Deep Dive Into Asset-Backed Funds

You can watch the video below the article.

What are asset-backed funds? Our Chief Investment Officer, Chris Carsley, was part of a panel that did a deep dive into asset-backed funds. He was with Michael Flight, co-founder of Liberty Real Estate Fund, and hosted by Patrick Grimes of Passive Investment Mastery. They discussed the ins and outs of investing in asset-backed funds. They also discussed funds dealing with private debt, private equity, and even funds in the exciting world of blockchain in real estate.

Video Highlights:

• What are the different types of funds?

• What are asset-backed funds?

• What are the opportunities in the market for asset-backed funds?

“The great thing about investing in a fund with multiple assets in it is that you immediately benefit from diversification.”

— Michael Flight

“We see people winning in private debt in real estate while equity is currently struggling. However, if you can be a part of acquiring now, then you could potentially be in the second-best buying opportunity after 2009 to 2010.”

— Patrick Grimes

“I always say that in times of chaos, you definitely want to be running multiple rods in the river so that you can catch that opportunity because they’re out there, they’re just harder to get. ”

— Chris Carsley

Watch the video below.

You can find the other videos in this series here.

Transcript

Patrick: All right, well, we appreciate everybody's patience here as we gave a few more minutes for the rest of the individuals to jump on and join us on this wonderful evening here, where we're going to talk about asset backed funds. What is that? How do you find them? Alternative Investments is what we're all about at Passive Investing Mastery.

And we do this Mastery Series specifically for you, hard working professionals and investors that, how do you even find out about alternative investments? And what kinds are there, what kinds of them are out there? What are the risks and rewards, and how would you choose to allocate to them? And who can you invest with in those?

And I've got some of those people here today. Really excited to have these rock stars in the investing space that I've had the opportunity to get to know. Uh, you're going to see Michael Flight here, who is the godfather of blockchain real estate, so that's going to be fascinating. And I'm going to twist his arm a little bit to talk about that.

He is the co-founder of Liberty Real Estate Fund. He's got 34 years of experience and he's done over 600 million in real estate. Pretty incredible. Chris. is also a rock star. He is the partner at Kirkland Capital Group, co-founded in Seattle, and he's got 25 years with 5, 900 multifamily units under management and a 647 million portfolio.

So I'm going to let them both talk a little bit about where they come from in a couple minutes here. uh, what they're doing and why they're here. And then we're going to jump right into what are asset backed funds and how do you invest in them? I'll go ahead and hand it off to Michael. Go ahead.

Michael: Thank you very much, Patrick, for inviting me.

And thank you for pairing me with a sheer professional with you and Chris Carsley. So, uh, but I've been in commercial real estate since 1986. We founded Concordia Realty in 1990. Uh, we specialized, uh, up until about 2017 in doing large value add retail projects. So we were some of the first in the, uh, the country to do what's called de-malling, taking an enclosed mall that's, uh, not performing well and, uh, emptying it out and tearing it down and converting it to a different use. Uh, and then we kind of pivoted, uh, because we saw that Amazon was Picking up and eating a lot of, um, you know, some of the retailers that we had in our shopping centers. So we decided to go with, um, Amazon, uh, internet resistant tenants.

And, um, we put together a portfolio that had, uh, different tenant credit risk, uh, different geographic risk, and also different industry risk. And they were all, you know, Necessity based retailers. And it turned out to be a very good decision because they're also COVID pandemic proof retailers or resistant retailers.

So, uh, and I got into blockchain, uh, probably in about 2017 and somebody outside the United States asked me to do some consulting on a project, uh, it's called an ICO, their Initial Coin Offerings, and these guys just basically were managing Airbnb’s in Bucharest, Romania, and they needed somebody that knew something about real estate, and they had me look at their, uh, white paper, And the white paper of the word awesome in it 400 times.

Uh, so, but we decided that, um, we're in the United States and we have to do things by the securities law. So that's how I got into blockchain, uh, real estate and, uh, issuing securities on blockchain and creating the blockchain real estate summit to explain to developers and syndicators how to do it.

Patrick: Fascinating. And I got the opportunity to see you live in Chicago. I think we shared a stage. I was talking on economics and you were talking about blockchain. So, uh, fascinating topic. Great to have you back here, Chris, go ahead.

Chris: Yeah. Hi, everybody. Uh, yeah. Patrick, thanks for inviting me in here. Um, my background is, uh, heavy on the alternative side.

I mean, people sort of label me as an alternative investment specialist. I was a manager of high net worth and family office money for a number of years. Um, then I got tapped on the shoulder and had the opportunity to go trade for a hedge fund for a number of a number of years doing event driven arbitrage.

 Um, took that skill set plus, um, the ability and the sort of the joining a team within, uh, the hedge fund that was building product, uh, from the ground up and all the moving pieces.

So I learned how to build a fund, took that to a fund to fund that invested in hedge funds primarily, but a lot of different special situation, esoteric trades. Um, and then I broke out after about five or six years of working for that al allocator and just started doing a lot of angel investing. Started a small seed angel fund, worked in venture, helped a lot of, uh, local, uh, venture folks and angel groups within the Pacific Northwest.

You know, grow and expand and think a little bit outside of their normal box. And then, uh, in 2019, uh, a long term friend of mine who, someone who'd worked in real estate for, uh, especially in underwriting, uh, for a better part of, uh, 20 years, uh, Brock Freeman, uh, he reached out to me and said, Hey, I think I have an idea for a debt fund.

Why don't we take a look at this and see if there's something there and if somebody would be interested in it. And, uh, that's how we created the Kirkland Income Fund, which we run to this day.

Patrick: And I've been following your Kirkland Income Fund And I was delighted to meet and learn more about your rich background.

So if perfect for this asset, because you've done the most esoteric versus the more hard assets as well. Right. So there's a big blend there. You're talking from the spectrum. So if you're not familiar with who I am, my name is Patrick Grimes and CEO founder of Passive Investing Mastery. Uh, we, we do real estate, mostly also debt funds.

We have also a company called Invest on Main Street. You may know me from, and we have about 5, 000 units. Multifamily, we've done some energy as well in there and we're here right now to talk about all the different kinds of alternative investments that are provided by other companies like us. And that actually other companies actually have those investments.

And over my 15 years of experience of working in professional automation and robotics in parallel with real estate, I know as much as probably all of you do that you're only ever taught about your retirement account or stock in your own company or startup. You can't find these things. You can't hear you know, in normal day conversations about these and people have walked the walk and, and done these things. And so this, our goal here is to simplify the complex and make it easy. And so we're going to talk kind of generally about what are asset backed funds. Uh, what's, what's the difference between a non-asset backed fund or versus an asset backed fund and what are the risk rewards?

And we're going to go a little more into detail about different kinds of those. So I'm going to go ahead and, for this first one, Chris, Why don't you give us an intro to what is an asset backed fund? Say, what is a, a special, what is a singular fund or a singular investment versus a singular special purpose fund versus an asset backed fund versus a fund of funds.

So maybe you can give us an explanation of what these things are.

Chris: You got, you got a lot, you got a lot of things going on there.

Patrick: Yeah, I think you can do it. I think you got it, if not, we'll get you back.

Chris: At the highest level, an asset backed fund is, is an investment vehicle that generates its return from a pool of assets.

And that pool of assets can be a variety of different things. Um, one of that, obviously, this group is specializing in is real estate. You know, it could be a pool of equity holdings. It could be a pool of debt, very similar to what I think, you know, all of us here have made reference to and, and something we've built is we own a pool of mortgages or Mezz debt or some other aspect related to real estate that is generating a return, whether a combination of pure income or you know, or, you know, equity and income.

Um, and then that flows through to those investors. Um, now you had mentioned fund to funds there as well. I usually view fund to funds is a another tool that investors can use. that there is a layer of fees. And I know that kind of grinds on some people, but it can be very useful because where you find fund to funds mostly used in this might be applicable to many investors, large endowments, pensions, they use fund to funds because they don't, they don't always have the due diligence team or the time or effort to go in and create a diversified portfolio.

Or one thing that Patrick really hit on that I'm sure we'll talk about more is proper access to these. Where do you find these things? Where do you access them? Yeah, there's two people on here talking about what they might be doing, but how do you find 10, 15? Where do you, where do you access these things?

We can talk more about that, but that is sort of the highest level of where Asset Backed Funds and you can have, a single fund you want to go into, um, you can also use a fund to fund model. And Patrick, I think you also mentioned, you know, single asset funds. Um, some people might call those SPVs. Some of them might, you know, I know that, uh, a lot of people on this call might've been involved in single asset special purpose vehicles that were run by sponsors slash syndicators in the multifamily space.

That was extremely popular. A little less popular now, um, with a lot of those needing to do, uh, LP capital calls and being, you know, having that, that wonderful, uh, double edged sort of leverage now swinging back and hitting them in the face. Um, but that's another sort of single asset. That, you know, you may not have the diversification that you might get from going into a fund. That's running a pool of assets.

Patrick: I think you, I think you nailed it. And the word fund is a little bit mysterious, right? Because you hear it thrown around a lot. And ultimately if say Michael and I are going to buy a property together, we don't need a fund for that, right? We can just go buy a property together.

Why do you create a fund? What makes a fund necessary, Michael?

Michael: Well, um, As I don't think I can do any better than what Chris did, he put together a master class, but, um, I, I do think that there's a misnomer. A lot of times syndicators will go out and say, I'm doing a fund and it's a single asset. It's a value add multifamily.

I will say. You know, Chris, that there are some assets out there right now that are firing on all cylinders too. As you know, the debt funds are just doing great. So, but, um, I really can't add a whole bunch more. You know, the great thing about having a fund with other assets in it is, as Chris said, it's diversification versus all your eggs.

If you know you've got a nest egg of a few million dollars and you're gonna put 50 to a hundred thousand dollars into one deal, and you know, uh, one of the reasons why I decided to go into blockchain was because there's the potential for liquidity. My mom, uh, or actually my dad, uh, did a hotel deal in 1984.

And my mom was stuck in it till 2020. She couldn't get out of it. So, and that was a single asset syndication. And so one of the things is, is that with a fund, you still have one sponsor, but you've got a number of different assets that, you know, uh, theoretically, most of the fund isn't going to be non performing.

Patrick: I love it. Let me, let me just reel back because there are a lot of big words here. We have fund, we have syndication, right? So fund and syndication. So if I, if Michael and I were to go like buy a property across the street, we would both contribute money. And we both actively go buy it. But what happens when it's one person that's the expert and that person wants to be active and they want to raise capital from a lot of other people.

And those people are not experts. They don't want to be active, but they want to have limited risk. Well, you can create a fund for that. And that that's really when people say, I've got a fund that typically implies you have an active sponsor and a bunch of passive investors. And then in order to create a fund, the United States, you have to register it.

And that's where the misnomer is. The fund, the word fund and syndication typically are used somewhat synonymously because you're syndicating or you're bringing a bunch of small equity partners to the table that are passive or limited in their liability to, and then you have one sponsor groups makes all the decisions.

You don't want Joe the plumber making blockchain, about, about your debt fund or about your property, right? So when we say fund, it could be, as they're saying one asset or it could be a lots of assets, right? It could be defined. We're just going to buy this one property. And that's a special purpose type of fund.

And it's, it's not blind. You know exactly what you're buying, right? And then when somebody says it's a blind pool, Well, that may be a fund of funds. It may be something where we're just saying, Hey, in theory, we're going to go buy these kinds of assets and asset could be anything, as they said, it could be gold, it could be Bitcoin.

It could be real property, right? Those are all technically assets. And so. When we say a blind pool, which is another word, what we mean is you don't know if they're blind. You're going to invest in a thesis, maybe a pool of loans or pool of buildings or whatever it is, a bunch of different things, and you're going to trust in the operator.

And so the word fund has like these different facets and I get commonly get asked by investors. So if you're going to go create a fund, you're going to go then raise capital from passive investors. Who are these people that we're talking to? The purpose of this, right? So we're going to syndicate that capital.

Then what are assets that you have? What are the different kinds of assets I think we've talked about? What are assets you find most favorable right now and what assets you find more risky? Right now to for the passive investors to look towards maybe finding a sponsor to invest in a fund Who would feel free either one you take this one?

Chris: Um, I’ll start off with that. Um, One I’ll back up a little bit What kind of fund people should be looking at is really dependent on what you as an investor are looking for. I mean, I don't know what you previously owned. So when you're developing a portfolio, you really should be looking at, well, what I already own, what do I not have?

And, you know, you need to define what I think I need in my portfolio. Maybe you're really super heavy equity and you're super happy about that. Cause well, the equity market. has been rallying and you're looking to shave out and what should I be going into? Maybe that's the question you're asking and you don't have much in, you know, fixed income.

So right now, you know, BlackRock just came out with a series of research around expected returns of assets. and the expected, uh, return versus risk of asset classes, probably about 20 different asset classes. And right now all the numbers and volatility expectations for the next five years are pointing towards private debt.

So that's, that's why you can't go on the internet and not see something about private debt right now is it is a very opportunistic time. from a risk adjusted standpoint, especially thank you Fed for raising, you know, over 500 basis points because it created a huge opportunity for private debt to go out there and charge very large rates, um, commensurate with the market.

And you also have an, an aspect of by raising those rates and putting pressure on banks, you've created bank failures, increased regulation, Basel III still being rolled out, you know, over, you know, a number of years till 2028. And I'm sure there'll be intermittent regulations coming out. Uh, on the back end of more bank failures that will probably occur.

Um, and that is now creating this huge Opportunity for private debt to step in now Is that something you're looking for as a fixed income alternative because I even really I even stated where you know, I run a you know a debt fund in real estate Yeah, it's, it's backed by the asset of real estate. But when I'm talking to people about portfolio and portfolio structure, I look at it as an alternative to fixed income.

You know, there was a number of people said, um, Hey, 60 40 is dead. 60 40 is just an allocation. 60 40 is not dead. What happened is you had the 40 percent fail very easily. Well, actually the worst anyone's ever seen in their lifetime, uh, for fixed income in, uh, 2022. Um, it completely derailed from what it was supposed to do for people's portfolios.

So it was a big wake up call. Should we be thinking about alternative fixed income? And my quick answer is, well, yes, you should, if that's a fit. Um, you know, even with rates being higher. You still can go capture and find opportunities that are high single to double digit returns, and you're still taking very little risk in that alternative fixed income or private debt world, and that's what Wall Street, BlackRock, and everybody else has realized.

So, sort of a long winded answer, sorry for, you know, what's hot right now, but it's a way to think about your portfolio and what you need.

Patrick: That's right. Just to break it down the 6040. Can you explain that? What that means? I want to reel it back in a lot of techie stuff here that I don't want to take for granted that people know What is it that the 6040 is that may or may not be dead?

Chris: Yeah, a 6040 is a classic allocation of 60 percent equity 40 percent fixed income and When Markowitz and a number of other people developing the CAPM model were talking about building this allocation It's a 6040 They had found that to be the most optimal from the majority of investors and It really worked for a very long time Especially when money was free and equity that 60 percent equity that larger allocation to equity was really just constantly leading the charge and Fixed income was really creating just a diversification.

You weren't generating much equity income from fixed income because rates were so low, in fact almost nothing, but what it was creating is that if I needed that emergency liquidity or something of that nature, it allowed me to meet liquidity needs for my portfolio and it also, you know, act as a dampener to, you know, intermittent volatility that was occurring in your equity portion of your portfolio.

Now, as I mentioned in 2022, that derailed to a level that no one on this call has ever seen. It's happened six times in history, but in 2022, it's the worst it's ever happened. You know, you were down, depending on what you owned, you were down 12 to 14 percent on your fixed income portfolio. It's going to take a long time to get out of that hole.

Michael: Well Chris, they were saying in 2020 that the bond market was dead and everything was going to be equity and there's no reason for bonds anymore, you know, and, and that really switched rapidly.

Chris: Yes, exactly. And, and now you're in this. Everyone's all about fixed income. I've never been in the investment world where it's, you know, been this feverish around the opportunities in fixed income.

Patrick: Right. And so you look at the tiger, we always present the tiger 21 allocation chart. It actually has 7 percent on average, the tiger 21, who is it's a high net worth club that actually publishes their allocation. They have a 27 percent in real estate, 26 percent in private equity, and then the rest is cash, commodities, hedge funds, public equities, but then 7%.

Now, what we're seeing, especially on the acquisition side of our business, which was traditionally most of our business, we're seeing that the debt fund is actually picking up a ton of capital of would, otherwise would be equity investors because they're, they're shy, right? They're seeing significant losses.

Uh, we have a, I can example of the interchange between debt and equity is if you buy a 10 million property and then you have 60 percent debt, right? So 60 percent loan to value a 15 percent reduction. Right? And that results in that 4 million that you had in equity reducing by 32%. Right? So a third of it's gone in, in just by a 15%.

Now on the debt side, you're sitting pretty. Right? You actually have nothing. You have a bunch, you still have a bunch of pad between the market volatility. Now the reason why it's attracting that is because people are feeling the pain. breaking it down into simple terms, what Chris was saying, we're feeling the pain on that equity, but they're also, so they're not seeing the return, someone's seeing some losses of capital, but on the debt side, they're seeing an inflated return, as Chris was saying, right?

And Michael's pointing out that interest rates are up, not only are interest rates up, but banks are pencils down. And when banks are pencils down, that means there's a huge supply issue of loans, right? But there's a huge demand of people that need them. And so the interest rates up in addition to a bunch of, uh, a lack of banks liquidity means that private credit, private debt, uh, can step up.

And I think that is what we're seeing.

Michael: Yeah, this is the great thing about this market versus 2008 through 2010 when the bank shut down and there was no private credit market. So, you know, it's, uh, you're going to see a lot of people step in and do some good deals, some bad deals. And, uh, Chris, is the new allocation with the Bitcoin ETF?

60, 40 and 2 to 5 percent Bitcoin?

Chris: Uh, that, well, there are a number of investors that have actually, that's a part of their allocation. I mean, there's a lot of people that are still trying to figure that out. So some of the, especially in the RIA world, not a lot of those people stepping into Bitcoin quite yet as an allocation.

There's a lot of questions. I mean, it's really, it's really interesting to, Get sort of that feedback from large wealth managers and RIAs. From their clients, they're starting to ask about alts. They're starting to ask about crypto. Is, how do I think about this? What do I need to do? Well, it's yield, but it's also diversification.

I mean, there's, there's, I was just talking to a couple of them this morning and they're kind of scratching their head. You know, the S& P 500, although it didn't have a lot of breadth, was led by, you know, seven names mainly. Um, you know, you had some others that, you know, definitely. you know, participated, but aren't in that AI, you know, you know, plateau.

So they're not being talked about, but you know, up 26 percent and you've already seen the total return up another almost 7 percent this year. So people are getting very worried about, well, how far can, you know, AI push us from a valuation standpoint before it breaks. And I kind of laughed and said, well, I really don't care.

Because what I do has absolutely nothing to do with what happens in AI, other than what I choose to deploy at my own company, that will affect efficiencies and costs, but that's about it. Um, but there's a lot of people trying to figure out, what should I be doing? I mean, because here again, they're facing this problem of, well, how far can this equity market just keep going?

Patrick: Mm hmm. Agreed. So there's a bunch of really interesting questions in the chat, if I could just circle us back here. Uh, somebody's asking, what about a fund of fund? Any comments there?

Chris: A fund to fund?

Patrick: Fund of no fun, what is,

Michael: what is your definition of fund is?

Patrick: Yeah, fun. Right. I think this is our definition of a fun of fun.

Oh yeah. And so XUSD, I don't, I'm not sure what you mean XUSD. Did that come up? Um, what is an RIA? Real Estate Investment Advisor is what that is.

Chris: Registered Investment Advisor. They're like your wealth managers.

Patrick: Yeah, Registered Investment Advisor.

Chris: Yep, and you want to know what the chart is behind me? That is from 1999.

That is the taxonomy of the internet put together by Prudential in 1999. If you're wondering what that chart is behind me, I saved that from when I was doing some securities analyst work and managing people's money in the pre.com blowup. Good fun

Patrick: Oh, so, a couple questions here, one about, um, the, um, what interest rates are we seeing now in, in fixed interest in these, uh debt funds, I think. Go ahead, Chris.

Chris: Oh yeah. Um, in my particular net, well, I mean, I was just talking to some single family residential fix and flippers and, you know, very competitive space. There's a lot of money coming in there and they're seeing consistent eight to ten right now, um, in my space, I'm in a very inefficient, sort of micro balanced commercial real estate. And what that means is anywhere from 200, 000 to 1. 2 million loan size in your secondary and tertiary markets. So very, very specialized. Um, you know, we're putting 13 to 15 percent out, you know, gross coupon.

Patrick: Same here. We're in that quarter million to 2 million so far.

And we're, we've been trending at 13 percent plus two points. So yeah, and keep in mind that's not because an interest rates didn't rise that much It's a combination of interest rates and demand and I think it was a drone pal that just got on February 6th and said this year and said that the impact of commercial real estates and heightened collapse Or distress has yet to fully hit the banking system.

So we're going to see a lot more, we're going to see a lot more challenge. And I'm in a lot of phone conversations with colleagues that are in a lot of distress and they're talking to the banks and the banks are giving concessions right now. but the liquidity crunch that they're having, the concessions they're giving and subtracting from what these regional banks can lend on.

So it's creating a void right now. And as what Michael pointed out, there wasn't a lot of private credit or private debt after the subprime collapse. And that actually spawned a lot of what is the private credit and private debt market right now.

Chris: Yeah. I mean, it really started with Dodd Frank rule in 2010.

That was the first shot in the arm that created. The big surge of private debt. I mean, private debt was around, but it wasn't. In any way, what we see today and then having events like 2022, I mean, you couldn't, couldn't have timed it better if you were, you know, in, in private debt before that, I mean, it was a, it was a huge gust of wind in your sail.

Um, you know, it was for us. Um, but you know, that was sort of the second without any official regulation, the vent of that year. Um, You know, I think there's more regulation that's going to come around that's going to continue this push. And this is why a lot of the, you know, the research houses are coming up with, Hey, the next five years could be great for private debt is because this wind is not over.

It's going to be a while.

Michael: Yeah. And just to pick up on what you were saying, Patrick, we'd done workouts for banks and insurance companies in 1990. And then again, and Uh, 2009 through 2013, um, a lot of the, the, the Fed has already given the banks the go ahead to extend and pretend. Um, a lot of the banks, uh, can't afford to foreclose because if they foreclose, they're gonna have to take a hit to their capital.

So this could be just a slow motion, you know, crawling type of a thing. And then when those eventually get resolved, it's the bank, uh, for example, uh, Republic bank in, uh, New York that then went to New York community bank, but it's going to be absorbed by another bank. And then the hits will be, you know, sell off the loan portfolios.

And so the, A nice thing is, if you're playing in that or you know somebody that knows how to play in that, you can buy the debt, um, sometimes, you know, uh, I don't think you're going to see the discounts. Uh, we saw them in 2010, 2009, uh, 15 to 30 percent, you know, 30 cents on the dollar. I don't think you're going to see that this time because there's just way too much capital out there now.

Chris: Exactly. There's way too much money and too many eyeballs on that trade. So you're just not going to get the discount. Someone's always going to bump it a little bit.

Patrick: So, let's pivot. We're talking about asset backed funds, we've gone heavy into the allocation, which I think it makes a ton of sense. So, we're seeing a bunch of the swing towards the debt side, lower, safer in the capital stack, outsized returns.

But, I really want to hear, we've got somebody very unique on the line, Michael, talking about something weird, which is blockchain. What, just break it down in very simple terms. And we have a mantra, simplifying the complex here. And that's why I keep trying to reel it back in real simple terms. What is blockchain and how in the heck does it apply to a real property?

And so how do you make this happen?

Michael: Um, blockchain is basically just like the internet is to communications. And so that we can, you know, perform this. anywhere in the world, uh, blockchain is that to value transfer. So I can take, you know, one dollar or one bitcoin and send it to you in California. If Chris was in Washington or if Chris was across the globe, I could send it to them and they would receive it immediately.

Uh, and then, you know, the follow up question is, well, why can't I just send a wire transfer? Uh, wire transfers sometimes take, especially internationally. seven days to clear and sometimes they actually don't even get there. Uh, which, you know, I've had, you know, issues with, with blockchain, you know, uh, within a few minutes or a few seconds that the money changed hands or the piece of real estate changed hands.

And so that's why what I got into the blockchain for was, is that it's an easier way. Eventually, it's not easy right now, but eventually it's going to be an easy way to transfer value. Let me, let me, sorry, go ahead. No, you go ahead, Patrick. Answer your question.

Patrick: I apologize. I didn't mean to interrupt. I, I want to drill in.

So what's the difference between something we hear about blockchain usually with like Bitcoin, right? What's the difference between owning, because I own Bitcoin on the blockchain, not in a wallet. What's the difference between owning something on the blockchain versus the other way most people own it in a wallet that could potentially disappear?

Michael: Well, no, um, I'm going to correct you there. You own Bitcoin in Bitcoin. is both a piece of value so that you can transfer value and it's also a value transfer network. So if you own a Bitcoin, you own, you know, a, an asset or a digital asset. Um, and it runs on the Bitcoin blockchain. Depending on whether you have your own wallet or if you hold it on, like if you bought it through Coinbase and you leave it on Coinbase, then Coinbase is holding your stuff.

So that's the difference between when people say, uh, not your keys, not your coin. That's what they mean. You have your own wallet. You have all, you're the only one that has access to it. The thing that everybody remembers is FTX, and people were holding their Bitcoin. They were holding their, you know, cryptocurrency on that exchange.

The exchange went bankrupt. This has happened a number of times in crypto. The exchanges go bankrupt, all the money disappears. Uh, so that's why you want to pull your, you know, whatever coins you have off the exchange and keep them in a wallet, it's just like basically. If you're trading stocks, you know, you don't keep your stocks at the New York Stock Exchange and allow them to hold them.

Uh, it's a little bit different because most of the time your broker custodies your stuff. But the, this is like, you get your own stock certificate, you control that, and if you want to sell it, then you can sell it.

Patrick: Right, and I have it in cold storage, and that's what I was trying to make clear.

Michael: Okay, you have it in your own wallet, you're good.

Patrick: Yeah, I'm trying to make clear, these are things that most people don't. Most people say they have blockchain, or they have bitcoin, or they have a cryptocurrency, but they actually have it theoretically in somebody else's wallet, and that company could go bankrupt just like a REIT, right? You don't actually own the real estate, you own a percentage in this kind of REIT, but that REIT could fall apart, right?

Michael: You own a stock in a corporation.

Patrick: Yeah, you own a stock in a corporation. There's some similarities here. They're not exact, but there's some similarities. I'm trying to say that we're the real asset people and Not that you could aren't make an argument, Bitcoin's a real asset, but you've got to get closer to it, right?

And so, so let me ask this question. How can you compare how real estate can be owned on the blockchain, make it a little more, or how you can transfer it? Uh, make it a little more tangible and compare it to how you would move Bitcoin.

Michael: Okay, let's start with, um, we were talking about syndications. And so, let's say, uh, me and you, Patrick, decide that we're going to buy an apartment building and we're going to be the general partners in it, or the sponsors in it.

Um, So we go out and we're buying the apartments. If we're syndicating, we just do it in paper shares. If we do the same syndication, but we issue the shares to a blockchain, those shares now become tradable theoretically. Um, the other really cool thing about issuing to a blockchain, and this is SEC approved, is after a one year lockup period.

Those shares can trade to accredited or non-accredited investors, which does not happen with the paper shares.

Patrick: So you're fractionalizing it to sub your subscription. Usually people have like a 50 or a hundred K investment. You're saying you're going to take 1, 500, 000 in US dollars and put it on a blockchain, or are you going to need to use a cryptocurrency for that?

Michael: No, it's US dollars. We only deal with US dollars, and we do not accept, uh, we were debating whether we should accept Bitcoin or Ethereum. or one of those. Uh, the problem is the volatility on that. And so we don't want to take the volatility risk. Uh, so somebody could agree to say like our fund had a minimum of, of 50, 000 and each share was 10, 000 each.

We don't want like to agree that, okay, they're coming in with Bitcoin and then Bitcoin drops. And so now they're only investing 45, 000. So we just said, You convert your Bitcoin to, you know, USDC or, you know, regular dollars, you can wire it in, you can buy it with, um, you can put it on a credit card, or you can put in what's USDC, which is a dollar stable coin.

Patrick: So if I invest in, uh, as an LP, I get my subscription agreement signed, and that's basically my paper, you refer to it as paper. So if I'm in Europe or in Asia and I want to invest in your syndication here and I want to do it through this other method, what do I get?

Michael: Um, you get digital tokens. So just like you have your Bitcoin in your wallet, you get your digital tokens in your wallet.

And the great thing is, is let's say you decided to move to Europe or you decided to move to Costa Rica. You wouldn't have to really worry about having a bank account in those, you know, countries. You would get paid no matter where you were. So if you took your, you know, distributions, uh, and we pay monthly distributions, if you took your distributions, uh, every month you'd be receiving that in your wallet, and that wallet would follow you anywhere in the world.

Patrick: Got it. Yeah, so, so that's fascinating. What are the advantages, do you think, to investors for doing this? If they're in the United States, they could just sign up LP. Is this really just for international investing, or what is the advantage?

Michael: I, I, I think it's, you know, I think international investors understand it more and they don't have the type of opportunities that we have here in the United States.

Um, but once, you know, U. S. investors understand that, uh, You can not only, like I say, uh, it, it's easier estate planning, because let's say again, you bought, you know, 50, 000 or 100, 000, you could divide that between your kids and all the rest of it, which is a little bit more difficult to do in a typical paper syndication, uh, you can actually, at some point, uh, when the markets get filled out, you know, Uh, you could potentially borrow against your token shares, which you really can't do right now with the paper shares because, you know, um, and there's, there's other, you know, really good flexible issues.

So it's really good for investors because they get investor flexibility. And then, like I said, um, you potentially have liquidity that you don't have right now with paper shares.

Patrick: Okay, so I think I'm, I think this is, so we got some confusion here and there's a question here. What are the returns of these crypto funds?

We're not talking about a crypto fund.

Michael: They're exactly the same returns as a normal, uh, real estate fund. So if we decided to tokenize Chris's, um, debt security fund, you would be getting exactly the same thing. You'd be getting all the same terms and everything else. It, it would just be that it would be a tokenized fund.

So you'd have more flexibility with your shares. But it would be exactly the same thing that Chris is doing right now. Or, you know, you've got a, uh, a debt fund or you've got, uh, a value, you still have a value add fund, right?

Patrick: Yeah. We have an acquisition fund. We're not doing value add, but we're buying.

Michael: So you're buying, you know, and so if you bought a, an apartment or if you bought, you know, multiple apartments, uh, the fund structure would be the fund structure and this is, you have to like, look at it, like it's the difference between Uh, record albums, if anybody remembers those, and CDs and Spotify.

So this is a digital format. Mm-Hmm. . It's just a format change. It's not cryptocurrency, it's not a lot of those things. It's you're taking, uh, your music from listening to it on a record player. Two, you're being able to stream it and you look at all the flexible things that you can do. It almost put the music bus, you know, out of business, but you've got a ton more flexibility with what you can do with your music now.

I mean, I, I'm looking at my phone, you know, and I've got gazillions of things that I could just listen to, which I could never do, you know, in the 1980s.

Patrick: Awesome. So we have a question here about a replay. I just want to make sure we're going to send the recording out to Michael and Chris, and they will probably bounce it out as soon as they're able.

Yeah,

Chris: I have a question. Mike, one of the key things is transferability. I mean, with, with crypto is the ability to move it. Now, most private funds. have restrictions on transferability of like, Oh, you got to check. How have you guys seen that built through, you know, the blockchain of like, saying,

Michael: okay, the difference between, um, onboarding to a tokenized fund is number one, we do the accredited investor check.

So we only recommend doing a 506 C. So it's an automatic accredited investor check, but also what we do as part of the onboarding is KYC and AML. The KYC is Know Your Customer, which is required by sen and AML is anti-money laundering. And so the other thing, the tokens have restrictions on them. So you as the sponsor could restrict the tokens to only accredited investors.

Um, you also. Mandatorily, I would recommend white, blacklist certain companies in white countries and white list other countries. So, um, because you don't want to get into trouble with, you know, selling your stuff into North Korea, uh, or Iran or Russia. Uh, not that I'm saying anything bad about those people.

It's just that the U. S., you know, blacklist those people. So you don't want them investing into your fund. So, so that's the type of restrictions that you can put on.

Patrick: How do you do it? So if I was to do it, how do you do with taxes? Because I know we don't allow any international investors. If you're an international investor, you need to set up a tax ID here in the country.

and you need to file taxes here in the country. If you don't do it that way, it can be very complex for the sponsor to, and you have to withhold the taxes. There's a bunch more requirements.

Michael: We've done, you know, multiple, uh, foreign funds. So what we did with Liberty Fund is we created two different funds.

There's one, which is a non US investor fund that, you know, is a Cayman Islands feeder fund. And that feeds into the US fund. Uh, and then there's separate U. S. fund.

Patrick: Got it. So you get a feeder abroad in order to get international investors.

Michael: Yeah, and the other thing, yeah, I'm sorry. To minimize withholding, we made that more of a debt fund.

Because if you do equity, there's a 35 percent withholding, which is what you were saying. Um, so we, structured that more of a debt offering, um, you know, which has been received much better, especially, uh, we've had a lot of interest from like Turkey, Argentina, Venezuela, and people that don't have stable money.

I mean, we in the United States don't understand You know, the ease of which we can do business versus, um, last year, I think, uh, Turkey lost like 50%. So if you kept your money in a bank, you lost 50 percent of the value of your money. So those people were looking for something stable to put their money into.

Patrick: I hope we're not headed for that same fate with inflation ticking up a little bit in February. Uh, our, our debt going up a trillion dollars, uh, every, every couple of months here, was it? I think it is. It's, um, 90 days every 90 days. Is that what I just, Just read. So, uh, Chris, what do you think is the best way?

What would be the asset backed debt or asset backed fund, I mean, or the asset invested fund that would allow us to hedge with inflation to keep and keep, uh, uh, our, our funds from being victimized by it?

Chris: Well, yeah, it was tough times when inflation went to 9. 1. Everyone was, uh, you know, family offices were trying to deploy money as fast as they could because, you know, their bank accounts were still only paying like, you know, four.

Um, you know, we've got a little bit of a switch where now you can go get treasuries a little over five, you know, with, you know, you know, inflation and, you know, the threes, um, there's a little bit of a pause. Yeah. Um, from a number of big money sources that I know that they're like, Hey, we can afford to be patient.

Um, I mean, it's really looking at a series of returns there again, looking at what's my gross return. That's your primary target of when you're going out and looking at investments, you need to understand what's my gross return. What's my net return, what's the fees and all the expenses and everything else that go into it.

What's then the impact of inflation to get, well, what's my real return. And then, You know, depending on your status, a lot of people I work with, they look at after tax return. So once you walk through all of that, um, you know, it's, it, it kind of gets to be a sad number, especially if you live in places like New York and California.

Um, but that's how you want to think of one, what do I want in my portfolio to what are the required returns that I need to target given my unique. You know, process and then look for funds that may have some level of, you know, tax advantage aspect. Not all of them do. A lot of your fixed income structures are not tax advantage.

Hedge funds are not tax advantaged. You know, you want to look at something where, you know, do I have enough, uh, real estate equity plays where I can capture accelerated depreciation, uh, as, as a tax write off. You look for those types of trades if you don't have them, you know, in your portfolio currently.

Um, You know, in the fixed income world of, uh, in debt, you know, okay, well, is there an available REIT structure? You know, do they have a sub REIT built? I mean, are they doing everything they can do to create tax efficiency? Um, you know, that's, uh, something to look at, you know, when you're looking at funds.

Patrick: Well, which ones do you favor with these people to help hedge inflation here in this time? Which specific asset backed funds do you think that we should explore?

Chris: Uh, well, I think you should have a mix of private debt and private, private equity and private debt. Um, private debt, you're definitely beating inflation.

Um, most aspects of, you know, my fund and many others is they're capturing, you know, when rates go up and inflation pushes and the Fed's going to continue to raise. Let's just see if they get a battle, uh, inflation. You're participating in that, you know, increase in rates. Um, you're not hurt by it. If you're on the equity side, you know, well then rising rates is not your friend.

Um, there are still opportunities being ex hedge fund trader. I always say that in times of chaos, you definitely want to be running multiple rods in the river so that you can catch that opportunity because you know, they're out there, they're just harder to get. Um, but with private debt, you're looking at a perfect storm to take advantage of, you know, battling inflation. Um, don't be tricked. There's lots of white papers and research out there. If you're going to think about it more on the traditional side, TIPS are not a good tool to battle inflation. Um, you know, you know, they're, they're inflation protection securities, treasury inflation protection securities, I think is the actual acronym.

They haven't worked. They don't really work. Uh, they only work if you are ahead of inflation. So you're investing as demand increases and the market rallies TIPS. That's where you make your money, not during the time of inflation. So there's, there's very few traditional instruments out there that are going to battle inflation, uh, effectively, you know, over a prolonged time period.

Um, another great aspect of, you know, many alternative investments is, you know, a lot of people look at illiquidity as a problem. Well, illiquidity can actually be your friend in times of massive emotional volatility created by investors going in and out. You know, I was just on a panel where someone was saying, you know, I want to talk about alternatives in real estate.

Let's talk about BDCs and REITs. And I was like, well, let's not, because they're not really alternative. Um, you are subject and I'm not saying anything. There's great BDCs and there's great REITs out there. And I know many investors own them. So I'm not, Sort of pooping the whole pooping the whole universe, but don't think that is an alternative. You are at the whims of behavioral finance, which is the emotions by the of the market And you can go look at the MSCI REIT index as a great indicator of that.

It's highly correlated the S& P 500 Why is that? Well, it's liquid. It can trade, it can move. And so whether the underlying assets, which are real estate, perform well or not is sometimes irrelevant, right? It's dislocation between value.

Michael: Yeah. It's primarily, you know, stock traders and if the in market sentiment, that's why I really wanted to follow up with Chris.

He's, you know, uh, The private, you know, uh, debt is going to be a super huge thing, but you can get involved with that, uh, with, you know, actual great credit tenants with triple net properties. So,

Chris: that's another great play.

Michael: So, you get the tax advantages, plus you get, you know, a national tenant, you know, credit tenant that's guaranteeing your rent.

Um, so regardless of what the economy is doing, you've got a 20 year lease, you've got a 10 year lease, and a lot of the stuff that we're investing in has, you know, regular bumps because some of the Stuff out there has like five and 10 year flat deals, which you end up upside down, but most of the things that we're investing in have, you know, bumps.

We're, we're actually buying one deal right now that increases by CPI or, you know, a minimum of 3 percent every year. Um, and that's an international company guaranteeing that.

Patrick: So let's dig in, Michael, a little bit, just because breaking down again, we went from, we had Chris talking about debt, right? And you're talking now about equity, but you're talking about buying, being the equity player, but buying something that has more stability.

And so in that you said now triple net. Now, typically what people mean is, Some types of commercial assets that have a certain lease that gives you that stability. Maybe you can break down what is that?

Michael: Yeah, I'm sorry. How does that work? At least you have to remember the acronym TIM. So the tenant pays taxes, insurance, and maintenance.

So you basically, my pod costs is nothing but net because the tenant pays only rent and the tenant is responsible for paying everything else. So you don't have to worry about real estate taxes increasing. You don't have to worry about, uh, the maintenance contract on the HVAC increasing. You don't have to worry about, you know, somebody trying to find, you know, a paving contractor.

That's not gonna like, you know, go through the roof when, you know, there's a supply chain issue because the tenant's responsible for all that, uh, plus it's guaranteed. It's not guaranteed. Nothing is guaranteed, but, uh, it's got a corporate guarantee on it. It's not, um, me and Chris guaranteeing it more, you know, uh, just, uh, Leasing a, a, an apartment, uh, that we also are going to complain about.

Cause if the tenant calls me to complain, I just kind of say, you should look at section, you know, 19, a year lease, where it says you're supposed to maintain the HVAC.

Patrick: And I love it because then there's really the, you can, you can, you can get returns. I can hedge with inflation and both equity and also debt.

Both of them have to essentially be structured in a way to write out, you The negative impacts of inflation, which is right now interest rates are going because inflation is going and we're chasing inflation with interest rates right now and, and the Fed saying they're going to level it off interest rates, or maybe even take it down, but inflation just hitched up last month in February, right?

Michael: We've got another exciting play with a partner of mine that I've been partners with since 1998. But, um, they're doing single family home sale leasebacks. And it's basically rescue capital for people with equity in their house. We're actually buying the houses at, you know, 45 to 60 percent below market value.

Uh, so you're in the asset at such a safe number that it's even below what the bank is lending on. And, uh, that's equity. So that most of the repayment comes in year two, which I'm not giving any type of, uh, accounting advice or legal advice, but, uh, it's then comes into capital gains and the funds, the, uh, the assets have to pay back within two years.

So, plus you get a guaranteed tenant in as soon as you close. So that's another exciting thing. And it gives you some diversification. Uh, and you can play the housing market.

Patrick: And that's precisely, I think that's exactly where we can be today because as we see this distress and the market happened because of the rise in interest rates.

We see people winning in debt. We see equity struggling, which on the other side, if you can be a part of acquiring now, then you could potentially be in the second best buying opportunity of my life, which I was getting raked over the coals in 2009 and 10, because I didn't structure things correctly back then.

I was got way in my head, way over my skis. doing pre development and I was personally guaranteed the market fell apart, right? So that's why I'm more patient now and low leverage and long term focus. But as what Michael's saying, Acquisitions, that's why we have an acquisitions fund. Acquisitions right now, if you do it right, and you know, if you're not sitting in fear and you're calculated, I'm an engineer and I do my underwriting, find some incredible deals where you can buy it at a basis where just as Michael was saying, you can make your return on the buy.

You don't have to hold for a long period of time and hope that renovation, Expenses will increase rents and valuation, which they haven't, and rents are going sideways and valuations are going up right now. So, and some people aren't seeing eye to eye. So if you can buy now, when transactions are down by 90%, the only people selling are because they're financially distressed, It doesn't mean the assets distressed.

It means that necessarily it means they're financially distressed and you can, you can get in there on a great basis. This is a really exciting time.

Michael: You've got an acquisition asymmetry.

Chris: Yeah. The perfect word is asymmetry. I mean, it's, uh, you're, you're going to be looking at a number, there's, there's more chaos to come.

I mean, Patrick, you said it earlier, there's going to be more problems in the future. That's only going to open up that opportunity. That chaos is going to create those, you know, broad equity plays might be in stress, the news that you read about commercial real estate is probably not going to change, but underneath that and out of those, you know, that, that, you know, big, big news of what's going on in gateway cities, there's going to be a lot of opportunities in equity if you structure it correctly, because like you said, the property is not a problem but the borrower is having some idiosyncratic risk and you are going to be that liquidity provider for them.

Patrick: Well guys, we're at the top of the hour. If you have any, uh, right before we go, we're going to do kind of the, uh, opportunity to reach out and meet us here in a second. Before we do that, is there any remaining questions that we haven't gotten to?

There was one in here. I don't want to let this one go because. I want, uh, uh, Eric had asked the question for the single family leasebacks. Are these funds or private investors? I don't want to miss that opportunity for Michael to jump in there and talk about that.

Michael: It is a fund. Uh, it's, uh, an experience.

It's actually a company and, uh, experience team. Like I said, I've been investing and we actually did workouts with this team, uh, in 2008. Uh, so

Patrick: Reach out to Michael if you have questions on that. We're going to kind of do a lightning round here. Uh, Mark says thanks for the TIM acronym. Uh, Nothing But Net, love it.

We're getting a lot of great positive comments. Um, uh, B. DeWick is awesome. I hating on REITs. I put up my Forbes article, which also hates on REITs to in the chat. So if you're interested on, uh, hate Fest, talk to B and read my Forbes article. Um, uh, if rising interest rates Benefit me, does decreasing rates hurt me?

Chris: Um, that's gets down to the unique, where in the private alternative investment world, they're not highly correlated to what occurs in the public market. So to give you an idea. You know, our fund was writing loans at 11 percent when money was free. So you can say, well, wait, it went up 500 basis points. Why aren't you charging 16 right now?

Well, supply and demand in the market, there's more entrance. You know, that's why we're 13 to 15, depending on risk factors. So you're probably not looking at rates coming down too heavily. If you're basically investing in an inefficient space. If you're going to go invest in Goldman's new private debt fund, you're probably going to experience more volatility in the rates that they can pay you, uh, as rates come back down.

I mean, because they're, they're deploying billions. They basically are the future beta. You know, those big mega funds, they're beta. They're going to be much more susceptible to, you know, those swings and down interest rates.

Patrick: You keep saying when money is free. What you mean is very low interest rates, right?

Chris: Hey, well, for 10, 12 years, money was free and people forgot, forgot a lot of things.

Patrick: Yeah, the good old days, right? We're not going back there. Because I can buy on such good basis, I think we're going to be looking back and be like, Oh, I remember that, you know, when we can buy such good. Anyways, um, everybody's got their own good old days.

Uh, let's see. So we're talking about loves your upgrade from records to Spotify, Ellison, and um, What's the minimum investment for tokenization? I think that's set by the sponsor. There really isn't any minimum, right? You can, you can go to the mat on that. Um, I think we've covered all the questions. I'm going to go ahead and if there's any remaining ones, please somebody jump in there.

Um,

Chris: I mean, there's a couple of things in there that are more about due diligence of alternative investments. Um, you want to take that offline. You want to have a call with me directly. I spent a large part of my career tearing apart funds. Um, I've done a number of webinars trying to educate people on red flags and things to look at and develop a due diligence process.

So, I mean, happy to talk as well.

Patrick: Our last one is for

Michael: radio too. So,

Patrick: and one of Michael's partner was on our last one talking about how she does due diligence too. So check out our last passive investing master webinar. We talked a lot about that. Um, all right. So look, it's we're, we're past the hour. We want to make sure we're respectful of everybody's time.

Why don't Michael and then Chris, you guys, Take an opportunity to talk about the projects you're working on. If you have any giveaways or how to get a hold of you, this is your chance to shine. Chris, you can go first.

Chris: Sure. Um, I had mentioned earlier, I mean, the current project that, you know, we're working on in the fund that I'm managing is the Kirkland Income Fund.

It is a private debt fund. We invest. purely in, uh, first lien full recourse mortgages that are in what we call the microbalance space. So our loan size is 200, 000 to 1. 2 million and we only do commercial real estate. So we find ourselves in niche markets in the secondary and tertiary market space. Um, we lend across all of your commercial class properties.

It's easier to explain what that is not than to explain what it is. Basically, if you do one to four doors, um, in, those are considered residential legally. Uh, everything else, your multifamily, five plus doors, mixed use, light industrial warehouse storage, that, that's all commercial. So we, we lend to those, uh, for people to enact purchase, uh, or refinance for stabilization.

Um, most of our loans are 12 to 18 months. Um, so I mean, we've created a, basically an institutional class fund cause that's what I'm used to building. So we have all the bells and whistles, which makes life easier for me. So if you want to come in and do diligence and tear me apart, I, I, I welcome it. I look forward to those kinds of things.

Um, if you want to reach me, I, you can, uh, I don't know if we have a link for a website, but, uh, you know, you can reach me at KirklandCapitalGroup.com. Um, from there, you can set up a meeting with me, whether you want to talk about due diligence or you have questions more about the fund or the industry as a whole.

I'd love to talk to you.

Michael: Hi, and we currently have the triple net, uh, retail fund that, uh, we we've talked about. A little bit. So if somebody wants to get more information on that, or if they're interested in learning more about how triple net properties work, they can go to my website, michaeljflight.com.

And right at the top, there's the report on triple net properties. Uh, we also. Like I said, I've been, because I've been doing this for so long, I've got partners in, in different, uh, areas. And the other thing I'm really excited about is the single family home sale lease back because it's basically rescue capital for people that are in, you know, financial distress and the banks are not lending right now.

So we also work with them to get them back on their feet and also work with them to get their credit restored. Uh, so. It's a really great story. Uh, and then there's one other thing that I'm working on with another partner. It's a hotel debt fund, uh, and they're the third largest hotel broker in the United States, and, uh, they just have a lot of deal flow and, uh, the great thing about those deals is that, um, All the interest rate is, you know, probably doubles, double, you know, high, uh, double digits.

And, uh, with mezzanine in there, we can mix it in and get it up in the high double digits. So, uh, and the reason why I'm really working with those guys is because they've got the full stack. If the deal goes wrong, they can foreclose on it. And, uh, they know how to structure it, uh, and I've worked with them, I've, I've been partners with, uh, the financing person in that deal, uh, since 1988.

Patrick: All right. And Patrick Grimes, CEO, uh, founder of Passive Investing Mastery. We have two funds currently, um, among the 26 assets we currently have, uh, outside of those two, we have a debt fund and an acquisitions fund. And as we've learned today that the intention of those are, To bring debt and equity to be the source of relief for operators that are distressed, that need a source of gap transactional loans, similar to Chris, you know, we do small balance commercial quarter million to about 2 million.

And we're in everything but office and land. So we, we kind of spread across, but I, we have that debt fund. And if we're the source of them needing or wanting to get out, then we buy it in the acquisitions fund. And so. We don't go above around 50, 60 loan to value on the acquisitions worth of debt. So very much the opportunity to get from the upside of the downturn.

Um, and happy to talk to anybody, PassiveInvestingMastery.com. Uh, next up we have in two weeks, Diversifying Your Portfolio with Precious and Rare Earth Metals. So we're not talking just gold. We're talking about gold and silver, but precious and rare earth metals. We're going to have Louie O'Connor, founder of Strategic Metals.

This is, this guy's fascinating. He has everything from what are the technology metals that China's pulling back and what are the trends and how can you make 30 percent a year on just the appreciation of strategic metals. And then we have Dana, whom I use to buy gold and silver from. He's from, uh, president of American gold and silver.

gold exchange. He's got 42 years and he does more than just gold and silver, but those two are going to be duking it out. We're going to be talking about how that you can diversify your portfolio into precious metals. It's going to be fascinating. Not a lot of people talk about this. We should more, especially in an inflationary environment.

Everybody appreciate your time. Don't forget to reach out to these gentlemen, Michael Flight, Chris Carsley. Thank you so much for your time. Have a good evening.

Chris: Thank you everybody.