The Birmingham Real Estate Investor - Episode 11 with David Oakley

David Oakley: There's a lot of things to watch for and some people are more in the now. I want to make a fee now, I got to get this money out now, my wife wants that new Lake house got to get it out, all right? And greed drives bad decisions.

  Spencer Sutton: All right, everybody. Welcome back to the Birmingham Real Estate Investor, I am one of your hosts, Spencer Sutton. We've got Matthew Whitaker as my cohost here, and we're excited to have David Oakley with us today and David is the Founder of OG Capital and he's Senior Managing Director of Berkadia. So man, David, thanks for joining us.

Thank you guys for having me. I'm glad you guys are doing this. It's interesting in the world that we're living in right now, we have a lot of questions in our space. What do we invest in? What should we do right now? How's COVID affecting our industry? Where are the needs? Where are the opportunities? So I think it's a good time to bring this content to people and I'm happy to jump on. Matthew Whitaker: Yeah, well, we appreciate you doing it, David, you and I have known each other for probably 10 years and we've run into each other a few different times, but I would love for you to tell our audience how you got into real estate. Why real estate? Because you've been doing it a long time, even though you're a young guy like us.

David Oakley: Yeah. I'll be 40 in January so I still feel young, but- Spencer Sutton: You guys already know actually- David Oakley: ... number in my head that crossover is bothering me a little bit, but yeah, I was fortunate to get into the space early in my life. I went to Sanford and studied accounting, really not knowing what I wanted to do. And the only reason I chose accounting was because my high school girlfriend's father was CPA so it seemed like the right choice at the time. David Oakley: I'm glad I did it, did a lot of internships through the years and my mother was a school teacher, my father was an electrician and I knew I didn't want to do either of those, so I was like, "All right, what do I do?" And my first introduction to real estate was really owning a long company in high school. And I cut some yards for some guys who don't have home, they'd investment in homes. And I asked the question like, "Why do you guys own this? How does this work?" And I understood the rental program, paying down principal that's cash flows are making a lot of sense to me. David Oakley: Fast forward to Sanford studied accounting was a resident assistant on campus, so that was my first introduction into managing residents, managing residents in the Sigma Nu House, which was good and bad because I wanted to be liked and I was having to hit people up with damages when they moved out after every semester. But got an internship at Harvard Realty Services back in the summer of 2000. I'll say the fall of 2002. No, the summer, is a summer internship, but I continue to work through the fall and spring. David Oakley: So I was what? A sophomore or junior in college and just worked down the street at Harvard and was fortunate to work with the investment real estate side of the business my mentor who hired me was an old Trammell Crow guy, so he brought some new education and light, shed some real light on the multifamily apartment side and we really just focused on a multifamily. So I was educated in multifamily when I was 19, 20 years old, loved it and decided to make a career out of it. Matthew Whitaker: And did you become a broker or an investor first? David Oakley: Definitely a broker because I had no money. Matthew Whitaker: Okay. Well, tell us about that. So you become a broker and then who did you work with? Did you work with this mentor? David Oakley: So I worked with Harvard, I did the internship that a short stint at Price Waterhouse Cooper after I graduated in May of 2003 and worked summer Price Waterhouse Cooper, knew that, that was not for me, missed my real estate team and missed that office. They launched a new company in the fall of 2003 called Rock Apartment Advisors, and I went and interviewed with Rock and was hired as a full-time employee there at rock the fall of 2003. David Oakley: So it really got to see a new startup, new company from ground up, that was great just to learn how to build a business one, and I started brokering. So I got my license, started selling multifamily deals four units, eight units, 20, I'll never forget selling the Berkeley on Highland, just over my shoulder here, I'm here at five point South right now and I felt like I was selling Trump tower to three million dollar deal. Spencer Sutton: Yeah. It's big deal. David Oakley: Fell apart three times before the fourth buyer bought the deal. And I still talked to that owner and that was some 20 years ago. So I got in there with Rock and I brokered and I always asked the question when we'd have out of town people come into town because we would have mostly out of state investors come through Washington, maybe retired Boeing employees with money set aside to pull out and invest, California, Las Vegas, we had a direct connection to investors through some strategic alliances and those folks would come into town, we'd basically be a glorified tour guide and mix in real estate and we sold several deals that way. David Oakley: I cut my teeth on the South Side. So it was about 10,000 units from 65 to Avondale, now about 12 it's grown. And I was very active in these, four units up to 60 unit range with no onsite management, a third party management located typically in office buildings, and that's really where I cut my teeth and I sold a lot of deals down here. Spencer Sutton: And you said that these people who were buying them, maybe retirees, did you ever come across young professionals? And were they doing this in partnerships or were they individual buyers? How did these people put these deals together that were buying your- David Oakley: Yeah, early on when we were doing more smaller properties that later grew into larger community. Spencer Sutton: Mm-hmm. David Oakley: It was more, retirees or working people who were looking for cashflow, who wanted to diversify their retirement accounts or create some additional oxygens, what I call cash flow oxygen. Everybody thinks better and makes better decisions when you have more oxygen in the tank. Spencer Sutton: It's true. David Oakley: So it was more smaller investors than may be had a 100,000 to 500,000, maybe a million dollars and that they may partner together and join resources with family and friends and purchase a property. That's where it started and then that grew over time. 2003 is when I started about 2004 or five, I was selling, $20 million deals, $30 million deals that were required more of sometimes $20 million equity checks if we got into the 60 to $80 million deals. David Oakley: So it just grew, and what I learned despite my fears, is that selling a 1,000 unit community's just the same as selling a 10 unit community. The process is the same, the type of person you're dealing with obviously is a little bit different, but, we can sit down and have a hamburger or a Budweiser Beer with people from all walks of life and it's just a process. And so yeah, and I enjoy working with, from the private capital side all the way up to the institutions. David Oakley: So, it's a people business and I've really enjoyed that part of it. I love real estate and I love people and I like make a little money too, so that doesn't hurt and I was very fortunate at an early age to meet my career bride. I fell in love with multifamily, I fell in love with this industry. Matthew Whitaker: Yeah, what I think it's interesting is your career projection... The way it projects also is very similar to how investors do it, right? We all start out on the small deals and we eventually progress up to bigger and bigger deals. So talk about the types of deals you do today, and then I'd love to go back to day one, and tell me about your first deal. David Oakley: Sure. So as Spencer mentioned earlier, two companies currently, one is Berkadia and Berkadia is a national company, we have just, around at 278, either investment sales guys like me, brokers, for layman's terms and then on the other side of the table, we have mortgage bankers. So we have the investment sales guys who push and market and find listings, and then we have the mortgage bankers who come in and assist with buyers and their partners and securing equity and debt. David Oakley: So it's a nice marriage and that's why you've seen most of the large brokerage firms go that direction, whether it be, CB Richard Ellis, HFF, et cetera. The other company that I'm involved with is called OG Capital, and from an early age, I would always ask the investors who would come through as a broker, I would always ask them before they would leave, "How did you get started? Why are you doing this? How does a guy like me with no money get on the equity side? How do I get in?" David Oakley: And I would always get right feedback. People want to help you. That's one thing you'll find in this business is that if you have the desire and hunger and you express that, people will come out of the woodworks to help you. Maybe it's just a Southern thing, I don't know, but I think generally people want to see people succeed. So I started buying property as a young broker and I've continued to buy property under this name, OG Capital. And we have a team of about five from chief operating officer, analysts, to marketing, etcetera. David Oakley: And over that period of time from, I bought my first property when I was 22, 8 units in East Lake, and I'll tell you about that story in a minute, but since then over time, I've cobbled together about 1200 units and I have units from Chattanooga, Tennessee down to mobile, and we have our first development under construction currently in Huntsville, Alabama, it's a $60 million round up deal, 275 units, more of a cottage style product on one parcel that all rentals so effectively, it's an apartment deal. David Oakley: So it'll qualify for agency financing, life co, et cetera. So it has all the advantages of the debt markets that are available to us today and we have two other sites in our contracts. So OG Capital is really in the business of buying existing product, value adding it, fixing it up, value engineering it, putting in stuff, branding, et cetera. And second bucket is development. So I have the Berkadia style brokerage, and I have the boss side with an ownership side with OG Capital. David Oakley: You can call it insider trading, but there's a very strong wall in between that says integrity standards and arms length that we follow very closely, and that's worked well in our favor. I think I'm actually a better broker because I am an owner. I understand what it costs to change of toilet flap or deal with a manager who has to take extended leave or whatever. Every property is like a business. Matthew Whitaker: Yeah. This is one of the things that I always tell new people is, "Don't quit your day job." You need to have a job that, you're fortunate, I'm fortunate and Spencer is fortunate that we can have a day job in real estate, but we also invest on the side. Right? And so you don't want to be immediately... Everybody wants to quit, become a real estate investor and immediately start living off their cashflow and that's just not a wise thing to do. And so you even at the top of your game still have a day job that pays for your lifestyle, which allows you to invest totally passively, is that correct? David Oakley: Exactly. I keep my day job, it pays the mortgages, I've got a 16-month-old son at home and that's not cheap. So it's nice to earn phase, it's nice to have a paycheck and it's also nice to have the insight and the knowledge. With Berkadia, we have tremendous insight to deals happening all across the country and that's with better information, you can make better financial decisions which has boded well for us. Matthew Whitaker: Well, tell us about your first deal. You said you bought an eight unit in East Lake. So how did that go? Spencer Sutton: Did you still own it? David Oakley: Well, caveat to that, the very first deal that I bought was my house in Homewood and I had renters with me in an apartment property on the Highland park, just here in Narragansett Bay. And I found this house on Green Springs Avenue with for sale by owner sign in front of it. And I called the old lady and I hit it off, I went and visited with her and then I talked to my banker at NBC bank, that was a new relationship and just had a referral down to Jim Beatty at NBC bank, who's now a capstone and we're doing this deal in Huntsville together. So you never know where relationships will cross again, and I got 103% loan to value on that house back in 2003 or four, just to- Spencer Sutton: Those are the good old days, that's right. David Oakley: Right. And I couldn't believe that somebody's willing to give me a 103% of that actually closing costs, everything paid for. And so that house had unfinished basement and in six months, I had my cousin who was a mortgage broker gave me a home equity line of credit because the value had gone up because I've been to Lowe's on every Saturday, done some work. A lock on the house and a good friend of mine, Dr. Callahan, our foundation called me him Mr. Davis. "We just got this eight unit deal in East Lake donate it to the foundation, I don't want it. We're not going to run apartments out of the foundation. Can you sponsor my to sell it through the brokerage?" David Oakley: He knew I was a broker and I said, "Yeah, I can, but, I'm interested to know, what do you want for it?" He's like, "I don't know, it's just the donation." And I was like, "Well, would you mind if I bought it?" And he's like, "I don't care. That'd be awesome." In fact, I'd love if you bought it. David Oakley: So I got turned down by three or four banks, I had very little money and had a banker friend say yes at the old Red Mountain Bank and shout out to David Sizemore. And, I bought that deal, learned a lot, hired some unqualified people, saw drug deals happening in the back parking lot, and the front parking lot, got calls from a third party manager that I had residents under their beds and bullets were flying over their heads, so I learned a lot about that deal, I named it the Oaks of East Lake and I had it for about a year. David Oakley: It was eight units, all together two baths, hardwood floors, and I sold it about a year later to a guy who actually was in the house flipping business, who was trying to grow into some smaller multis, step up into the multifamily sector and I think I made 50 grand. I was happy and I'm glad to get it done and I learned a lot. So, that was my first apartment deal. Matthew Whitaker: Talk about some mistakes you see new investors make. We were all a new investor at some point, and if somebody is a new investor and listening to this, what are some pitfalls you can help them avoid? David Oakley: Man, first of all, trust and partner with the right people, whether it be your third party manager who you're listing to, a lot of brokers out there will tell you anything to get the sale done and it's important to really have a relationship and trust those people who you're putting your money with, whether it be your third party manager, the broker you're talking to, et cetera. David Oakley: Number two, fully vet the underwriting, I see a lot of new investors flying here and think they understand the expenses or think that if they spend 5,000 they're going to get a 50 to a $100 rent bomb. Just really important to have someone on your team, whether it be again, a third party manager adds a lot of value because they'll do a budget for you on that property typically and then you can vet their budget, compare your numbers to budget, maybe you get to third party managers to give you a budget. If there's a discrepancy, ask why. David Oakley: Commonly missed expense line items are tax adjustment, met a lot of people, miss that. And every municipality, every district can be different and it's easy to miss that. Second one is, insurance, be sure to get the loss runs and get a quote early on the insurance because currently insurance is skyrocketing and it's a big, "Oh-oh, I missed that," that's happening three frequently right now. David Oakley: So know your underwriting, talk to banks early, know what they can and can't do, because if you make some assumptions especially in times like right now, the uncertain times when loan to values or interest rates or flutters or treasury, all this stuff's moving, it's important for you to stay in touch early with your banker and often with your banker because if they offer you say 80% week one, and you're in a week four your contract and all of a sudden they're filling their board mates, and they say, "We're really, we're going to do that pull that down to 70%," all of a sudden your cash on cash yield has changed dramatically. So I'd say starting early on getting your bids, knowing your numbers and staying close to the finance side of it is very important. Matthew Whitaker: Can I follow up with that. We've talked new investors, you work now with a lot of seasoned investors. I mean, some really sophisticated people. So I'm curious, and we haven't asked this before, but what do you see sophisticated investors? Where do they make mistakes? David Oakley: Sophisticated investors make mistakes in a couple of areas. There's a lot of equity out there to get out and so you have a financial system that has tremendous amount of equity sitting on the sidelines, looking for a home. And you have these sponsors operators who will go raise the funds or tag up with pension funds and if they don't get the money out, those pension funds and those money owners will go down the road, down the hall and they'll put the money with someone else. So there's this pressure to get the money out. David Oakley: And by the way, a lot of these funds whenever they give you a commitment, you're paying a pref return on that immediately so the clock's ticking. That pressure unfortunately creeps into the mind of the decision makers. And again, you can make bad decisions. And so sometimes I see big money managers buy thing's they miss important parts of the underwriting because they're going so fast, because they really want the deal to work. Basically, they may turn a blind eye or look to the side and really bond more into their performer or push their proforma too hard, which the proforma they work on a tenure term deal lock her right now a fan of your Friday at 2.8% and a 5% interest only loan, but what happens if you buy that deal for a four and a half cap or five cap, what happens in 10 years when that property is more run down and interest rates are at 5%? David Oakley: How does that affect the value? Has your NOI outpaced the interest rate environment? Because really it's always a race between your NOI and cap rates. And cap rates trend off of interest rates. So there's a lot of things to watch for and some people are more in the now, I want to make a fee now, I got to get this money out now, my wife wants that new Lake house got to get it out, right? And greed drives bad decisions. So as we get into bigger companies that have so much money and more commas and zeros, you would think that they would be more sophisticated. The sophistication doesn't always equal higher yield and it can also mean mistakes. Spencer Sutton: So I had a question here David, you mentioned that when you were learning the business, one of the things you did was you just started getting with people, asking them questions, and you said people are very forthright and they love to help people, what was the best advice you got as you were learning the ropes about getting into multifamily? David Oakley: Good question. Everyone said, and I would talk to guys from San Diego, Seattle, New York and the resounding answer was, "Buy now, buy now, don't wait a day later, get in the deal flow now because when 10 years goes by like this and when that amortization is paying down your mortgage in 10 years, 20 years, you look up and you're like, okay, I've got real equity." And that was the best advice I got and even, and my superiors at Rock, they didn't like me buying because if I bought  the company wanted to buy, which took my eye off of production. David Oakley: I was a W-2 employee. And that was the reason why I left to start my own company in January of 2007, the Oakley Group Inc, which later became a Berkadia Company, still a wholly owned by me, I'm a subcontractor, but that's when I had to make the decision, "Okay, nothing can keep me from my passion, my goal and I want to be an owner." And it was a hard move to make, I was nervous, I was scared, I was 25 and I started hung a shingle down here in five point South. And I started brokering competing against my old company, which I didn't like the sound of that or the taste of that, but it just is reality and earn more. David Oakley: I did a million dollars in revenue the first year, and I got to keep a 100% of it versus a 100,000 dollars and a W-2 with the gym membership to the YMCA and a paid cell phone. I thought I was living large. And I has a good mentor who was counted up to say, "Ah, that's a 90/10 split." Because I was doing a million dollars in revenue at Rock. And they're like, "That's a 90/10 split or what? You need to wake up, you're worth more." David Oakley: And you need guys like that in your life, Matthew's surrounded by a lot of good guys and Spencer going up on each other that well, but you need guys in your life to tell you, "You're worth more than that, you can do more than that, think bigger." Because we tend to sometimes identify who we are and especially at an early age, and then that remains the box you think in- Spencer Sutton: Yeah. David Oakley: ... and it's all about breaking through that ceiling of complexity and breaking out and the sky's the limit. And so that was a really high cliff for me to jump off of, to start my own company, but that transition into more brokerage started Select My Space, which is an apartment finding company that I later sold to some guys in town that went to Harvard and Yale I felt really smart selling to those guys and you guys will know their names. And I started buying more properties because I had more income. David Oakley: And so it's about taking those steps and it's not always easy and it can be scary. So that was early part of my career and with Berkadia full open book, they know that I buy a property. I don't go plaster it on my Facebook and Instagram, but, they were cool with that. Matthew Whitaker: One of the things you've done and I'm interested, it's a long question, but is you've gotten into other lines of business. Now, right now you're basically brokering deals and you're investing, but you said you started Select My Space, which was apartment locator business, you also started a property management company. So talk about the difference between getting into different verticals within under the same umbrella versus staying focused on just one or two things and how your mindset has changed over the years, whether you're still looking for ancillary businesses under the same umbrella, I'm just really curious how you think about that. David Oakley: Yeah, that's a good question. Just to start to Select My Space, part of the reason why I started the new companies is because I get frustrated if things aren't done fast enough or I call it vacancy cancer, it kills a property. If you don't have an occupied home or multifamily units, then the rest of it doesn't matter. I see property management and ownership as leasing maintenance, accounting. You can call it what you want, marketing, customer service, accounting, reporting, right? It's three functions, we did Select My Space really well, we answered our phone between 11:00 and 1:00. David Oakley: We answered our phone after 5:00 during the weekdays, we answered our phone on the weekends. All the times, that third party managers on these particular properties in this area at 50 units and below, they didn't have onsite staff, all the times where their staff were not available. David Oakley: So we just grabbed their market share because that's when people were looking to rent. We saw a problem, we had a solution. That transpired into, okay, well, we're doing one well, and I have a heart for people and have a heart for people living in their homes. This is their home and one of the top three reasons people will rent is for maintenance, I don't want to do this, I don't want to do that, I want to do this, I got work, I want to travel, whatever. David Oakley: When it's probably a top five maintenance is in there. And I had this white glove put on the booties and leave the note that I've been in here. I really wanted to create an experience for people. I was listening to a Tim Keller podcast and it was about ministering to people in the city. And so I wanted to turn my career and apply my career and align that with my passions, my heart, my desire to be aligned with my overall mission and mission statement. David Oakley: So we started Blue Canoe Properties, and we grew to 80 properties in three years. And it was crazy. I mean, we were printing statements late at night, I learned a lot. It was hard to make money in the property management business. It really is. It's a service business and it's takes rare people to do it. A mentor of mine came to me one day, he said, "You need to sell both of those, you're taking off in brokerage. Hey man, wake up." So I sold Blue Canoe, I sold Select My Space and once I get to enough scale with OG Capital... David Oakley: Right now we use third party managers, we have four that we use from Chattanooga automobile, eventually once we get enough units and I'd say enough units means by two to 5,000 units that justifies having an in-house management team, that's probably in the cards in the future, but ancillary man, I'm always thinking about stuff, we were in a meeting just before this call, thinking about a software app that would be mind blowing and very useful. So I'm always trying to find solutions in our industry that could be disruptors and I'd love to hit one or two by the time I turned 60. Matthew Whitaker: That's one of the things that I love about you is you're very visionary, you've always got unbelievable ideas, I was bouncing some ideas off you I think it's probably been nine months ago about, some things. But the other thing, for people that are listening to this, David is sitting in a tee shirt, can't tell if you're wearing jeans or shorts or whatever, but, right before that, you were out walking properties too. So you're still out hustling, you don't have people that are out doing that for you. You're actually physically out walking some properties. So, tell us what a day in your life looks like these days I know every day is probably different but- David Oakley: Yeah, every day's different and every day's good, I love what I do and it's fun to get up every morning because every day is different and we have a great team. Like yesterday, I'll rewind, yesterday we picked our buyer for a listing we had at Berkadia, a 722 unit deal on Valley Avenue, just here at home. We picked a buyer yesterday at 80 plus million? I can't give the number, but 80 plus million, we had 15 offers North of 75 million, we dealt with the COVID flying people in and out. We had a tremendous outcome and we picked our buyer so that felt good to put that in the buyer's lap last night. David Oakley: Institutional capital behind the buyer, they have six billion under management, quality sponsor and operator this be their first deal in Birmingham so I worked really hard on that listing was probably a good 90 day busted, grind, calling people, emailing, getting people, selling that deal. And then also yesterday I did a pitch on a 100, well, I'm going to say 80 to 100 exact. 80 to a 100 million dollar property, and pitched for the listing. David Oakley: I brought in the mayor of Hoover because it's in a Hoover and had him speak to the ownership who were some highly influential people in the country, which you guys would know if I said their names and we're hoping to win that listing. Meanwhile, I drove up to my Lake house last night and I got up this morning to meet one of our renovation teams on two mobile homes that I bought so is like, "Here's my like house." These are the first mobile homes I've ever bought and I've really been fascinated with mobile homes modular, have studied it for the last five years and so this, these are two good lots, and I was like, "All right, I'm going to rent these and play around with these and learn these things in and out." David Oakley: And the lots were worth what I paid so the homes were just a bonus and they're not bad shapes, we're going to clean them up and rent them and the name of the LLC is win-win LLC. So you  side by side, the mother daughter I had. And so I came in this morning and met with, Oakworth Capital Bank in this, I apologize a little bit and then met with my energy capital team, podcast with you guys and I'm leaving here to go down to 82, a property we just listed, 100 Eminence is the name of that one, it's a $40 million deal, we're going to launch it September 8th I believe right after labor day, and we'll take that out to the market. David Oakley: We typically go out to about 10,000 people, we'll have signed CA's and about 200, we'll get 15 to 20 bids, we'll pick five and invest in final round and then we'll pick one. It's usually a 30 day marketing period and we try to do that 10 times a year, so Valora one on Valley, 100 Eminence we like to do that about 10 times a year, we call them weddings, fire seller, walk them down the aisle, Merriam, music, flowers, do it again, wedding planning. Matthew Whitaker: We need to pick up some of some David-isms. Spencer Sutton: Yeah, those are good. Those are good. Matthew Whitaker: Talk about why people choose Birmingham. I mean, you're flying people in from all over the country that are investing in Birmingham. What are they telling you that they're looking for? And why does Birmingham meet that? David Oakley: Yeah, Birmingham has always had a pretty high barrier to entry just geographically was our hills, mountains, rock, municipalities which have a high degree of nimbyism not in my backyard, Hoover Home with the stay in Mountain Brook because they really don't care a lot about permitting new apartments. Hoover downgraded their zoning to 70 units an acre several years back, very hard to make a deal work that way, almost have worked around but not. David Oakley: Secondly, people love Birmingham because of the diversification of the job base, historically community, high medical community over 11, 12 hospitals in the metro area. Automotive has been tremendous because between Vance, just West of us, 30 miles with Mercedes, Honda and Lincoln, just East of us and Honda South of us and now we are the  North of us in Huntsville. A lot of those people who work in those plants, they live in Birmingham to take advantage of our school systems because a 30 minute, a 20 minute an hour drive commute means nothing to people who have lived in Atlanta, DC, Raleigh, et cetera. So not a big issue. David Oakley: So we have a really diverse job base. In times of recession like in '08 we were top 10 metros to bounce back from the '08 recession because of two things, healthcare and education thrive in recessionary periods. Our aging population plays into that, and secondly, people go back to school when the job market is thin and we're fortunate to have some great academic programs and schools here in Birmingham with UAB, the Birmingham, Southern Samford and then a whole host of other community colleges and trade schools. Matthew Whitaker: I'd love you to expound on that. I mean, we're in a recession and with- David Oakley: No. Yeah, I feel it. Matthew Whitaker: You think so? So we're recording this on August 18th, 2020 and so we do have a lot of healthcare here. Talk about why you think Birmingham will thrive even through this weird pandemic time around. David Oakley: Yeah. I think our cost of living is still very low and we see in migration trends continue to be consistent on the positive side for Birmingham. People are moving here to be around their kids who have chosen to live in Birmingham, either they went to school here and they stay here as a retention rates are higher for people who go to school here, they plant here. That number has vastly increased in the last 10 year period, a lot of those same younger people were graduating and going into the Nashville's, the Raleigh's the Charleston's that Austin, Texas Denver's and Chattanooga. David Oakley: And we've seen that much higher retention right there because job growth is better, jobs are cooler, our business community got together and so let's launch some incubators, let's get higher tech, let's get some breweries to have some things for them to do after work, all right? Let's get bus regions ball field downtown. So we have more vibrancy in use now in our ecosystem, which I think and that so now mom and dad's a family and the household formation grows, then mom and dad want to be near the kids. It's a multiplier effect. David Oakley: And so cost of living, household formation, overcrowd, the cost of living in our competing cities like Nashville, Raleigh, they're much higher than that, that has gone up, not to say that that hasn't happened in Birmingham, but I think it's a combination of all those things, but sometimes people miss the underlying spirit of a deal, and in this case, it's the spirit of Birmingham. You guys have felt it, I felt it. Leadership better, young mayor, leadership is stronger, people are stepping up. Spencer Sutton: People care. David Oakley: People care, the older population passing the Baton. And they're writing checks to support. For example, UAB's football team. Merrill Stewart told me they got in the room with the drums and this and that and some big families in Birmingham, and within 15 minutes they had raised the money to bring UAB's football team back on. Matthew Whitaker: Wow. David Oakley: That's the leadership and talking about just that spirit of Birmingham that we don't always... Like Chattanooga, I mean, they have an incredible spirit of the city, the arts, the colors, they support a wide range of people. And local municipalities get along, right? And change happens and we're getting more and more of that thought pattern in Birmingham and quite frankly, we have a little Huntsville MD, which I think is driving some of that fuel and fire, which I think is good. I think it's really good. Matthew Whitaker: Yeah. Nothing like having somebody out set in the pace, try to catch up with them to- David Oakley: Right. Matthew Whitaker: ... get you motivate them. So, well, what is the client look like for you? Tell me what the ideal client is, you're obviously pitching some pretty big clients, does your team also help buy the smaller deals, the 50 unit to a 100 unit deals? David Oakley: Absolutely. Yeah. Good question. We still love doing small deals. I'd say that our cutoffs 20, 30 units is a minimum we like to do. And I've got some guys on my team that are really strong in that area and deal with more the smaller side private clients and new investors, so we could do a 20, 30 unit deal, we really like to walk with people and build their portfolio because started there so I had a lot of empathy and desire to see people achieve their goals. David Oakley: And I will never judge anybody, because I did at once, I'll tell you about a mistake I made. A guy approached me once and came over from Atlanta. I won't say his name. And he said, "Hey, David, we should buy this management company together, I'd like to start investing. I want to do 50/50 with you." And I said, "Well, cool, what's your track record?" He said, "Well, I own four condominiums in Destin, Florida." And I was like, "Scott..." I just said, no, it was just like probably 2008 or nine and I said, no, brushed it off, I was totally you go to school about it and prideful and today he's done probably close to five, six billion dollars of acquisitions over- Matthew Whitaker: Gosh. David Oakley: ... so, I don't judge any of you watching and you can, the sky's the limit. Spencer Sutton: Right. You got to start somewhere. David Oakley: You got to start somewhere. Matthew Whitaker: Well, this has been great, David. David Oakley: Yeah. Matthew Whitaker: I think it's a good time to wrap it up. I appreciate your time, I know it's super valuable and I appreciate your friendship and being able to call you up and ask questions and you just give us some great advice and some really good feedback. So thank you so much for this time. David Oakley: Yeah. Thanks for joining- Spencer Sutton: Thanks David. David Oakley: ... I think you guys are doing a good thing. And if anybody wants to know more about multifamily, we do have several smaller deals listed right now, and we can help you with banking relationships, start forming managers, talking to some good ones right here and we'll be glad to help? So thanks for your time. Spencer Sutton: I wish for contact information David so they can reach out. David Oakley: Yeah, the best way to reach me is, at my Berkadia email to keep it simple. Just david.oakley, O-A-K-L-E-Y, like the sunglasses, david.oakley@berkadia.com. That's B-E-R-K-A-D-I-A.com.