. I’ll just make a quiet introduction. And then afterwards, when I get the name, I’ll post to everyone and then fill them out. They have a monthly retainer. They don’t do percentage based on success or anything.

Speaker2: [00:10:22] Yeah, yeah, yeah. No, for marketing. For marketing, we wouldn’t have that percentage is the retainer. I mean, it’s marketing service. Yeah, right. That’s the point. I mean, it’s it’s it’s usually monthly, but other things on a smaller scale. But we want to see what they’re doing and it will validate what they say they can do, obviously. But we’re getting ready to to do more due diligence on a few other ones we’ll be talking to. I think we might have maybe a slut or two to look at then. And then from there, make your final decision.

Speaker1: [00:10:55] Nice. Yeah, we’ll get you. We’ll get you this option. And then if you want a guy, so we’ll do that. We also have a guy that is if you want to do things that are more in-house, we have somebody that can manage the any Facebook ads or anything like that for investors in particular. That’s if you want to be more kind of in control. But yeah, we’ll send you both of the options and then, well, yeah.

Speaker2: [00:11:15] But yeah, without the ocean, definitely. But in-house, we definitely want to take a look at what it was like in the event this past weekend. And we’re getting really, really good response. And I think the social media part because we actually launched two funds a social impact fund and which is a 75 million dollar fund and then the Rec D, which is a high yield income fund. And so that’s been a really good conversation. And I think, you know, we want to see both options and see what’s available. It’s a little bit specific, but we don’t want to be, you know, hey, it’s fun for all, but it’s very, very specific to do the type of investors. We’re working in equity investors and qualified investors, and then they’re not credited for the impact fund, which is the right way.

Speaker1: [00:12:12] Ok. I mean, you got the yeah, because you got the demographic down for reads, for reads qualified and not accredited for a book that makes sense. And how is he? And is there any any plan just curious, is there anything with the whole go public side of things or you’ve got that sorted out or?

Speaker2: [00:12:34] No, no. That’s something that might come down the road. I mean directly the way it’s designed exit or at the end of the lifecycle of the fund, we can we can, we can, we can exit with it. That’s that’s how two-plus. That’s what we tell to Tier two. Yeah, Tier two, that’s what we selected for that, for many reasons. But also, you know, we don’t think we do. It will outperform it. And the beauty of that, too, is it could have a meaning. You can have a reverse exit with a right, whereas it really is paying out five percent, six percent. We’re looking at we don’t we’re looking at projects and deals that are projecting net 18 percent return. And so but there’s a couple of things we’re looking at. But it will help to circle if you have incorrect or anchor, investors ought to partake that way. They receive a better class of shares, whereas they would get 10 percent preferred versus eight percent. And depending on the discussion, maybe. Other, you know, other other stuff we could talk about or what they’re looking for, but having you know in that space the way we designed, especially for the especially for the red reggae, if they wanted to come in and partners, they have a greater chance to target that 18 percent, 20 percent return with our, you know, of course, with our cooperators or sponsors we’ve invested with in the past.

Speaker2: [00:14:14] And these are these are, you know, these are real validated members that are public, but also things we’ve we’ve we’ve vetted. And so, yeah, we still have a few things, more things coming up. I mean, we launched the website. The website is live, actually put it in the chat and. Uh, which? But yeah, so. Yeah, yeah, so, yeah, it’s a pretty clever chat, but also we have this call was trying to find a way that was just posted. It just posted recently, but maybe put on the. Yeah. So. Well, I guess you can post you can post the we have a flyers, too, but I guess you can say this here. Yep. It won’t allow me to send the flyers, but I don’t know. Oh yeah. So. Well, it should be.

Speaker1: [00:15:41] These are the paper icon, it’s like it looks like a piece of paper I think you can upload their.

Speaker2: [00:15:47] You see it.

Speaker1: [00:15:49] Yeah, like a sea lake. Like, there’s like there’s like a picture of like a piece of paper.

Speaker2: [00:15:56] Yeah, yeah. So yeah, so that’s yeah, that’s our yeah, that’s our. Maybe I’m missing from my end, because I can see maybe. Maybe you can see it. I don’t see it. So nonetheless, so. You are saying.

Speaker1: [00:16:21] Yeah, no, we’re just talking about the, you know, getting the website up, and at the end of the day, like really, really it looks like you’re amenable to either working with like just, you know, you seem to be amenable on the terms, but they seem like the investors for the reggae will probably get a better deal if they come in a bit earlier. Is what you’re saying, right?

Speaker2: [00:16:43] Well, I mean, for insufficient or if I was a qualified both industries, additional capital or other capital, if they are coming in and you’re writing in multiple multiple, you know, seven figure check into the fund, you know, definitely. There’s just the same way when we with our with our operator and our partner that we work with, we if you look at the card we negotiated so that we don’t pay management fees or other demands, the management fee would be significantly less. Those are vetted by us two different sets of checklists. And what the criteria is that we’ve we’ve we’ve stuck with for the past 10 years that have been very successful for us. Additionally to that, we the one difference with that is, you know, they both offered great tax incentives, but from an equity stake, the keyword there is anchor, well, let’s say the anchor investor or the investor that in the first part of the first 40 percent of the fund initial capital raise do get that premium class of return or shares, if you will.

Speaker1: [00:18:00] Ok, that makes sense. Just write this down before for the next conversation, before I forget. Got it. But at the end of the day, like it looks like the terms they have are pretty like, you have your terms and you’re not you’re not going to budge on those terms, right?

Speaker2: [00:18:17] As far as the return or the terms in terms of on the investment side, because there are two sides, there is the return for the investors and they are, you know, like we said, the anchoring piece this this we need to cap it, you know, obviously, obviously, the fund is going to be successful, but also we can give everybody 10 percent preferred, right? Forever. So yeah. Otherwise, we’ll be working for free. But. Um, the beauty of how we set up is that. Whether you’re whether you’re in the high yield income fund or whether you’re in the right fund, there are options where if you wanted to have a shorter horizon into the fund, where you can do a straight convertible, it’s interest payment at 10 percent and we can keep that as long as you want. If you want it for the next five years, you can do that if you want it for. But however, when the fund is eight percent funded or raise it, percent committed, then automatically everyone with a convertible debt note will be converted into equity. And so that still gives you an upside if you wanted to park some money and not having to pay taxes on it. If you have $10 million or 20 million dollars, you don’t want to be taxed on the transaction. The fund is designed to also help you do that with that convertible note. Got it.

Speaker1: [00:19:55] Got it gives people a great amount of flexibility and I see, did we have? Ok, cool ones joined for a while, but but he looks like he left. Ok. And so you said that and now I’m just here to really just understand where you’re at, because when it comes to the logic, you get the marketing to me and you launch, do you have a particular closing date in mind? Just so I can know so we can know like, OK, where you’re at? You said.

Speaker2: [00:20:22] So, yeah, yeah. So we’re great. The Rays, the rays will go over the next year, but we will close. We will close each capital call or each, each tranches of raises every once a quarter. So. So we’re expecting to capitalize the first tranche by January one. Twenty twenty two. And we’re working with some investors and talking to investors is very highly likely that we will be fully capitalized because I think we’re working on that transaction to go through on something else. So if that does occur and that transaction on the other side is so successful, then I would say we expect to have the fund the 100 million dollar fund to be fully capitalized by Q2 of next year.

Speaker1: [00:21:21] All right, that’s fantastic. So yeah, there’s somebody that, yeah, somebody should bring bring you in touch with. I don’t know if you spoke to introduce you to Milliyet.

Speaker2: [00:21:33] No need to someone else but look familiar. Not Alan. I forgot his name. But no, no, I have not spoken.

Speaker1: [00:21:46] Ok, that was that was Alvin. Alvin is more. Listen. Communities can be good for. Somebody called Stephen Miller. He’s actually a billionaire. And it would be nice if you can get you can get in touch with her so that you can use that JV side of it and talk about the fund in that way because she may be able to just make you make you some more connections. I’m not promising it, but I’m just going to make an email introduction to her now that not everything is ready to go. And then just another, just another angle you may be able to get.

Speaker2: [00:22:21] Yeah, yeah, absolutely. Yeah, that sounds awesome. Definitely. Yeah, we will appreciate that. We’ll have. We’ll have, we’ll have more to come on that. And we also have deal flows coming in as well, that’s another piece because we have excess of 50 to 60 million dollars on a table right now. And if we’re fully capitalized, we’ll close all of them by December 21st. So fast. So when you say when you say and the deal are definitely if, if, if, if there is some interest to with them, we’re happy to do that again. The way the structured it’s designed, it’s really providing one of the greatest flexibility when it comes to funnel funds, as well as amplifying syndication or real estate investment in a different format that people have not thought about because you have the tax saving. I mean, we’re projecting almost a hundred percent. Depreciation, no segregation or tax saving on the initial investment with Calzaghe and other things that we’re doing, in addition to that, we think we would outperform our projection at 18 percent net and that’s very conservative and we think we can actually. And be in the low 20s to mid 20s, and then and then also there is the rollout of opportunity zones that allow an additional six years for tax deferral or tax credit. Exactly. And so and that’s why we that’s why we feel so confident that even we are going to anchor or GDP that comes in with 20 and 25 million with 10 percent plus 18 percent net. The fund will be able to sustain that based on all the stress tests we ran. It will still be able to outperform that. So.

Speaker1: [00:24:29] Well, understood, and one question we talked about this last time, but I mean, you’re probably you probably already got hit with this. So when you go out to the market and you talk to you, talk to the potential JV people, I mean, wouldn’t that take it away from the direction of the fund because they’ll be like, Oh, I want to do this one off rather than I want to do you know what I mean rather than I want to follow

Speaker2: [00:24:51] The Oh, I mean it. Well, well, it doesn’t. It doesn’t. I mean, it doesn’t follow from a fund standpoint and anyone who said, Hey, I just wanted to do this one off. It’s it’s pretty easy, we just create a new a new class of shares.

Speaker1: [00:25:08] Oh, interesting.

Speaker2: [00:25:10] Great. There’s a better way to do it instead of having to do stuff with J.V. because obviously part of it too is having fun. Is is is is being successful at raising a larger pool of capital and and the class of shares is something that that directly to the PM or the memorandum. And therefore, you can have multiple classes of shares. I mean, this class of shares may have a higher return, but there is a base class return that everybody gets. But obviously, of course, obviously if you’re if you’re buying a Ferrari, you don’t want to have every you don’t have. You don’t have to have a generic seat cover. You want to have one custom made to your liking. Right? So so that’s the point. That’s the same principle we will try to bring in. But also what doesn’t change is that the parameters of the fund in terms of investment do not change, whereas we will not invest, will partner, we will not engage in a project that could not successfully delivered. After all, stress tests, 18 percent error. Mmm. That’s a deal breaker, if you cannot, then we’re not interested, right? And so and so because of that, we see a lot of deals that come to our desk that does not pan out.

Speaker2: [00:26:32] So we have to let them. We have to keep on moving because the deal doesn’t pan out, even though the deal is returning 15 percent, 14 percent. Now those deals for the day or the impact fund because of where they are or where they are located, or the demographics or the market or the stock market they’re in, and the enterprise tax credit and opportunity zone may be a good investment because of the upside of. On the tax setting, but also be short term, because this would be like six to nine months, 12 to 24 months, maximum looking period before you exit those deals. So again, that’s why we look at, hey, we have two different funds, but the high yield, when we’re talking about the high yield, there is no room for modification or flexibility on the return. What the parameters are, that’s what the parameters are in terms of. The deals or investment, what we’re looking to deploy capital,

Speaker1: [00:27:42] Got it like that’s that’s your thesis essentially is what I’m getting right? That’s like the correct minimum minimum standards. Ok. I mean, you also talked about and right now and just matter in +1, just for context. You know, sometimes in calls like this, we have interesting conversations. It’s not always Q&A just for context, but but in light of what you’re saying, like, would you say that? Like, would you say that like what about the the early stage, the more the developments that you’re lumping in there with, like because the horizon that they come out, they’re going to probably give you that 18 percent within, what, two to three years rather than the like, rather than the properties that are already running right now. Like how does that look like in terms of because you said,

Speaker2: [00:28:31] Well, yeah, well, maybe, maybe, maybe, maybe maybe when the fund is 80 percent funded, we could potentially look at that. And also. Ok. And also typically with development, I would not engage in development unless it was at phase two or phase three, meaning that the building is already erected and they are looking at doing the interior. And you can basically are just kicking out the construction debt and you do have full equity conversion for a successful exit rate. You could do that. But but the the reason why we focus solely on acquisition, at least for this first fund, for the first to fund the main reason, the main reason is cash flow on the day we closed. Not two minutes, not two minutes, not five hours. A second after the two that were using the tools that they were using when they set up with when they set up with a property management system, we are API. You can see the cash flow coming in right away. As soon as we close some day, so so the thing is cash flow. Return taxes, savings, right, and then the upside. Exit.

Speaker1: [00:29:52] Hmm. So you have API integration into your into the property management software.

Speaker2: [00:30:01] Yeah, so so I’ll give an example one deal with the LP in Phoenix. We use IMS for the investors management portal and that Iemma’s investment portal is tied to. Uh. The property management software that worked after that, the property managers were using, and depending how much you want to show and how much you don’t want to show that typically we like to show things like property health, we’d like to show what I mean by property health. What we what we show is member of. They are a member of service requests and a number of service requests closed, right? That tells you how the team is doing. That’s one thing. That’s one metric that investors can have some visibility into. And then the other two metrics are economic vacancy as well as physical vacancy. So physical efficiency, you may be 90 percent, 95 percent physically occupied. It does not mean that you are 95 percent economically occupied. So we are also we we basically show these three metrics. So when you log in, you can see it. And then the other one, too, is that investors do not have access to, but the general partner will have access to IS to look at cash flow. Obviously, you know that that’s because, you know, you have some actual cash flow to investors until. Their distribution cycle goes through and then you kick it out. Otherwise you have a pool of money sitting there.

Speaker2: [00:31:42] But everybody has purview to that they should not have so. But from a GP standpoint standpoint, it helps us keeping the property management management management on us. Because that software also has the ability to tie into the banking account of the partners as well as the property management account for this particular property and how it’s doing. I mean, it’s so interesting that you can even set it up where it sends you a text, when, when, when, when your threshold is lower, they say today’s today’s the first and then on the 5th, you should be at least collecting for the US. You have on the fifth day after the fifth day, your lady will pay your rent. So in the US, you know, on the fifth day by four o’clock, you can sit in such a way that it alerts you that OK, well, 80 percent of the capital, 80 percent of rent for this will have been collected. And then here are those who have not paid. So again, not every scenario you use that software, because it’s quite it’s actually very expensive. It’s a subscription market. It’s $2000 a month for obviously, you wouldn’t do that for a deal that only ten thousand ten million dollar deal, but for a 40 million dollar property deal portfolio of two thousand units. Yes, you can do that, right? So the longer the deal is, the better.

Speaker1: [00:33:15] Yeah. Yeah, and it actually what you mentioned, it reminds me of just internally raises, I come like we’re working on becoming more of a principal lender in the long run. So there’s something called, I don’t know if you heard of it, it’s called civil. They what they do, they I mean, it’s honestly like it’s like a hard money lender, GP products, basically, because you know what they do to give you. They give you X amounts and then you have to match it so they can give you one million. You have to give them another million into their bank account. Then if you if you obey, if you give them the yield that they want, they take 60 percent of the profit of the revenue from the yield. You make that after you lend out and then they give you up to 10 times leverage in a year from bank syndication and lender syndication. That’s how they’re able to do that. So it reminds me of what you talked about. I don’t know if you’re looking for more. I think you really got your debt down, but because they’re they’re a wholesale lender and they depend a lot on APIs and depend a lot on those types of connections. So if they look at they get to get their credit team, if you were to work with them, they can get their credit seem to like to. You already have everything, all transparent anyway. So I mean, that’s just another option if you in case you wanted some more leverage, but

Speaker2: [00:34:36] You can make, use and make information on them. Yeah. Like if you ask with someone that you really like to at least talk to them and see what they have, I don’t know if and this is where we are. All of our legal docs with everything we’ve already said up has already been pretty much done. So I don’t know how much changes we’re making. I don’t think we’ll make changes, at least for this quarter we have now, but I’d like to connect with them and then maybe put a relationship there that can be offered in multiple ways. Doesn’t have to be one one way, but. But, you know, that’s an option. Maybe, maybe not now, maybe in the future, but at some point, I think it’s definitely an option that’s doable.

Speaker1: [00:35:24] Yeah, no, cool. I will and I’ll send you some of the terms. I mean, we have terms for them. We just had like we have, we just have to get like five hundred k together to be able to to lend and then obey their little rules and all that just just kind of as a little credit fund in the future or whatever. But yeah, no, I’ll send you what they got. Is this a nice idea? Maybe it’s something you do later. Maybe it’s not, but you already have all the you have the technical mind. And so that’s why I think would be an interesting products. So. Yep. But right, cool. John Khwezi, not much action here is just me and Abigail today, not much action, but let’s just relax and then anything anyone wants to add, obviously. No requirements, obviously, either. So. All right. We can we can separate down, if you like, but Abdul, just one more question, as I’m really interested in where you’re at. So I don’t know if you can hear me, but I can.

Speaker2: [00:36:55] I can hear you. Cool, cool.

Speaker1: [00:36:57] Last question were you at in terms of actually hitting the market in terms of the investor, you said you got good feedback, but where are you at exactly? Just again, just so I can know your timeline here.

Speaker2: [00:37:12] And I heard some people so so, yeah, so there is a lot that I would say about that.

Speaker1: [00:37:21] No, I think it’s in no rush. We’re just having some fun here.

Speaker2: [00:37:27] Yeah, it sounds like I’m stuck with him, so he’s just like trying to get my attention. So, yeah, so we we’ve been working with Cameron on some stuff with their family office out in Hawaii. Oh yeah, yeah. And then so that’s kind of the structure, the thing we’re working on on the back end that will give us access a five five 5x multiple on the on the equity raise very quickly. And so I had an I had an anchor investor. He got tied up into something, but I think that’s going to go into next year. But we’re looking at a couple of investors somewhere around two and a half million to 20 million. But I don’t have a specific date for you, right? I think, yeah, I think before before December 15, we will know there is one. There’s one thing I just want to say that I know that been providing a lot of update about where he’s at and he wants to commit $10 million to kick us off. And so that’s the precipitous that’s the precipitous of us leveraging five times that. So. So what just does a lot of legal people believe on there and park? So I think, yeah, so I think there’s still some work to be done in terms of there is still some work to be done in terms of starting seed capital coming in because obviously everyone would say, Hey, I’m committed or I give you a commitment.

Speaker2: [00:39:19] And until the capital is, why did you? So so but but we actually decided that we are going to have a hard commitment because we know because we will be we will be calling, we will be calling the capital at 10 to 20 percent each time that we need, and they will have 10 business day. I mean, they will have, yeah, 10 Business Day to wire the money. So, otherwise otherwise they’ll be penalty. But I don’t think we will penalize them. But I think what would happen is for any investor that we have done business with in the past or the investors that that are hesitant, audit our, you know, do the due diligence and so on. We want to see 20 percent from the first tranche from them to move forward. And and yeah, so so there is a lot of the beauty of it fund. The beauty of Ifon is that with a fund of funds, you have the ability to you have the ability to to create, order, fund and then have that fund subscribe into your fund as the equity fund.

Speaker2: [00:40:38] So they are all their. I’m involved in adding four million dollar fine, but I’m I’m a GPON and those guys have committed that they would provide two million and I have another fund. I have some verbal that they can provide 20 million and that’s coming strictly from the professional athletes, professional athletes. Okay. So, yeah, so again, so a lot of stuff is dependent on other things going on, you know? So that’s why I was saying, Hey, our fund is set up to receive accredited, non accredited and then qualified individual like, like, you know, someone who can write a 2.5 million dollar check minimum and that’s the minimum, right? And so all of capital, whereas they are coming in with five million minimum or more. So you go. So, yeah, and so, so so this would be almost like you set up a parallel fund, but it is not a pilot one, it’s more of a another fund with equity that’s coming into your fund because we have the expertise we’ve been doing for a while and they just commingling their capital into our capital and as such, we will reach the aid. There we go.

Speaker1: [00:42:08] Yeah. And obviously, obviously, as you said, like the money is not. You can hear all these stories about blah blah blah. But then until they wire the bloody money, then they’re getting more connections, as you know, right?

Speaker2: [00:42:20] Yeah. Ok.

Speaker1: [00:42:24] Oh, good, good. Yeah. Hello. I want this one to get done and then we can so we can make more success stories here, so I can’t wait. So this one gets done. So then, yeah, so I’ll send you

Speaker2: [00:42:35] So yeah, I mean, yeah, no, go ahead. I said, Yeah, we’ve been busy working on similar things and he just so now. Yeah, so it’s one, you know, you kind of do different things. But essentially we were just reviewing for the two phones. We’re just reviewing our budget and what we’re projecting this past weekend, and we’re looking at a million dollars plus in Operation Capital that’s been having it and all this stuff going on because obviously, obviously every fund has expense, right? Yeah. But that’s why it’s so important that we are working with anchors like anchor investors. Maybe give some equity, maybe work other higher return to gain that capital operation, operating capital to to really, truly take advantage of. Once we get what we’re looking at once we take off. We anticipate that we probably triple our amount of deal flow coming on our desk. I mean, I receive deals. I receive two to three deals every day, can receive dozens of deals. And also, you know, Ken is also a commercial booked as well. So you also have access to over 4000 commercial properties that are off market as well as to all of that, you know, clean our advantage. So but we know a good deal. We know about we we.

Speaker1: [00:44:03] Fair enough. I mean, Ken, Ken’s resume is pretty strong there, too. So, yeah, that really shows OK. And when? So when I when you just chat to me, I’m just trying to come up with the angle just to kind of make it smooth. So like two hundred plus million dollars, you know, multifamily opportunities, something like that, you think something of that just in one sentence, you know, it’s going to is an OK representation.

Speaker2: [00:44:34] So if you said 200 to $100 million plus fund,

Speaker1: [00:44:41] Just something vague like plus opportunities, just I just want to say something to just get

Speaker2: [00:44:45] Them. Oh, yes, yes, yes. Yes, yes, yes, yes, yes. 200, 200 200 200 million plus opportunities across the US and and 18 percent plus return or IRR. Or you could say, you know, eight to 10 percent perhaps.

Speaker1: [00:45:07] Ok. Ok, got it. Ok, so

Speaker2: [00:45:09] I’ll do 10 percent.

Speaker1: [00:45:12] Eight, 10 percent. Ok, so I’m going to get that.

Speaker2: [00:45:15] And I mean, it’s it’s funny. You mention I because I were talking to a even here in St. Louis. We’re talking to a real estate group and they own $300 million worth of real estate in the West. And they’re all class AAA and they were selling one. And we actually got it under Illinois, that was really encoded for seventy five million. Ok. And then they ended up selling simply because they wanted to bid up selling their properties. But they kept that one because the Ivy League university around the area just put an announcement that they are going to start construction. For seventeen hundred bed, since they were up by six percent of freshmen and you don’t have any place to put them, so they are putting C student into hotel the R rating hotel, so therefore they tend not to sell it and then do other things. So, yeah, so there is, you know, there is there is, there is projects, there is tons of deals.

Speaker1: [00:46:25] Nice. Nice. And OK. So we’ll get that the. Yeah, and when you mentioned so 20 million plus in this one, I was going to actually link it back to something else we spoke about, but I guess that topic has already left my mind right now.

Speaker2: [00:46:44] Ok. I’m thinking about you’re talking about the 200 plus looking about the 200 plus million dollars worth of deals.

Speaker1: [00:46:57] Ok. No, it’s OK. No, I was just I was just trying to jog my memory. So when something else is that if anyone, if they talk about bonds or anything like that, I just steer the conversation away. They may start talking about that. I just focus more on the JV. But if they start talking about bonds, I just.

Speaker2: [00:47:12] Yeah, well, well, the the bonds one is interesting. In fact, four years ago, I was explicitly sure to that. But the problem with the bond thing, we cannot do bonds right now because the fund has not held or the fund has not yet own $50 million or more asset under management. Oh yeah, because because the magic number is somewhere between 40 and 50, because once you hit 50 million, you’re performing at the same level as the life insurance companies or read. And typically, typically what I’ve seen them, what I have seen them done, they would issue a bond or they would buy out. Um, um, majority of the deal or they would have raised their own bond. With a reverse merger, whereas you stay at 33 percent. In the capital stack, and then they do the or they retain 33 percent as well, and they actually exit or IPO or mini IPO or 33 percent. So I’ve seen that done, but for right now, it’s too complex. And also like I was telling you about earlier. You need capital for operations. And when you’re talking at the level where we think at that level for a $50 million deal like that that goes into bond, you’re looking at 300 K into lawyers fee for the IPO. So again, we are focused on being lean but also focusing on the return. Whatever drive, the return, the highest, what we maintain, what we do. But we want to minimize cost as well. The goal is not to increase costs. The goal is to decrease costs and increase profit. Right? Mhm.

Speaker1: [00:49:08] Exactly, exactly. Yeah, that stuff is expensive. I mean, all these prices. So OK. And yeah, so you know, hopefully, I mean, we benefit a lot from these introductions. But then obviously you can, you know, you can just get a pretty lean team to just work on it in the market. We have family offices, right, right on the on a racetrack or something, so you can use it to the end if you want as well.

Speaker2: [00:49:32] Yeah, you’re probably

Speaker1: [00:49:33] Going to get some like some good people, like actually moving to deal pretty close on just from that alone. But yeah, we’ll send you also the marketing, the marketing option as well and everything.

Speaker2: [00:49:45] Yeah, well, that sounds good. Yeah, sounds like your plan

Speaker1: [00:49:53] Because I’m excited, I want to see you get this done and then celebrate it.

Speaker2: [00:49:59] So, yeah, absolutely. Yeah, we’re looking for something big end of the year, hopefully.

Speaker1: [00:50:06] Here we go. Ok, OK. So think I mean, I think we’re pretty, pretty covered off here. And sorry, Matty, we couldn’t use your you can use your wisdom this time. It was just more of a conversation this time.

Speaker2: [00:50:20] But that’s good. I mean, that’s a good conversation. I mean, I have this conversation. Both can. I have this conversation? Probably right now, it doesn’t have a date yet with prospective investors, and we just came back from this conference and it’s a bunch of people calls and we have one coming up next week. So essentially our key metrics here is that in order to really kick things off, we need to have some commitment and secure five million dollars, which we which we which we do have Superbowl on. So now it’s a matter of we had to do some. Some changes and things like that, but I don’t know if you are familiar with the laws over here, but here in the US, when you do a D, you can start receiving money and you have 15 days to file and receive the money. And then for the reggae, for the reggae, you have 60 days to file. But the rest is a bit tricky because with even the increased funding, if you go through a broker dealer, they can put a downloadable length about the fund and all that. But if you’re doing it yourself, you cannot put a downloadable link. Advertising, defense, projected numbers, you can talk about it, so there is a lot of nuances, things that we have to get accustomed to and understand it, just especially on the right side of things. But we do have a really very, very, very good experience law firm that we’ve been dealing with for the past two months that’s been reading more legal verbiage than I need to.

Speaker1: [00:52:02] So, yeah, yeah, you get it gets really some of it gets kind of it becomes a game that you just becomes a game sometimes to see like

Speaker2: [00:52:11] It’s a game of wordy, I think. Yeah.

Speaker1: [00:52:14] So that if you get audited or something, then you can’t really. There’s nothing there. Right?

Speaker2: [00:52:18] Well, well, I mean, we technically with a hundred minute often you don’t have to have an audit team or you don’t have to be audited. But we made the decision to have one of the large auditing firm to audit no matter what. And also, we all have an internal audit done as well. So you know, the day we want to make investors very comfortable in our study going 40 grand, the idea is we have nothing to hide. The fun is going to perform and it’s out. It’s out for an auditor to do that. I mean, you know, and you keep it that way. I think it’s reassuring to investors, but also to new investors or extreme investors as the as a newer fund on the block, we feel like we’re not complex or we’re adding red tapes when they need to verify or validate how we operate.

Speaker1: [00:53:09] Yeah. Yeah, and when it comes to the marketing, sometimes one thing I found, too, is sometimes just getting like they’re getting their contact information or email right away. So as long as like because sometimes when some people instead of just putting everything out on the internet, like probably just to get them into. Exactly, exactly. Yeah. Yeah. And then you can. That’s what because a lot of people that they do, maybe some controversial advertising and this is the associate to introduce you to because some people, when they do all these controversial advertising like psychedelics, drugs and guns investments, something where you the words have to be really careful. Sometimes it goes just to get them into your ecosystem, and then you can start saying and saying the right things to the right people and filtering. So that’s one pattern I see a lot to. And hopefully this marketing team gets to do that.

Speaker2: [00:54:02] That is the goal. So, yeah, and we’re going to push for that. Yeah, and one

Speaker1: [00:54:08] More question here. So then where are you based again?

Speaker2: [00:54:13] I’m based out of St. Louis, Missouri or Missouri.

Speaker1: [00:54:17] Got it, got it.

Speaker2: [00:54:18] It’s not not too far as far, but it’s not that far. Yes, I used they used to live in Chicago, so I kind of bounced left between Chicago and St. Louis and then came out of New Jersey, New York, New York area. So our office, a main physical office, is really in New York. So. But you know, everything is virtual. So yeah, yeah. Yeah.

Speaker1: [00:54:46] There’s no points like you see, that’s why that’s why coming out Acropolis, that’s why coming out during the pandemic is one of the best times to come out because this is this is the life now, right? This is our life is going to be,

Speaker2: [00:54:59] Oh, it is. Yeah. So. Absolutely, so I don’t get a comment or anything, but definitely we probably will see a couple of more things coming out next week or next week from us. But we want to we want to, like I said, you know, we want to work with international capital or investors who want to come in the larger, the larger check they can write. The better it is for them, because we would, we are open to create a separate class to cater to their mandate, but also ensuring that our criteria into the investment itself, meaning the 18 percent return and 18 percent prefs are paid out as the basis of all of what we do.

Speaker1: [00:55:56] Got it. Very simple, very simple thesis. Just sticking to that 18 percent at the end of the day. Yeah, yeah. Good. Ok, so I’ll pick you over the information. I really, really enjoyed his updates. I’d like to hear that people are you’re moving forward. So we send you all the information. And then obviously this matter is helping us with analysis. Maybe you get another deal on the contract matters. He he he saved. He’s saving us during. We had one deal with an investment bank that asked for a valuation last minute, and so he went and helped them out. So we’re still here and I will send you all the notes there.

Speaker2: [00:56:34] Very good. Perfect.

Speaker1: [00:56:38] All right, perfect. I think everyone cheers. Just.

 

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