Introduction 0:03
Welcome to the Elevate Your Equity Podcast where we, as married busy professionals, leverage real estate investing to unlock the three plus one degrees of freedom, health, location, time and financial.

Derek Clifford 0:16
Hello, everyone, and welcome back to the Elevate Your Equity Podcast. And we have a great guest on board with us. We have Dr. Johannes are playing in. Did I have to do that? Right, Dr. Johannes?

Dr. Johannes Urpelainen 0:29
Close enough, close enough. It’s Urpelainen. It’s a Finish name.

Derek Clifford 0:33
There you go. Okay, I’m sure you get that a lot. But for those who don’t know, he is a real estate entrepreneur, and professor at Johns Hopkins University, and his company, Oasis Equities focuses on hospitality and multifamily deals, and he has over $2 million in personal equity spread across currently 450 units. And He’s an avid passive investor and financial freedom enthusiast. And today, we’re gonna be talking about something very interesting, I’m sure for most investors who either starting out or a little bit on the road towards doing their own deals is research, data analysis and underwriting. Okay. But before we do that, let’s find out a little bit more about you. Dr. Johannes. Can you tell us a little bit about how you first got excited about real estate investing in general? What was that that first spark that you found early on?

Dr. Johannes Urpelainen 1:24
For me, it was really, I was looking for ways to diversify away from the stock market. So I had just got my professorship at Johns Hopkins started building my consulting business and bringing in, you know, more income than I needed for my expenses. And I was working at the stock market, and already back then this was around 2018 2019, the valuations were kind of back there, that really, if you look at how much you need to pay to buy $1 of income a year, it was a lot of money. So I was wondering, is there a better way to invest? I stumbled on the syndications and started making investments and did very well on them. So that was really, I was just trying to get away from the stock market.

Derek Clifford 2:11
Very interesting. And so where did you find that I know that you’re looking away to from getting away from the stock market? Did you encounter it in a book? Was there a mentor you found? Or did you find someone else who was doing it already? What was that actual moment that you’re like, Oh, I better start looking into this.

Dr. Johannes Urpelainen 2:27
I think it was actually initially just on Google, I think I was just looking for like alternative investments or something and I get crypto and I get all kinds of things. And then I stumbled on some of these kind of bigger syndicators who do a Google ads and things started to check them out. And I remember when I saw a pro forma, so you know, that spreadsheet that shows you how the deal is going to perform, at least in the operators, daydreams, I was very impressed. Because I was like, wow, I can actually understand how this business works. If you compare that to stock market investing, you’re buying Apple or Google or something, you really have no idea why the cost is this or anything else with real estate. I was like, Okay, this seems pretty logical. So I thought that was really great.

Derek Clifford 3:16
Yeah, that’s awesome. So I actually have not had a guest come on and say, I found it through Google. I mean, I’ve had a lot of guests come on that say that they have been, you know, they were introduced to it, or someone told them to look into it, and then it started. But for the fact that you went to proactively look for a way to fetch a return on that dollar diploid, so to speak, right early on, was very cool, because I never, I haven’t heard that before. And I think it makes a lot of sense. And we’re probably going to start hearing a lot more stories like that as we go on. So I’d love to love to hear that. Now. One thing is, maybe you can tell the audience a little bit more about what you do, because you still you know, you’re a professor at Johns Hopkins University. So your approach is to be more research, data analytics and underwriting driven. So have you always been interested in underwriting and research? Is this just part of what you do as you know, as a as a PhD? Or, you know, where did you get this this love for underwriting properties based on your experience to being introduced in the space?

Dr. Johannes Urpelainen 4:16
Yeah, so I certainly in my my day job, I do a lot of that I teach data science to our students. And I use a lot of those skills in my own research as well. So that was kind of like a natural starting point. If you think of a typical real estate deal, there’s a few things you need, somebody needs to go and find the deal. Somebody needs to do the research, come up with the business plan. Then there’s the kind of equity investor relations, and I done underwriting the research part was the one that was kind of easy for me, the others that do some of those as well, but that’s the one that didn’t take me very long to figure out how to how to do that.

Derek Clifford 4:54
So it seems like it was pretty much a natural talent for you, right? It was something that you could easily pivot into from You’re so so called full time gig and into your into your side hustles, which makes a lot of sense. That’s good. So can you talk to us about what the process looks like for you, when you’re underwriting deals? And when you’re performing market research? What are the key indices that you look for? Can you just give us a flavor of what it looks like in your world for you to start looking through these things step by step?

Dr. Johannes Urpelainen 5:22
Yeah. So I think it’s important to distinguish between the hospitality and the multifamily, which are the two sectors where I’m active. So on the multifamily side, it’s a fairly conventional story, right? You look at the rents in the area, you look at what the property is doing right? Now, you look for opportunities to increase value add, you look at the kind of market prices per unit, you look at the cap rate. So how much do you need to pay for $1 of income, you look at all those things. So that’s how it does. But I actually spend a lot more time these days, underwriting Hospitality properties, which, in a way is more complicated, because first of all, demand is more fluctuating and seasonal, right, you can have properties that produce like five times as much in July, as they do in November. So depending on when you close on the deal, your first year will look very different, right? So there’s all kinds of interesting things there. But my first cut is actually very simple. I look for a hotel or motel or Airbnb, or whatever, that already has a 10 or higher cap rate. Okay. So basically, I What that means is that by $1 of income a year, I need to pay less than $10. Right? It’s as simple as that, right? And then if I see that, and I see a value add opportunity, there was a decent chance that I can bring it up to a 15 to 20. Cap, at which point, it’s like my personal ATM machine making a lot of money. And so that’s where I start.

Derek Clifford 6:56
And you mentioned cuts as well. And I know we’re playing on the hospitality side. But I also want to touch on the multifamily side, because that’s my jam. And I want to be able to extract some lessons here as well from you, selfishly, of course, but you mentioned first cut was looking at 10%. What does that first cut look like in the frame of the entire process for you? Like, how many cuts? Do you have? Like, are you looking at that from the lens of investor? Or you investing your own capital? Or are you looking at capital preservation or cash flow or appreciation? What type of things you’re looking at with each cut that goes into your underwriting?

Dr. Johannes Urpelainen 7:34
Yeah, so I think the way I would think about it is that the first cut is really just doesn’t make any sense to even dig deeper, right is that there’s a lot of properties out there that you get, whether it’s broker or listing, or just off market direct to seller that still make a lot of sense, right. So you’ll quickly see that there’s very low chance that this is going to work out. So I’m just going to move on to the next one.

Derek Clifford 8:01
It’s like screening, so to speak.

Dr. Johannes Urpelainen 8:03
Yeah, exactly. It’s really like a very, very high level quickly get rid of those that are probably not going to work out. And then if it makes sense. I think Step Two typically would be to get financials. So you try to get what is happening at the property right now. Are they? What are their leases? What are their room rates? What are their expenses, and then on the other hand, get the Market Report. So I use costar, they have good reports, both for hospitality and for multifamily. So I looked at them and then I tried to figure out if it’s correct or not. So one challenge is, for example, with costar is that it’s a 12 month period, right? So even today, we look at the cap rates on Costa, they look like very impressively low. And then if you look at actual recent trades, you’ll see they’re obviously way higher than they used to be. Nobody’s gonna do a three cap today, whereas a year ago that people thought that’s cool.

Derek Clifford 8:57
Yeah, got that. Okay. So that makes a lot of sense. And I appreciate that. Now, what about on the multifamily side? Is it the same type of thing as well, I know that, you know, we have cap rates on multifamily as well. Are you looking at rents like for each, you know, for the room type and the area? Is it does is it looked very similar or is there any modifications to that from the hospital?

Dr. Johannes Urpelainen 9:19
I think there’s a few key differences. One is in multifamily. When you do the screening, you end up like throwing away a lot more deals than in hospital. Only difference here that the multifamily you have to underwrite a lot of deals before you find anything that makes sense. But then if you find something that makes sense, the execution is kind of straightforward. I don’t want to say easy because it’s not easy, but it’s simple in a sense with hospitality is the opposite. It’s very easy to find good deals, but then when you actually have to make them work you have to do all kinds of interesting things. So I would say multifamily you that the rent upside is key, right because was the challenge with multifamily is that the cash flow is difficult to find today, the assets are still too expensive even though the rents have gone up a lot. So that means that if you want to make any money, you have to have a lot of value. Like it’s really hard to buy a stabilized cash flowing unless you’re happy with like 5%, six person, cash flow. Nobody’s happy with that, let’s be honest, right? So. So as a result of that, you have to have that value in us. So you spend a lot of time and it comes down to really little things in multifamily, right. Things like pet fees can be a big deal or like parking, right? Whereas in hospitality, it’s all about like, how, like, how much money can I get for this week or something. So it’s the little things are less important than the big things are sort of more flexible. So I think there are two different multifamily. I think it’s very detail oriented. Hospitality is almost like creative, you know?

Derek Clifford 10:55
Yeah, I like that. That’s a good way to break it down. And I appreciate that. Before I go on, I wanted to take a little step backwards as well also, and get your insight as to how you’re picking some of these markets. It’s no secret out there that you’re a big fan of the Southwest. The Sunbelt, or, I’m sorry, se I’m in the Sunbelt, you know, Georgia, Florida, like in those areas, because a lot of the population growth is heading there. And there’s all kinds of metrics that are showing all of that. But what in general do you do when you’re looking for not necessarily a region, but you’re actually looking for a market to pick inside of a particular region of the US like the Sunbelt, for instance? What what, what helps you pick apart some of these sub suburban areas versus urban areas? And things like that? What do you what do you look for in those? And how do you find them?

Dr. Johannes Urpelainen 11:41
I think that’s a really interesting question. So I’m not one of those investors, who has like one market that I know, like, every street every hour, that’s not my style, I actually have properties in West Virginia as well, I have Arkansas, close to home there soon. So so I’m all over the place in that sense. But I think the things that you would look for are, one is, if it’s a kind of a very, like, you know, in demand market where there’s a lot of sort of action, then it really has to be the round, right? Right. Because what will happen is, let’s take a market like Orlando, or something where the cap rate is very low, right? It means that it’s very difficult to make anything to cash flow. But the flip side of that is that if you can add $1 of income, the value is gonna go up by like $20, then you have a 5% cap rate. And what that means is the value add opportunities are amazing. So markets like you know, Phoenix, or Orlando, or stay in New York City are kind of places where if you can be a little bit creative and find some way to add value, you can either refinance or sell for a very, very big profit. So that’s what I would be looking at the market markets like that. So rent upside, and then you add in more like cash flow markets. So Arkansas, West Virginia Midwest, I would really be just looking at the kind of load basis and good cash flow. So somebody might ask, how did you end up in West Virginia? That’s not a state that’s known for its, but there’s just a few markets there where you can make a lot of money on Airbnb every night. And you can buy a big house for $100,000. That’s what’s gonna happen in Orlando, right? So there’s a big opportunity in some places like that kind of like markets that are great. But people don’t know that they’re great, because they’re not in Florida or right, Austin or something like that.

Derek Clifford 13:32
Yeah, absolutely. I think that’s the biggest key. And I love what you said there that you’re not married to one particular market. And I think that’s really smart. And one thing that I really like to tell people who are new to the commercial space, or even that are in the commercial space, but don’t remember this is that if you are able to increase the cash flow, right, by $1 per year, let’s say, let’s do some really crude math, right? You have 50 units, or no, we’ll call it 100 units, and you’re able to increase the rental revenue by $1, or the net operating income by $1 per door per year, right? You have 100 units. So every month, you’re gonna get looks like $100 extra per month for all those units. Well, because there’s 12 months in a year, it looks like you’re gonna get 1200 bucks per year, because of that $1 increase. And what’s crazy about it, right is you say okay, well, how much value does it add because of the low cap rates? If you have a 5% cap, right, then you multiply that 1200 bucks by 20. And that gives you a $25,000 increase approximately right I’m I don’t have a calculator at hand. But that’s that. If you’re in Phoenix or Tampa or some of these, like really low cap rate markets, like three and a half percent, I mean, do the math there and it’s like you’re multiplying that 1200 bucks on the $1 per month of noi per unit. You’re multiplying that by like 30 times, right? Because it’s it’s one over the point. Oh, you know, point oh five or point oh, are three five, right? And so you’re getting this insane return based on every dollar that comes in. So I really love that fact that like you’re looking for the value add but also in the low cap environment. And maybe where there’s a little bit of combination of both of those where you can get a little bit of cash flow just to push to push up the push up using the the low cap rate environment to help get some value at the end. I love that really great.

Dr. Johannes Urpelainen 15:20
This is something that I think a lot of people don’t realize. So I’ve done some Airbnb s, and I love a good Airbnb, it’s a great way to, you know, get some income going. But the challenge with many Airbnb s is that you can’t do that because the valuation is based on the residential valuation. So if I buy a house, and if I add a lot of value by making it really nice with decoration and staging and furnishing, the next buyer who’s looking for house doesn’t care, because it’s not their furnishing. And the declaration for Airbnb is very different from what you would have at your actual home. So I can do the value add, I can only add cash flow versus multifamily, every dollar like you said, you can multiply it by 20. And you can get it all either by refinancing, which is based on the net operating income or by settling. So you also have multiple exits, which is which is really cool.

Derek Clifford 16:15
And the multiple exits thing that was key for me, when I saw that there is multiple ways to exit the deal, you can either hold it, that’s one exit strategy in a way you can refinance your investors out or you can you can sell right. And there’s other things too, you can do, they can do installment sales, seller finance, like a whole bunch of different things that you can do to help this and that those exit strategies when you have those in mind, or you have the idea in mind to allow yourself multiple exit streams or exit strategies, it’s going to make you and your investors very, very happy to be able to pick and choose what works for you in the end or what’s best for the market right now. I love that. Thank you very much for that. So going back to underwriting, can you talk about a little bit about how long you’ve been underwriting properties and how your approach has changed, especially over the last couple of years, because where the market is now versus where the market was your underwriting has to be has to adapt? Right? So maybe if you could speak to that, I’d love to hear your thoughts about it.

Dr. Johannes Urpelainen 17:17
Absolutely. So I actually started underwriting as a passive investor. But as a passive investor, your strategy is very different. You kind of take somebody else’s underwriting, and you just poke holes in it, you’re trying to figure out like, what are they missing? Are they selling snake oil, and you’re just trying to figure that out. So then going into active and trying to do it yourself is is more challenging. I will say that initially, when I started, I was I spent a lot of time under the news property, I was really trying to get the numbers exactly right and everything. Now these days, I am a firm believer in in that first cut. So I’ll put in some expense ratio, like 45%, or something, if I happen to know in that market that they insurance is like this, or the property taxes like that, I’ll throw it in. But I don’t like the small stuff as a first cut. Because in the end, until you actually do the due diligence and get all the information, you’re just making up stuff, right? I mean, it’s there’s no way to get that right until you get much deeper. The key thing is like, the way I think of it is that if your results are like super sensitive to tiny changes in the insurance rate, maybe this is not a deal to go for you, you’re looking for something where there’s like a comfortable margin to work with.

Derek Clifford 18:34
Yeah, I love that. I love that too. And we’re going to explore that in just a little bit. And so that, obviously, is what you’re doing now. Has it changed a little bit over the years? Like when you first started? You know, back in 2019? Were you still using that type of method and whether it worked in that period of time, then go for it? And is it the same thing that you’re doing now or has it changed?

Dr. Johannes Urpelainen 18:56
I think there’s two things that have changed. One is just like, initially, I was a lot more kind of detail oriented, because I was new, and I prayed about making mistakes. And I realized that’s sort of not where the mistakes get made. But back then I thought that’s how the product works. But the other thing, of course, the market has changed, right. And the biggest thing that I have seen recently is that you really gotta be very careful with the interest rate on the law, right? Because it’s a lot higher, and you add, let’s say you go from four and a half percent, that means your payments really go up, right? And that means you need to stabilize a lot faster. You need to just be prepared for the for the cash flow, you might struggle with refinance. So I make a pretty like pessimistic assumptions about the interest rate. That’s probably the biggest one. I also add just the cap rate. So in the past, I used this rule that like your cap rate needs to be like you increase it like incrementally every year. So About the same and that’s how I learned it. But today, if you if you start your full cap, and you increase it by 0.1% a year, you’re going to be so badly off because the cap is probably more like six and a half now. I really like one thing I don’t like doing is when I see people buying like fairly stabilized properties with like negative leverage where they the cap rate is below the interest rate. That to me is crazy that somebody is actually like, paying more than they’re making of that thing. So when I see deals like that, I just thought, like, I can’t deal with that. That’s, that’s terrible.

Derek Clifford 20:34
Are the people that are making those deals, are they based out of Vegas because that’s kind of the game they’re playing right now is gambling?

Dr. Johannes Urpelainen 20:41
Yeah, pretty much. I think what happened was that people got used to this idea is that the cap rate only goes down and it goes down very fast. Yeah. So then people say like, oh, I can buy a three cap? Because, you know.

Derek Clifford 20:58
It’ll be two and three quarters in a year.

Dr. Johannes Urpelainen 21:00
Yeah, exactly. Exactly. And then people, I think what many people miss was that the interest rates were actually like unusually low. And I think there’ll be a right now might be, this might be where we are going to be, we’re probably going to go up a little more, because the Fed needs to fight inflation, then at some point, they run out of money, the government is going bankrupt, and all that they need to come down. But I don’t think we are gonna go back to like 2% mortgages or anything anytime soon,

Derek Clifford 21:28
Right, I kind of have that camp to, I think you’ll have this like, what’s going to happen is there’s there’s a, there’s the the the strain on the US market with the increasing of interest rates, and then there’s a strain on the global economy too, because while a strong US dollar is good for us temporarily, it’s actually going to have a bad impact on our trading partners out there, right. And so as we make the dollar stronger by raising these rates, and having it be, I forgot where I call it, where I heard this, but basically the cleanest dirty shirt out there right now in the current economic state, which by the way, I should give a disclaimer, we’re in q3, q4, just barely q4 of 2022. So we’re just starting to see the Fed hike up the rates. And so I think that there’s only a certain amount of room where maybe the Fed will start tapering off the increases, but keep the increases until they watch the numbers come down, then we’re going to start to see increased unemployment, and the Fed will have no choice but to lower rates again, and that’s kind of my thought here with all of this.

Dr. Johannes Urpelainen 22:29
I agree on that. And I think it’s always very important to remember what like why countries get into this, like zero interest rate environment, and why they can’t get out of a system like Japan, Japan is notorious for having like 30 years of zero, real interest rates, their commercial real estate values peaked in 1990, they all have been coming down since so we really don’t want to be in that environment. It’s, it’s kind of like one of those, you eat like Tsuga, and you’ll get this like high in your energy, but then you’ll feel really bad for a long time. I think that’s what we’re gonna get here with this money printing.

Derek Clifford 23:09
I think you’re right, I think you’re right. The good thing is, though, is that as the US we have the global reserve currency. So that obviously, is a huge advantage, and something that Japan would have loved to have had. So there’s a big, big difference. And I think, the United States investing in the US and buying hard assets here is the way to go because international investors are still putting pouring money into the US, and for a lot of good reasons. So anyway, this is a this is a great macro economic discussion, but I do want to bring it back real quick to underwriting before we have to wrap up the call, or wrap up the podcast here. But what I wanted to ask you is, what does conservative underwriting mean to you? Because there’s so many operators out there that say that one of their selling points is they have conservative underwriting, oh, we’ve got conservative underwriting here. We’ve got conservative underwriting there. So maybe you can open up the hood a little bit and tell us what to you is conservative underwriting right now with the disclaimer that it’s quarter four of 2022.

Dr. Johannes Urpelainen 24:11
So I think the most important area where you have to be conservative are those things that you can’t really control that are kind of unpredictable or somebody else’s control. So what I would be looking at on the multifamily side is definitely the exit cap rate. So when you sell How much do you think you’re gonna get for that? If that isn’t like in line with the interest rate projections, that is always a very bad sign, but now you’re expecting it’s kind of like a Ponzi scheme. You’re just pushing it to the next buyer. And then at some point, that’s not going to work. So so that’s one. The second one is very aggressive refinance plan. So one thing that I’ve seen where people are really able to kind of like juice the returns is like they assume that 12 months later they’re going to refinance at a Very low cap rates, right? The banks typically want to see a few years of really stable and solid performance before they go in with 80% leverage, right. So that I think is another one. And third one is the expense and rent growth, right. So you see these people like assuming 5% rent growth a year. If you assume that, it doesn’t matter what the deal is like, you’re always going to call macrosomic 25% IRR. Because that means that three years later, your rents up 20%, which means that your income is up by 70%. So you don’t really need to do anything if that’s true. But again, in today’s environment, it’s probably not true, I really, most markets, even the solid ones, we’re probably going to look at two to 3%, and possibly some dips, right. So those would be I think, some of the key things where I always check out, I think that’s where the real conservative assumptions can be made.

Derek Clifford 25:57
I love that, thank you for sharing that. And I think I’m 100% in agreement with you, making sure that you’re doing some cap expansion, each year that you hold the property right to make up for the for the risk, and then also, your refinance and your exit, especially for a refinance, like adding on an extra two or three entire points on to your percentage point what you think you’re going to get, the more your loan at. And if not, then that’s great. And then keeping in mind that inflation doesn’t only just affect rents, it also affects your expenses, right? Keep that in mind, too, because you may have 4% increase projections on your income, but also four or 5% increase on your expenses as well. So the people always get scared of seeing that or underwriting that. But the way I look at it is you have an noi, that’s still increasing, because you have increased income and you have increased expenses, that delta is still going to get bigger, it’s just a ratio, it’s going to stay more or less the same. But remember your debt service, if you’ve picked that up at the at the right rate, and it’s flat for you know, three, four or five years, then as your noi starts to expand even as income and expenses grow, your debt service will stay the same. So you will start to make money over time. So don’t be afraid to be conservative in saying I’m going to have 5% Rent expenses, or 5% rent growth and 5% expense growth, that is something as an LP, that I would be looking for an underwriting to say, look, you know, whatever the inflation is going to be, just know that the NOI is going to grow, because both are growing against the debt service. So the cash flow should also be growing too, as long as the debt is right. And it’s fixed in there. So I love that. Thank you. Now, I have a couple other questions here, but we’re running out of time. And so I’m gonna have to pick one left. And what I’m fascinated about is someone like you, who is very well versed in underwriting and picking the right investments to deploy your dollar to try to get as many dollars as you can back. Can you describe how and why you made these forays into multifamily built to rent and now short term rentals and hospitality? Like what made you pivot into all those different directions based on your what you’re seeing with underwriting and, and what’s out there.

Dr. Johannes Urpelainen 28:13
So I think with multifamily, it’s fairly straightforward. It’s like I think if you’re a real estate investor, that should be the kind of staple of your portfolio, because it’s fairly unlikely you’re going to lose a lot of money if you find the right market. So it’s a good kind of conservative foundation so that you don’t lose your shirt right? Build the rent, though, we have a housing shortage, we just need more housing, and built the rent is a great way to do that, especially now that the kind of difficulty of getting mortgages and everything is is increasing. So to build the rent is great for that hospitality short term rentals is the cash flow. So I think you always should have some real cash flowing portfolio in your portfolio. And that’s something where multifamily is not very good is that I’ve been investing in multifamily now for three years. And for many of my investments, some of them are only now starting to come like we were cashflow those with short term rentals, three, four months and you’re just crushing it. So it’s a nice balance the moral sort of value add multifamily player.

Derek Clifford 29:17
I like that you have a different approach for a different reason in your portfolio, and you’re balancing everything out by being diversified in the commercial real estate space. I think that’s really, really cool. I love that approach. Okay, last question I have for you is what advice do you have for folks out there right now who are looking to underwrite properties in today’s market or in the market of tomorrow in 2023? What do you think? What do you think people should look out for as far as red flags when they’re on the hunt for properties?

Dr. Johannes Urpelainen 29:44
I think the key thing is it depends a bit on the market, but there’s a few things that are always going to be a challenge one is certainly financing. So I’m getting a really like wide range of term sheets depending on where On which bank and Which seller on everything. So financing, just try to understand what your options are and build these banking relationships. Because if you don’t have those, it’s very hard to underwrite, the banks can really disappoint you sometimes, right? So that’s he has one. The second thing is understanding the costs on the expense side. So again, there’s some things that are pretty standard, like utilities and like minor repairs, fairly easy to estimate if you know the condition of the property and the climate and everything. But there’s some other things like insurance and property taxes, where you just have to know like, you have to get quotes and and those can really be quite significant. So I would just learn them. I think that’s important. And then the third thing is that always be looking for ways to add value really, like that’s in the end, the reason why real estate is a great investment, I think the number one reason is actually forced appreciation that we can actually make these things cashflow better, and more valuable. So you should always be looking for ways to do that, even if you’re failing to do it. And you’re not sure just try to be creative, like think of every possible way to increase that income. And that’s really the name of the game.

Derek Clifford 31:11
Yeah, I could not agree with you more. I think that sound advice for folks out there, if you can’t find a way to clearly add value, or the sponsor that you’re working with, as a limited partner cannot articulate that well, or it doesn’t make any sense. That to me would be the first sign that something isn’t right. And NOI is everything these days, I honestly like it gone are the days where you can just count on low cap rates, right? The net operating income increase is the insurance policy, because if you have operating income, you have more exit strategies, right. That’s what I’ve been looking at in all of these deals is making sure the NOI is there, and that there’s clear value add that supports that noi growth. So that’s, that’s kind of my final thoughts on that. I don’t know if you have anything else to say on that. But I think we hit it, we hit it pretty well.

Dr. Johannes Urpelainen 31:59
I think that sounds great. So I think there’s a lot of buying opportunities in the 12 months, because this distress and the challenges we are facing. There are also problems for the current owners, right? So there’s gonna be people with like bridge loans coming due, there’s going to be people who are struggling with the rising insurance rates. And the way to think about that, I think is a win win. So you go in, it’s not that you’re trying to exploit somebody, they have a problem they need to sell you are there, you’re ready to buy and close fast. Yeah, it’s a big opportunity for everyone.

Derek Clifford 32:32
Absolutely. Absolutely. All right. Well, thank you so much, Dr. Johann is for coming on. This is awesome. I do have one final section of the show, which is the Rapid Round, it’s the same five questions that we ask every one of our guests. And if you’re ready, we’re just going to rapidly ask them to you in just a second. All right, number one, what book has had the biggest impact on you and why? And we’re hoping that it’s not Rich Dad, Poor Dad or the Bible? Because that’s what we get all the time?

Dr. Johannes Urpelainen 33:01
That’s actually a very difficult question to answer because I read a lot of books. But I would say that the book that had the biggest impact recently is Don’t Sweat The Small Stuff. It’s kind of a psychology book about how to be happier every day. And I just love it.

Derek Clifford 33:21
That’s awesome. Everyone keeps forgetting about why we’re working so hard in the space. And it’s important to have that perspective. So I love that very much. Number two, if people wanted to emulate your success, what do you think is the first actionable thing they could do to follow in your footsteps?

Dr. Johannes Urpelainen 33:41
To the extent that I’ve had some success here, I would say it’s really finding the right partners to work with. I think I think partnerships are everything in this business. And for me, my success comes mostly from just having the right kind of more experienced mentors and business partners with whom I’ve been able to close these deals.

Derek Clifford 34:03
Yeah, I cannot say that any better than you just said it. It’s very important to have that I think that being surrounded by the right people will hold you accountable, and mentor you and give you the right advice. So it’s your job to audit those folks. And make sure you’re listening to the right people. So awesome. Love it honest. Thank you. Number three, what is one tool process or hack in the last three months that’s helped save you time and or effort on either your business, your work or career or your personal side?

Dr. Johannes Urpelainen 34:33
It has to be these costar market reports. So until last summer, I kind of pieced together the data and took me a lot of time and I wasn’t sure about that. But now I have access to the actual like full market reports a complete game changer. I’m spending so much less time doing these first cuts that I can just review a lot more.

Derek Clifford 34:56
That’s awesome. Great, good stuff. All right, number four. If the people that you know, had to describe you with one word, what do you think that word would be?

Dr. Johannes Urpelainen 35:06
I will say some of them would describe me as kind of analytic or, like a quick study on the positive side. Others would describe me maybe as a bit impulsive.

Derek Clifford 35:19
Well, I’ll tell you what we will we’ll allow the audience to choose which one they think is most appropriate. But I, I don’t know. I like I like the analytical one. I don’t I don’t like the impulsive word. I don’t think that you’re impulsive. Alright, number five. Number five. What small thing do most people not know about you?

Dr. Johannes Urpelainen 35:38
Well, I would say what people don’t realize is that I’ve actually done military service back home in Finland. I was in the artillery.

Derek Clifford 35:48
Thank you. I love that. And I’m sure that your your country back at home very much appreciates that. And that’s awesome. It’s great to great to hear and see another military veteran here on the show. I love that. So Dr. Johannes, thank you so much for coming on the show. It was a pleasure having you on but before you go, why don’t you tell the part the people on the podcast listening to the show right now, how they can find out more about your world what’s happening and how they can get ahold of you?

Dr. Johannes Urpelainen 36:17
Yeah, so the easiest way to get in touch is certainly through LinkedIn. So just, you know, send me a connection request, send me a message. And let’s talk more if you want to learn more about the business, check out Oasis equities.com. We have a website where you can find the portfolio, lots of guides for investors, latest YouTube videos, and all that good stuff.

Derek Clifford 36:40
I encourage everyone to go out there and follow you and what’s happening in your world. I know you have a lot going on. But you have so much to teach. And I really love your approach about looking at the actual numbers and asking the smart questions because there’s just needs to be more of that in this world these days, especially with the very rocky time that we’re in with investing. So appreciate your perspective. And, man, thank you so much for coming on the show.

Dr. Johannes Urpelainen 37:04
Thanks for having me. This was good fun.

Derek Clifford 37:06
Absolutely. Yes, it was fun for me as well. And for you listeners have made it all the way here. I want to thank you guys so much for coming on the show or listening to the show. And please, wherever you’re listening or you’re watching this, please interact with us thumbs up, like subscribe comment, we want to hear from you about whether or not this is adding value. And this is helping you in your personal journey as well knocking the three degrees of freedom. And we really want to appease those algorithm gods as well because the more interaction we get, the more exposure we’re going to get to more and more individuals. So thank you very much for listening. Dr. Johannes. awesome to have you on. This is Derek. We are signing off for the day. Take care, everyone!