So, why don't we go ahead and get started. I'm David Way, I practice in Greenwich, Connecticut, and welcome to our ICL on real estate. And the purpose of this ICL really is to cover all sorts and types of real estate, including those that you might consider in your practice, like surgery centers, which LT Donovan will talk about, or other types of medical office real estate, which Greg Bird will talk about, and Nick Rose will give us an introduction. My portion will be about personal real estate investment, so it's just going to be a brief primer, but hopefully introduce you to the topic and some concepts. So thank you for being here today, and Nick Rose will get us started. Hi everybody, thanks for coming. So this is a little unusual topic for this type of thing, but something maybe a lot of us don't know a lot about, and everybody has sort of a different situation. So I'm going to go over just some of the general things here. Just some questions to think about. Everyone knows about these Stark Laws, and so which of the following is currently not a Stark Law exception? Referral to another physician in your group, in office, ancillary services, referral within prepaid health plans, or the whole hospital exception. Which of the following is not an advantage of leasing your office space? So lower cost, flexibility, equity over time, or market availability. And then finally, which of the following is not an advantage of purchasing your office space? So we have equity over time, the ability to really lease unused portions of your office space, property availability, and tax benefits. So the first part of this is going to cover some very boring terms, more like you'd see in an economics class, but I think that for general talking points, this will help throughout. So first we have net operating income, and really that's very simple. If you own a property, it's really your rental income minus your rental expenses. In other words, your profit. So your cap rate helps you value your real estate. It's the relationship of one year's NOI to the lump sum value. And that's, again, assuming that there's no debt on the property. So your cap rate is going to be your profit divided by your value, basically. So a lower cap rate is going to be a higher sales price in general for you, whereas a higher cap rate is going to be a lower sales price. Triple net release, abbreviated NNN, this is a lease in which the tenant is responsible for all the real estate taxes, the insurance and the maintenance. So this is probably the most popular lease structure, and that's as opposed to what we call a gross lease, in which the landlord is responsible for all those expenses. So these in general are going to have, of course, a higher rental rate than the NNN, and then it's really not favorable for investors because there's really more money involved and really more property and time management for this. So as David spoke, talked about, we're going to cover some of these different topics, ambulatory surgery centers, hospital ownership, medical offices, MRI, CT and imaging, and then PT. So I'm going to really talk sort of generally about office space, but this is one of those terrible wordy slides they always tell you, don't put too much verbiage on a slide, but it's really more for your handout and when you go back to really see what these Stark laws are. But basically, as many of you are aware, Stark laws prohibit physicians from making referrals to certain designated health services payable by Medicare in which they have an immediate, in which they have a financial relationship, but there's exceptions that apply. So it basically prohibits an entity from presenting or causing to be presented claims to Medicare for those related surgeries, but there's a lot of exceptions that have come about that grants the secretary the authority to create basically exceptions for certain financial relationships that they feel do not pose a risk of patient abuse. So these are some of the Stark law exceptions. Of course, you can refer a patient to your partner in your office. That one's maybe obvious to everyone. In-office ancillary services, this is like having a lot of internists have a lab in their office and many of you who go to your doctor get your labs in your doctor's office. That's the case. You can refer within prepaid health plans, academic medical center referrals within that are fine, implants in your ambulatory surgery center, and then many of these Stark law exceptions require that whatever financial relationship you have has to reflect a fair market value. So there's this whole hospital exception. This is kind of bounced back and forth. This was one of the initial exceptions and basically it allowed physicians to refer patients to a hospital where they have an ownership interest in the hospital itself, but not merely a subdivision of the hospital. And this was an exception in the original Stark law in 2003, they made a prior effort to limit the whole hospital exception and they really focused on specialty hospitals. And then in 2010, they finally eliminated the whole hospital exception and they really limited future physician ownership and investment in hospitals. So the whole hospital exception only applies to physicians granted in before December 31st, 2010. Now as an aside, that thing you see on the side, the Hoag Orthopedic Institute, we are part owners with 50 other orthopedic surgeons in Newport Beach and we own that orthopedic hospital and we got that permit in on December 30th, 2010. I think we're the last specialty hospital in the United States to come in just under that deadline, so we were fortunate with that. So physicians must own or be invested in a hospital before December 31st, 2010. You can't expand the hospital capacity, so it's frozen in terms of existing capacity and the percentage of physician ownership. And then another exception with this was that it can't have been converted from an ambulatory surgery center before March 23rd of that same year. So that's a little overview. Stark laws are very complicated. If you're going to do any endeavor, I recommend you get a real estate attorney or an attorney to look stuff over because you don't want to get in trouble with this. So the bottom line is you have an office, should you go buy an office space, should you rent your office? And it's really a complicated question. It depends on a lot of things, really the size of your group, the need for your future growth needs in your group, cash flow, available financing, tax implications, market availability. What is your equity position at 10 years, 15 years, and 20 years? And then are you somebody who's two years in practice? Are you somebody who's three years from retiring? All these will have bearing on this. So we're going to just generally cover, show you now this is renting or leasing your space. So why do you want to just do this? Well, it's easy. I mean, you just go in, you pick a unit, you pay your rent every month. So it's very flexible. If you want to move somewhere else, you just get out of your lease and you move somewhere else. You get landlord concessions. A lot of times they'll customize the space for you, put in new carpet, make changes. So that's a benefit of it as well. It's lower cost overall. And it's really less complicated. I mean, you add a new partner, they pay part of the overhead. Partner retires, they stop paying the overhead. So it's very simple in terms of that formula for the people you have working in your office. Other pros are market availability. I mean, if you go out there and look for a property, as most markets, the lease properties are going to outnumber the purchase availability about 10 to 1, tenant improvements, and then a free build-out period. So it's probably better for smaller groups. Here in Newport Beach, California, we rent in a place called Fashion Island. And it's four buildings with every specialty you can in there. So we thought about buying somewhere, but it was kind of more in Irvine. And Newport Beach is one of those quirky, wealthy areas that people, God forbid, they drive seven minutes away. It's a different neighborhood. They won't do that. So that factored into our decision. So the cons. I mean, obviously, the con is you have no equity over time. It's not an investment. In a sense, you're throwing away that rent money just to be there. You're really, you know, if your rent goes up, your rent goes up. You really have no control over that unless you move to a different building or a different site. And, of course, you have less control over office space or expansion. You know, if you're on a floor that is occupied by the doctors and you want to add two or three exam rooms, well, you have to wait for that doctor to move out or maybe get something on a different floor. So pros of purchasing an office space. Well, it's a valuable asset. Capital goes towards ownership and not in the landlord's pocket. Annuity after retirement. I think when you recruit new physicians, this is, you know, a little perk for them, knowing they're going to be invested with us. You can a lot easier get health care specific financing, probably easier than you can for other type of financing. You know, you don't have to worry about rent increases because you're your own landlord. You can lease unused portions of your office. If you have, you know, 6,000 square feet and you need 4,000, you can rent that out to another doctor or therapy facility. And then, you know, they're principal paid out when you're leasing. You get nothing at lease end. When you own it, you have a favorable balance sheet, usually after about 10 to 15 years. There's tax benefits, of course. You can write out depreciation, mortgage interest deduction. And then what some people do is they retain the property and then they lease the hospital system for additional income. So, you know, you can sell to a real estate investment trust or hospital system and then lease back. So that's kind of you're having a little bit of both where you can sell it and make money on your investment and then lease back and, you know, once again, you're in the leasing market. Well, what are the cons of purchasing an office space? It's more permanent. If the neighborhood changes around you, well, you're still there. Higher real estate prices and desirable zip codes. This was one thing for us because if we wanted to stay close to that desirable section of town, it was very expensive to get real estate there versus if you went, you know, three, four miles inland. And there's just less available. As we talked about earlier, it's about 10 to 1 in terms of what you can lease and what you can buy. If you're hosting tenants, if you have like a whole building, say five stories and you're on one of them, you're going to have lengthy periods of, you know, where you're looking for tenants, you have empty spots and you're going to be losing money on that. And then overall, you just have higher costs. And that's a little complicated. I mean, you know, how do you buy out a retiring partner? I mean, you know, obviously, if you buy this office space and you have a partner that's retiring in two years, I mean, you're not going to sell it so he can get his profit or he or she can get their profit. So you have to figure out a formula for that. And then, you know, there's economic and financial downturn. You could always, as we talk about, sell back to the hospital or do a sell or lease back. So just some recommendations. If you are going to do this with your group, I would recommend you keep the real estate LLP separate from the practice. Just have a separate agreement for that. And then you want to state in the partnership contract that the partner must be practicing orthopedics or whatever their field is in your office to be part of that investment. You don't want two or three retired partners still, you know, gleaning profit on that property. And then you have to spell out very clearly the buyout. If you have a partner that's clicking down or partially retired or less busy, you want to make sure that that's outlined as well. So we go back to our questions. Which of the following is currently not a stroke law exception? That answer is D, as we talked about. That whole hospital exception was eliminated in December 2010. This one probably a little bit more obvious now to you, which is not an advantage of leasing. Of course, you have no equity over time. That money goes into the landlord's pocket. And then finally, which is not an advantage of purchasing your office space? And that's the property availability. As I talked about earlier, it depends on the area, but you have probably about ten to one in terms of what's available to lease versus what's available to buy. So thank you so much. We're changing the order just a little bit, so I'm going to go next, and then we'll hand it over to Greg. And this portion is about personal real estate investments. I have nothing to disclose here. I'm just curious. I think many of us may have interests in real estate. Anyone here in the room, if by a show of hands, have personal real estate investments? That's great. So I hope this is not too redundant, but I'll give you an example of how I thought through this problem and how I continue to think about it today. So many of you probably already know this, but there's a lot of reasons to own real estate yourself. I want to go through quickly those reasons and how you can look at different types of properties, how you evaluate the deal, some of the basic terms that you might think about, how you could consider funding the deal, management considerations once you have the property, and then of course tax benefits and other considerations as you use this as an investment. Many reasons to own real estate, I think some of them are already stated by Nick Rose. I think that as you think about real estate investments personally, they can be a source of what we might think of as passive income versus your full time job. We'll speak a little bit more about that at the end in terms of how passive you may want that to be or how active you may want that to be. You can certainly think of it as a path to retirement. I think that if you own any real estate, you might already realize this, but oftentimes you can think of it almost as a 401k, but it increases in equity on its own in time. It is an investment vehicle truly, and there certainly are tax advantages, and there's a lot of consideration too in terms of wealth transfer as you start to think about retirement. So in general, when thinking about how you categorize properties you might consider investing, I think it's useful to think about how large the property is. So single family homes, we all own probably homes or are renting homes. So those are the typical kind of homes you might think about. Multi-family technically is between two to four, and the reason why it's two to four units is really because of how you might fund it or the types of loans that are considered for these properties. And of course, you could also invest in larger apartment complexes. And once you get to more than four units, it's really considered commercial real estate, so different types of funding opportunities. One thing that I don't have on this slide that you might want to consider, and I think Greg might touch on this, are other types of syndications or other types of REITs. So this technically doesn't follow my talk just because those are even more passive, so I think that's kind of a separate investment type. So if you're thinking about it, it's important to try to learn how to evaluate the deal. And as many people would say in real estate, I think most of the money is made up front. What is your purchase price? And this applies both to medical real estate and personal real estate. But as you're thinking about these terms, Nick has already mentioned cap rate, which is very important in terms of how you can quickly evaluate whether it's worth it. Especially if you do want to take on a mortgage, that's a very easy comparison to make. The NOI, the net operating income, tries to take into account all your expenses. And the income is easy, but the expenses is the hard part, so figuring out what goes into that. And comparables is interesting. So single family homes is a completely different beast compared to multifamily. So you might have experienced this looking for your own home, but comparables don't really matter for multifamily. So multifamily homes, you really have to think about the NOI and not other complexes. So if you looked at comps for your single family home in the neighborhood, that doesn't really apply for multifamily. Terminology, I think these are very typical. So revenue, expenses, vacancy rates is something we don't often think about, but something very important to consider. There's definitely going to be some vacancy, and you just have to figure out how much to factor that in to your investment, NOI and cap rate we've talked about. So you can fund the deals many different ways. You may have some cash that you want to invest, so that might just come straight from the bank. There's obvious advantages in terms of liquidity. You don't have to rely on a bank or a person or an institution for this money. You have conventional versus non-conventional loans, and I think understanding the differences is important. But in general, I think conventional loans are probably what most of us would consider. You could also think about more creative ways to fund. So let's say you have some partners or friends or family that want to invest, and this might be for later on as you develop this yourself. But once people have some confidence in you, they may choose to invest with you. So that's another consideration. And then, of course, if you can create this deal, you can also create owner financing. Property management. So this is the hard part. I think a lot of us, most of us are probably full-time surgeons, and you might consider this to be too much. And I think that was my personal story. I thought, you know, it's not worth trying to handle a full-time hand surgery position and still try to own property. But I think what I realized, and my family history has owned a lot of apartments in the past, and I thought, well, how can I turn some of this time that I have and turn it into passive income? So I think property management could be as little or as much as you want. And if you find the right property management company, you just have to be willing to pay the rate. But in terms of your time, it might be worth it. So you can certainly do it yourself. Growing up, I would go fix toilets for my dad's apartment. You know, I'd do all of it. But, you know, you may not have that time. So I think if you're considering more passive income, you could certainly find a good property management company. The other things to consider, you can invest remotely or you can invest locally. And if you are investing remotely, obviously you need somebody there to kind of manage. There's a lot of considerations in terms of that. You need somebody kind of on the ground, almost like a supervisor to help you. So it does help to think as you kind of build your investments, you should also be building a team behind them. Okay. So I think this is probably what a lot of us are interested in. You know, tax considerations are tough. You know, full disclosure, I'm not a tax accountant by any means. So I think that any advice that you get should really come from your accountant. But there certainly are a lot of considerations to think about. First, you know, depreciation of any of your holdings is a rule from the IRS. And you can use this depreciation for deductions. So as you think about taxes, kind of think through how that might affect your W-2 income. And there are certain rules about this, but you could essentially deduct a lot of your rental income. And that can make it almost tax-free or tax-deferred. So that's a big consideration. This is also true for capital gains tax. As you consider transferring properties or buying other properties, if you flip them, you can save on capital gains by doing something called a 1031 exchange. So these exchanges are interesting. I think there's a lot to read about it. But think about these issues as you go through this. Okay. So this is an interesting case. I just wanted to present. So I have a partner in this investment. But it's an interesting case because one of my partners, not in medicine, but outside, was starting to invest in Nashville. And excuse me one second. I just want to get some water here. I'll come back to this. So, you know, Nashville is kind of a growing population. They do have a lot of multifamily homes. And these duplexes were kind of growing in a very popular area. So as we were thinking about these purchases, I think we came across a very interesting opportunity because these duplexes were in a highly sought-out neighborhood. And their purchase price was about $300,000. And then we started looking at their rent. And the rent was pretty good. And I think that was about $33,000 annualized. As we were considering this, we started calculating these terms. So the NOI, for example. This actually calculated to be about $19,500. If you think about this number, you can calculate the cap rate, which is if you do the math, it's about 6.5%. So this is really where it gets kind of interesting. Thanks, Frank. Sorry about this. Okay, thanks. So this is where it gets interesting. Once you figure out these cap rates, you can really start to think, is this worth investing? A lot of these mortgages have been climbing in terms of rates. And the cap rate kind of determines maybe you should use a mortgage or maybe not. As rates increase, you really have to pay attention to see how it matches with your cap rate. So at this point, earlier this year, in March of 2022, our cap rate for this property was 6.5%. But the mortgage rate was about 4.2%. So kind of a back-of-the-envelope calculation. You can already think about this as maybe a 2% investment. Maybe not. So there's a little bit more to that calculation. But it's an easy way to kind of think about this. So we put down 25%. We used a conventional loan. That was about $75,000. And we factored in a 30-year 4.25% mortgage. If we calculated the principal, the interest, the tax, the insurance, it comes out to about $15,000. The cash flow is really what I think is key here. And this is probably the most important point of my whole talk. But as long as this property is cash flow positive, which in this case, it is very kind of a small amount, $4,200. But as long as your cash flow positive, your property will increase in terms of its equity over time. So there's a lot of considerations in terms of how you calculate this. But each year, the rental income will increase by probably 2% or 3%. So the first year, the yield on this equity after you pay off your principal is 5.6%, which I think in the broad scheme of things, you might consider the stocks are doing well or not. So you kind of have to think about whether it's worth it. But certainly, at least for now, in this state, with our current stock market, it probably is good. So thank you. Thank you. So, now you decide that you want to invest in real estate. And I'm going to talk on the medical side of things. So, I'm a private practice in Olympia, Washington. We own our own facilities, about 17 partners. And so that's where a lot of this experience comes from is how this has grown. So, one disclosure which I'll talk about is there's a thing called the Congress of Physicians on Medical Properties. And it created a fund, and I'm an investor in that fund. And CMAQ Partners is kind of the one that has started that. And we'll talk about them a little bit later. So, investing in medical real estate, I'd say there's kind of four paths. There's one, just go at it alone. The other is with your partners in your group. The other is with a partnership not in your group. So, this would be a hospital, private equity, a builder. And then the last is your REACH or your Real Estate Investment Trust. So, invest as an individual. So, this is kind of the easiest way to go about it, right? So, you get some money together, you go find a building, and you finance it, and you move in or you're there. So, you know, this has a lot of the benefits that Nick talked about earlier where, you know, you're a guaranteed tenant. And if you're investing, making sure you don't have a lot of vacancies is important, especially in that commercial real estate. I will say, though, and we've kind of talked on this earlier, is that we're physicians. We're not bankers. We're not lawyers. And a lot of times we will kind of dabble in that market. But it's important to seek some legal advice because you can really get yourself in trouble. And a little bit of money up front sometimes is painful to do, but it can really pay dividends on the backside. So, do not hesitate to get somebody involved. And to that it means really having a separate LLC for your property is important because it helps to, you know, if there is an unfortunate event where you get sued for your medical practice, you would hate to have them take your building. And so if it's a separate company, you can help to avoid or mitigate those issues, as well as in terms of just how you structure it for your leases. So, again, you pay a lease to yourself. Everything's great. You can control everything. You get more money. You know, again, the cons, cost more to start up. And, again, it's fixed, hard to move, as Nick had talked about. Now, again, I think another thing is the more people you inject into this, the more money that goes away, right? And so that's one of the other things you've got to think about is when you start looking at partnerships and these things, you know, they're going to be skimming something. So the less you can get them involved, the better it's going to be. So, you know, this is really kind of the basic one. I think, you know, for a lot of people that's going to be really hard. The one- or two-person group is not as prevalent now as it once was. So I think this is going to be the most common. So you have a group. You're looking to buy a building. So, again, the advantage, you get to share the risk, make a larger purchase. Money, these same benefits. You know, you're paying yourself rent, guaranteed tenant. The tenant improvement's really not as much of an issue because if you're putting money into it, you're going to get that back, as well as you can modify the property accordingly. Now, one of the things we're going to get into a little bit is that so now it's not as simple. And, again, Nick had talked about this, as well, in terms of buying in and buying out. What does that look like? And so when you start talking about value, there's a lot of different ways you can go about this. So I will tell you you want to avoid something called a fair market valuation. And the reason is is that it's really hard to determine. If you talk to your surveyors and appraisers, they will tell you that the bank oftentimes will help to dictate the terms of how that building is valuated. And what this gets into is the value of the lease. So there's the initial cost of the building, which, and there's an example we'll use later, but let's say that it's $10 million. But a lot of the value comes from that guaranteed lease, and we were talking about commercial real estate, of having a lease of 5, 10, 15, 20 years. And so the bank, a lot of times, will want to undervalue that and say, well, how much does it cost if this thing burns down? But from an investor's standpoint, or if you're in the process of trying to sell it, you're going to try to increase that valuation of what that lease is. And so it's important to recognize that that can really cloud the picture when you're buying in and buying out people in terms of what that structure looks like. And so that's where the cap rate comes into play, is a lot of these will have a definitive cap rate that is somewhat of a fair market value on local real estate. And that way it's a little more consistent, and you don't have some of those fluctuations like we've undergone recently. And we're in the process right now. We've got a couple of buildings and going to be building another one. And so CPOMP is this meeting, and it was back in July, talking about medical real estate throughout the country. In the past two years, there's been a 20% inflation associated with building, just building. And so it becomes really difficult when you start talking about valuations. And so now you're starting to see some market adjustments associated with that. So where this comes into play is when you talk about your cap rate, again, net operating income over current fair market value. Well, you can really leverage that fair market value a lot, which can dramatically change these things. And this is, again, where having someone on your side that understands this and is a real estate lawyer can help prevent some problems on the backside. Because you're 10 years down the road, and all of a sudden one of your partners wants to retire. And you say, well, OK, we paid 10 for it. Now it's worth 15. Like, well, actually, we can do a sale lease back, and it's worth 25. So I want half of that. And that's where problems become. So this gets into that whole buy-in, buy-out and structure are forced. And I like this slide. And the reason the guy on the left versus the right, obviously different lens that they're looking through. But a lot of it is where they are in their career, right? So the young guy is like, hey, this thing's not worth that much because I don't pay this old guy that much to get rid of him. And the guy that built it has been there for a while is like, this thing's a mint. I built this for you. I want a lot of money. And so that's where a lot of this comes into play is trying to figure out, OK, well, how do we figure this out? And so one of the things, again, that was mentioned earlier is you really got to be careful and make sure that you don't have people hanging around that aren't working. And so a forced buy-out is something that's going to help to maintain the practice. And I think that's the lens that I'm coming at this from is what is the best for your practice in the long term? And really, a forced buy-out at retirement is going to be that because most people aren't excited to be working and paying overhead to somebody who's just collecting the check and not involved in the practice, right? So how do you go about that? And we had Mike McCaslin with Somerset, who some in the room might know from the ortho forum, come and help with this. So we structured it where you have A and B shares, and it's worked out very well. So we have our Olympia Orthopedic Associates, which is the clinic side, and then there's the Olympia Orthopedics Property side. And there's an A share and a B share. And so the A share, $100,000 buy-in for everybody. The B share is over time it's accrued as people are bought out, as equity is created, and there's a 10-year vesting schedule. And then there's generally buy-outs or pay-outs of some of that cash to help buy down those B shares. And then when somebody retires, it's a five-year buy-out schedule. And so it's all very structured, very organized. But I think one of the other things that's important to really think about is these property investments, you have to view it as retirement funds. And some of the accountants, when they come in and get involved, will tell you, you actually have to, if you're going to do a cash-out, you need to sign here on the dotted line and recognize that this is for your future investments in retirement and not to go out and buy that boat. And I think one of the other things you also have to think about is you ideally want to keep relatively low equity in your buildings because it helps to reduce what that buy-out is. And so what comes there is some frequent refinances where you actually can pull some cash out and do some dividends. And while that slightly increases your mortgage, you're not creating this huge equity buy-out as people start to retire. And it also helps to decrease some of those problems you're going to have in terms of inequalities and differences there. And I think whenever you're entering this, it's always important to just think about, where am I coming from on this and what's my lens and where am I viewing this? So again, this topic they have literally week-long meetings about. So we're just kind of touching the surface on this. So partnerships. So this is, okay, now we're going to go out and find an outside investor to come in. And we're seeing a lot of this now just in practices with private equity. But there's other partners you can have involved as well. So some of the benefits, again, you're putting up less capital. Now, historically, money was cheap. You could get 2% or 3% for some practices, and a lot of times if you've got a thriving practice, no personal guarantee is needed. You know, it's getting up now 6% as the feds are trying to clamp down on inflation. And we're going to go into a recession. I think it's pretty much guaranteed. So money will get cheap again, but we're probably two to three years out. So in terms of who can you find as a partner, well, commonly a builder or a contractor, and that's kind of the path that we have gone on for one of our recent projects. But, again, you've got to know your terms. And this was one of the things initially we were looking at doing at JV with the hospital, and they wanted part of the operations as well as the real estate, and that looked really pretty unfavorable because there's a surgery center in it. So then we started looking at a contractor. Well, and this, again, is part of those fine details. So there's ROI, right, return on investment. Well, the deal that was written actually was more of a return on cost. So it was a percent return on the cost of the building. Well, guess what? They're building the building, right? So they're incentivized to make this as expensive as they can. And for their subcontractors, they put a 4% charge on top of that. For the supplies, there's a 5% or 6% charge on top of that. So all of a sudden, now they're increasing the cost of the building, which also increases how much they're making long term. So we're going to renegotiate that and look at possibly buying them out. But, again, this is part of those things where you really have to be careful because there's a lot of devil in the details. And when you think about an indefinite percent return on those costs, it can build up pretty quickly. So hospitals, you know, one of the advantages of a hospital is you can build loyalty. But, again, at what cost, right? So if you've got some hospitals are involved or hospital systems have their own insurance plans, and so it can help to guarantee those patients are flowing through your surgery center as well as your clinic, which obviously keeping it full is important from a financial standpoint. But are they going to try to be majority owners? Are they going to try to take control? And then what restrictions do you have moving forward? So I think a lot of that is a function of what your market environment looks like. I know Arrowhead in California has taken some minority hospital partners for that purpose, but it's on the 20% range, not 50%. So I think it can be beneficial, but you just have to be careful because, again, the more hands in the pot, the more money you're not seeing. And if they're getting involved, they want to take a cut. And the reality is that's on your backs, right? So outside investors, so this is where the private equity, this C pump come into play. And, you know, again, they're looking for a return as well. But, again, this gets to the thing you have to recognize is the value in commercial real estate is that lease. And your practice is that value. And you've got to make sure you don't undersell yourself. And I think a lot of times physicians do that. I don't think we appreciate how much value we bring to an organization and how much our sweat equity is really worth. And so you've got to be careful about how you structure these deals and what you're willing to give up. Now, again, there's a little less risk on the front side, but you're giving up a fair amount on the back side. And I've got a slide that gets into that. So I think when you're structuring these deals, you have to think about what is this going to be? Is this going to be a five-year relationship because I want some capital to buy them out? Is this a 10-year deal? Is it a 20-year deal? And, again, depending upon how long-term you're thinking can somewhat deal how you structure it going in, which, again, is important. And, again, a lot of times with a lot of these commercial loans, it's a 10-year balloon. So you're refiing every seven to ten years anyway. So it's not like your conventional home mortgage where you're in this thing for 30 years and you're paying it off. And, again, as we talked about earlier, you really don't want a lot of equity in your real estate because then that's a lot more you have to pay to buy people out later. So this is a busy slide, but this is a recent cost analysis that our organization did. And, again, we've changed the numbers a little bit, but you can get the sense. So this is a 50-50 JV with a builder on the left and doing it on our own. Now the cash required was about the same. On our own, what's not reflected here is a refi in our building where we're pulling out cash. But I think that there's a couple of important things to really recognize, and that is this cash distribution, right? So it's a 50-50 split on profits. And so what was surprising is that 10 years in, right, your cash distribution is not that different. So for an extra $6 million up front, you're not really getting a lot in cash in your pocket until you're 10 years out, right? But what you start looking at is that equity in the building, right? So, again, you build it for 67, it's worth 74 and then 90, and so now all of a sudden your 50-50 partner's got $52 million in equity, you've got to buy them out 20 years down the road. And so that's the real issue here. Now, again, a lot of this is, is this real equity or not, and how do you do that? But, you know, these are some of the things you've got to think about. And, you know, as Nick had talked about, if you're looking at your cash distributions, I mean, you know, finding a partner and having them share some of that up front isn't a big deal, but you've just got to recognize that it does get complicated as you go down the line. So let's say you're like, you know what, this is all too complicated, I don't want to deal with this. So that's where a REIT would come into play, right, so Real Estate Investment Trust. And there's some that are private, there's some that are publicly traded, medical only. You know, there's been a big move recently into medical real estate, because even in a downturn, and I think even when a pandemic hits, guess what still stays full and still pays the rent, medical real estate. So a lot of people find medical real estate very attractive. One of the things, again, to think about is this wholesale leaseback, and Nick had kind of talked about it. So what you can do, and it's kind of like the private equity of real estate, so they'll come to you and say, all right, we'll buy your building, but we need a 10-year guaranteed lease. And so what they're doing is they're paying you a bunch of cash up front to then have you pay more for the next 10 years. And so a lot of this, like the private equity deals, is a function of which lens you're looking at. Are you that young person that's like, I've got 20, 30 years left, if I'm paying this much more per month, that's not a good deal. But if you've got five years left, you're like, sweet, I'm cashing out and we're out of here, right. So, I mean, a lot of these private equity deals, you're taking a 30% haircut for five years up front. So your retirement in a couple years is a good deal, but if you've got more than five or ten, it's a bad deal. But that is a way to cash out and, again, to get a big lump sum of money. And this is also where you've got to think about that lens because if you've got an older group with younger guys coming in and they're looking to get some money, they could force, say, a leaseback or a sale of the building, which is really not in the best interest of those younger partners. And so you've just got to make sure that it's structured accordingly. So lots to take in, but thanks. Applause Yeah, I know your lens, LT. Even though I was having a hard time before. There you go. All right. So basically now about real estate for ambulatory surgery center. I'm going to start this off that in college, you know, when I went to school back in the 70s, it was a pyramid. And so everyone started at the bottom, wants to go to medical school, and it kind of weed everybody out. So I would say, you know what, I never really got a very good education in college. But one class I did take that I was able to take pass-fail that I use to this day was real estate. And I've learned more from that and also applied that to my everyday life. It's been amazing. And what they've told you today so far really is very applicable. I've used the 1031 exchange to my advantage, which is great. You should read about that, learn about that, and see how you can apply it to your personal life. And then also, as Greg has talked about, old versus young. Well, you can tell I'm toward the older part. You know, I want the money now. And I would encourage you to come. We have another ICL on private equity, how it was a significant battle between the young guns and the old guns about what to do about private equity. But anyway, real estate for ambulatory surgery. So let me just say our group, Summit Orthopedics in St. Paul, Minnesota. And so we have a total of 60 physicians, 40 of which are surgeons. We have 30 shareholders. In our ambulatory surgery centers, we have five, and we did 7,000 procedures. We got almost 1,000 employees, and our revenue is about $200 million a year. Of the five surgery centers, we own three outright. Two of these are part of a multi-clinical thing, you might say. So it's a combination. It's our office building. So we have surgery center, OT, PT, clinic, things like that. One is a freestanding surgery center that's purely orthopedics, but also we lease that site, and it has an additional ophthalmology surgery center and urgent care in it. We have one co-management of our own surgery center with a hospital chain, and we have 80-20 control of that. And actually, we negotiated quite a bit to make up our 20% loss, so to speak. And then we have one that we're just helping to take over now. We're a minority partner, but gradually we'll increase that to where we have probably another 80-20 situation. So the first thing you want to do, and if you go back to our instructional course lecture in 2019, is do you really need an ambulatory surgery center? So you have to look at this very hard and do a good analysis to decide do you want to have this. So in an orthopedic ambulatory surgery center, it's very profitable. There's a higher margin procedure rate, meaning that we have kind of a fixed number we have to reach to pay our expenses. And after that, we generate a lot of revenue. And so basically the kind of basic rules, you're going to do between 2,000 and 4,000 cases per year, and that's generally done with about four operating rooms. And again, you really want to sit down and have a feasibility study. And you say, well, what's this got to do with real estate? Well, it's going to determine what type of facility do you want to do. Do you want to buy the land, build the facility yourself, or are you going to find one that's out of business, take it over? Are you going to go into a strip mall and put in a small surgery center? So these are the things that you need to kind of run through about what you're going to do. In our surgery center, especially the two larger ones, we do everything. We have total joints, we have the spine, we have what we call a care suite where a person can stay overnight for one or two nights, and we have our bundled payments that we get and it's done really very well. So then you need to look further than that and say, okay, what's your expansion plans for your practice? And this kind of goes to what Nick talked about is, you know, my patients don't want to drive more than two miles, right? So in rural Minnesota we have to look and see where is the population increasing? Where do we think we're going to draw our patients from? Where are they willing to go to? We have a lot of patients who are in their 80s or 90s who don't want to drive out of town to have things done. So those are things to kind of take into consideration. Also, is this going to be just a single specialty like orthopedics? Are you going to add some other specialties to it? Then you start looking at what we talked about already is capital investment. In our group, we own no real estate. We used to own some buildings, and in hindsight, you know, we could have purchased our big clinic facilities, turned around and sold those, but we had a fairly rapid period of expansion where we needed our money. Plus, remember, you're on the hook for this, okay? You have to sign a personal guarantee in order to get this money. And when you're talking about one of our buildings costs $15 million apiece, so that's a lot of money to have to guarantee on your own. What we did is we scouted around where we thought locations would be ideal. We went out and bought the land and then held on to it for a few months while we were doing some planning. Then we turned around and sold it to the developer. So we made a little bit of money on the front end to cover the cost of the buildings. So as I say, in real estate, it's location, location, location. So you have to look at where can we put this building? Where is it going to fit our needs? Is it going to support our future growth? Do we have the ability to expand the building if we want? Accessibility by surgeons. Well, we have a large area that we cover, and so we need to try and decrease our so-called windshield time. We may be in clinic in the morning, and they have to drive 10, 15 miles, which is different than being in Boston or California. But still, it takes time to get there. So you have to plan where is that going to be. And also, like I said, patient accessibility. In Nick's case, I'm not going over there. And in our case, older people say, you know, I don't drive in the big town. So then you've got to decide, okay, how big am I going to make this thing? If you make it too big, it's inefficient and too expensive. If you make it too small, you can't expand. And then you have the Goldilocks, or just right. So you have to really know your practice, be honest with yourself, and don't assume best-case scenario. Go with the facts that you have. Then what you want to do is draw up your business plan. Like I said, you want to keep this in a separate LLC if you're going to buy things. And the same sort of thing I can tell you from personal experience, the number one thing you should do whenever you enter in anything like this, like Greg said, have a buyout. Have it structured ahead of time. Do it while times are good. Don't do it when things are going south. Because like you said, I want more money. So do it initially. Have it up front so everybody agrees on it. That thing will save you more than you can think. The other thing is don't over customize your building. Just because you think it's gonna be great to have certain types of doors, enough for operating yourself, not just exterior doors. But other things come into play, so if you have to change it or if you have to sell it, some other specialty might not like the way you've customized it. The next thing to think about is future technology. In other words, we don't know what the future is gonna bring, say for robotic surgery. So you need to be able to customize, or not customize, to change as your needs grow. And like I said, in our facility, we have these things called care suites. It's actually like a hotel room. They don't have a hospital bed. They have a Murphy bed. We wanna mimic what it's gonna be like to be at home. We let them order from Panera. They bring the meals into them. We have therapists that are there. They have the nurses stay overnight. We have on-call internal medicine to cover anything that might come up. And we have, I think it's probably about eight or 10 care suites for each one of our big facilities. So then you're gonna look at, all right, do I wanna limit this to just orthopedics or hand surgery? Do you wanna have multi-specialty? Then you have to evaluate your equipment needs. So in our case, we have just a single specialty surgery center that does the hand surgery and foot and ankle and pain. And so that way, it limits our equipment needs. The big thing we're fighting right now are spine surgeons. The guys on the east side of town don't wanna go to the west side of town. The west side guys don't wanna come to east side where we have all of our spine stuff. And so if you go to duplicate your equipment needs, that's a huge capital investment. So we try and regionalize. So we have sports medicine in one spot, hand down in another. So that kind of eliminates the cost that we have. Other thing to think about is, yeah, it'd be great to have access to the highway. Well, how loud is it? How much noise is it? How much vibration is it? So if you're doing microsurgery, you don't want the building rumbling while you're looking through the scope. So then you look at case volume. Again, if you're gonna stick with just orthopedics hand surgery, that's a good thing. But if you say, I'm in an area where maybe a smaller town where I might wanna expand and have other specialties, these are the ones that are really high volume, ENT, GI, and pain management. Our pain management people, it amazes me. They will do something like 30 some procedures in four hours. Man, they're just in and out. I mean, that's with one room. That's in and out. 30 of them in four hours. So it's predicted, you know, from 2016 to 2026, the orthopedics and spine, the case are gonna be shifting more and more to ambulatory surgery. We have a unique situation in the Twin Cities where one of the major hospital groups, believe it or not, has no freestanding ambulatory surgery. And so now they're really taking it in the shorts as far as reimbursement is concerned. And you can see that more and more cases are being shifted to ambulatory surgery. More Medicare cases being done there. We have an advantage because we've got the surgeons to use one implant. We can make it profitable and it's good, okay? So what are your options? Well, okay, go build a new building. I can buy an existing facility, especially during COVID, a lot of places went out of business. There's probably some buildings that are sitting around not being utilized. Or I can build an existing site, you know? So in other words, you may go to a strip mall. If all I'm gonna put in is a hand surgery operating room, you know, if that's all you need, that's all you need. Thing to think about. Again, mortgages, mortgages are now going up. So now it's getting more and more expensive to buy. And again, it's not like a personal mortgage or a conventional mortgage for a home, but the business mortgage is going up too. The home mortgage is now almost 7%, you know? And so it's gonna get to be more and more expensive to do this, especially right now in the last year, it's gotten somewhat better. But before, remember, we had this supply chain issues. I mean, my builder told me for a garage door for my house, eh, it could take you about a year. Well, that's because they add the expense. So now you've already bought the land, you build the building, got costs going on. So right now, construction's getting a little bit better, but still, it's fairly expensive. It's estimated about $400 a square foot. And I put this together several months ago, so the cost of that's probably gone up. Leases, as Nick talked about, you can get this triple net lease, you can get a full service lease. It depends upon how big the building is, what you're doing. So maybe just for a surgery center, it's not that complicated. But if you have a multi-story building, you're talking about getting a triple net lease, that might be a little bit more expensive. So each one of these has their advantages over the other. The advantage of real estate ownership, just like Greg talked about, your building appreciates, you know, you've got some equity that you're being built up in it. The big thing is, for us, our personal capital was at risk, and we were in a very rapid period of growth, and we could not afford to put out or guarantee $30 million with 30 partners, you know? So it was something that was considerable. And then the average turn on investment is less than the stock market. Well, maybe until now. I mean, you know, I'm getting ready to retire, see? And I look at the stock market, and it's gone down 5,000 points. I looked at it yesterday, it's 29,000. I'm going, oh man, I might have to work a little while longer. But anyway, the big thing is, as Greg talks about, is it ties up your capital for a long period of time. So again, you want to keep refinancing it. So those things, those factors all come into play. Am I going to buy and build myself? Am I going to lease? Or am I going to look for something that's already there? And right now, if you look down there, a 7,000 square foot, two OR facility is about $4.5 million plus the cost of land. So two of our buildings are 60,000 square feet. You take about nine months to a year to construct. And so we have five ORs, one pain management. And it's about $15 million a piece. So it's a big expense. So basically, again, the biggest thing is, evaluate your needs. Really decide, do I want to have an ambulatory surgery center, which I think is yes. Because as a hand surgeon, it makes our life so much easier. We're so much more productive. That's all we do. We like to liken ourselves to a NASCAR pit crew. We do the same thing the same way every day, day in, day out. You know how many cases you can get done. It's got great results, low infection rate. We get to control everything, as opposed to going to the hospital. Know what your market wants. What are the needs? What do you think the future need is going to be? What's coming up on the horizon? And best of all, good luck. Thanks. Thank you. Thank you, LT, Greg, and David. So we don't have a ton of time for questions. But hopefully, that wasn't too much information. A lot of terms you don't hear, usually at a hand conference, in terms of real estate and whatnot. But we do want to open it up to questions that anybody may have about real estate investments, any investments in general. And we'll open it up to the floor. Yes. Yes. I put in that polling thing in the app, so you must not have seen them. Oh. Yeah. That's your department, boss. If you want to just review this. You can go ahead and just ask it to the mic. We're new to that system, too, so. Sure. So first question, being an owner of a unicorn hospital, do you wish you could expand if the law allowed? Do you have the need to expand if the law allowed? Well, it's interesting in that there's aspects of this that are somewhat beyond me. Because we, the HOI, Hogue Orthopedic Institute entity, has accumulated surgery centers, and in the process of doing that. It's interesting, in Southern California, we, Cedars-Sinai is the big powerhouse in LA. And we're in Orange County. And both sides are kind of accumulating surgery centers. And that's the main battle. So from a volume perspective, you have the facilities to serve the volume. You do. And you do. So we've added, obviously, new partners. People have come on board. We've added surgery centers. So a lot of these stark things do have loopholes that you can expand and whatnot. And we're partnered with the hospital. It's about 50-50. So that technically is, they will allow you to change in size or whatnot. But we haven't found that to be the case. There are loopholes to that. And then as a follow-up, because you're a hospital owner, do you find payers are forcing patients to have procedures done at an ASC for a lower-cost site of service and denying services at your hospital? Well, no, because it's all under the same umbrella. You could do a HOG outpatient. You could do it at the surgery center or whatnot. And we really haven't found that. It's really, the autonomy of the surgeons has been maintained. So if I want to do it at the surgery center, do it at the hospital, it's really been up to me. I've never encountered that. Maybe, for instance, I do total elbows. And I'd like to do them outpatient if I can. But I think sometimes it's a matter of if they're comfortable doing that or have the staffing. But that's more of an internal problem. It's not being pushed by the payers by any means. So I'm part of a physician-owned hospital as well in the Midwest. And we intentionally, no one would develop an ASC unless they had orthopedic subscription. So we would not allow an ASC to be developed in our market. Because we are seeing in our market, payers, particularly Blue Cross, forcing patients to have surgery at a surgery center. In fact, we always get denials saying they have to have it done at the PICA Surgery Center, which is an ophthalmology surgery center. And we have to call and tell them they don't have services, they don't have resources to do orthopedic care. So for us to maintain our population and steer them into our hospital, we have to actively dissuade ASC development in our market. I was just curious if you're having the same issues in your market. Well, is your hospital under the same umbrella as the surgery centers that are freestanding independent from that hospital? We don't have surgery centers in our market. We don't own any surgery centers. We've invested and grown our hospital over time to accommodate the increase in volume. But one of the things we are seeing nationwide, we thought, is that payers are wisening up to steer patients to a surgery center side of service over a hospital. As we know, hospitals charge more for the same procedure. Yeah, that's what we have in the Midwest, is that now we're talking about the hospital didn't have any freestanding surgery centers, and now the insurance companies are saying they want to done a surgery center. So if I was in your situation, if I was a young guy, I'd come in and open my own surgery center. Well, then we'd be competing with our own hospital. Yeah, well, I'm talking about if I was a new guy coming to town, what I'm saying is if I was a guy looking for something like that. If you were a guy coming into our town. If I was coming into your town, I'd just open my own surgery center. Yeah, you're right. But I think, to your point, I mean, yeah, I mean, we're all squeezed by insurance carriers denying this, denying that, and wanting this, or wanting that. Some people may not know, obviously, if you're done in a hospital setting, the reimbursement is going to be higher than it is at a surgery center. And so for that reason, yeah, certain payers are going to push you towards that. I mean, so yeah, I mean, if I try to do a carpal tunnel at the hospital for a higher reimbursement, I think that I'm going to hear from the insurance carrier. I think in our system, it just works out that the cases that you would do at an outpatient surgery center, carpal tunnels, trigger fingers, knee arthroscopy, whatnot, are generally done there. So because of that, we haven't encountered that, because the traditional outpatient procedures are done there. And then your spinal fusions, your total knee replacements, and whatnot are done inpatient at the hospital. Yeah, so you're stratifying your procedures to the appropriate facility. In our case, we're doing everything we can in the hospital, because there is no ASC in our market. Separate question, and my last question, is the way we looked at it, kind of like the Minnesota scenario, you're trying to reduce your risk from personal guarantee when your practice is going through a large growth phase. And the way we kind of simplified it is, as an owner of real estate, we get x dollars a square foot, fair market value, x dollars a square foot. The services in that space generate a number per square foot, whatever that number might be, depending on what's in that space, if it's an ASC, or a physical therapy department, or an office. And so what we've simplified is, we can take risk off the table by doing a sale leaseback, use that money to build a facility for services. And if the services generate more revenue per square foot, it's worthwhile to take risk off the table to generate the revenue per square foot from the operational side of things. Is that overly simplifying it? Is it naive to not try to take on that risk? That's my last question. Well, again, my partners will tell you, I'm just a poor country boy. I just show up and work. That's what we might count in the military above my pay grade. However, in hindsight, looking at our situation, what we should have done, in my opinion, is we should have built the building ourselves, get the guaranteed long-term lease, and then within three to five years, turn around and sold it, and got the money back, and then give it back to the partners. But for some reason, our higher powers didn't. Again, like I said, we're going through this rapid expansion phase where we couldn't hire for money just to run projects. We're developing two or three projects at a time. We just didn't feel like we had enough capital to cover all that. Yeah, so I guess to clarify, what we're considering right now is doing a sale leaseback of assets we own, real estate assets we own, taking that cash to build a new facility, whether it's an office building or a surgery center or whatever it might be, or a therapy department, and then selling that building once a lease has been established, and just forwarding all that cash into expanding services. Because we're in that growth phase where we want to have dollars per square foot from the operational side, not so much dollars per square foot from a real estate owner. So that's basically what I said. That's what I would do. If you had the time and money, depending upon your marketing plan, where you need to be. Because we're in a very hyper-competitive area in Minnesota where we're at. So we needed to expand fairly rapidly, and so we couldn't hire for money like that. But if you're only doing one project, I think that's a great idea. Well, I think that my understanding is there's no surgery centers in your area. And I think, I mean, and again, I'm not an economics MBA or anything like that. But just looking at globally, surgery centers tend to be profitable. It's rare if you don't have the volume for it to not be profitable. And if you don't have any surgery centers in your area, that seems to me like a no-brainer to expand. And that seems like a good business model, because you really don't have any competition where you are. Yeah, yeah, for us, we would not do a surgery center just because it would take volume away from our hospital. So as long as we can ride this train, we've decided to ride the train. I think that train's going to end, though. Yeah, eventually they're going to give the same reimbursement. Site of service won't matter. At that point, we would expand into other areas with an ASC. But until then, we're riding the train. Don't wait too long. Yeah, yeah, thanks. It's like timing the market. Yeah. Any other questions? I know Dr. Byrd left, but he was mentioning these A shares and B shares. And I don't know if you two have that type of distinction in practice equity that he was discussing. And I didn't quite understand the concept. Do you understand the difference between A and B shares? Well, I think that generally is that you just want to separate the real estate from the partnership, is my understanding of that. And I think that that alludes back to my portion of the talk, where you want a separate LLC and separate shares for that. So I know at our surgery center, we have a system whereby once you leave the surgery center, you get two years of what you collected for the last two years of your partnership. And that's essentially your buyout. And then the shares go back into the group. And new surgeons can invest. And the new surgeons can buy that. And one of the problems we've had is, and you could say it's a problem, is that this started as a two-person surgery center, grew to a four-person surgery center. And now it's a hospital and multiple surgery center. So our initial investment has just skyrocketed. And the problem is that the new surgeons, per share, it's quite expensive for a new guy coming out. And we've had to figure out ways to make it more affordable for them and maybe differentiate that for them. So if you just have all the old guys who are getting older, have all the shares, and you don't have the new guys coming in, participating, your entity is going to die. So I think that that's why you can separate out the shares, is my understanding, between those traditional shares and maybe different shares for the newer guys. And the same with the office building? Like, if you're in your group, you don't have to be an owner of the office space? Well, that's where else you want to separate. And that's really a big thing. Because you want that to be a separate thing and have that be a shares-type situation like that. Because the last thing you want, again, if you're two years from retiring, you're like, oh, hey, I built this building. I want my return in five years or whatnot. But you want something where it's an attractive investment for the new people. But the older retiring person is going to get their due. But it's not going to be uneven in terms of that. So you really want to do a separate deal for that with separate shares, completely different from your partnership agreement. See, in our group, when we did own real estate, once you became a partner, everything was under one umbrella. There was no separate LLC. And you shared equally. Same way with our surgery center. We have no separate entity for ownership of surgery centers or what they produce. Everything, everyone's a partner. So we share equally. And again, the problem with that model is that we found that some people would tend to slack off in clinic because they made so much more money than ancillaries. But like Nick was saying, if you do have real estate, you want that to be a separate entity. And one thing that Dr. Byrd talked about is in the case you get sued, you want that to be a separate entity. So it kind of saves you. So you don't lose your building, your real estate holdings, because of that. And I think what Dr. Byrd alluded to is that there was a vesting schedule for the class B shares. In other words, I don't know that you didn't get the same amount of shares right away. But you gradually, over a period of 10 years, would get whatever the maximum number of shares were. That way, it forces people to want to stay. And I think that was part of what he was getting at. Thank you. And that's one other point. We have a cap in our group. There's a maximum percentage of shares you can have. Because there's some people who would just buy all those retiree's person's shares. And we've capped that per person. There's a maximum percentage you can have in that total ownership. I had a question, kind of piggybacking on what you guys were just alluding to. As a new person, analyzing the shares available, do you have any tips for that to know if it would be worth it for you early on, or how to navigate that scene? And I have a lot of friends who are the newer people come to me with that advice. And it does seem like a steep price. But it just pays off for everybody. And I would encourage you to take out a loan and buy that and invest in that. Because I think that everybody who has done that has profited. So you may not see your return for three to five years. But if you're going to be in practice for 20, 25 years, I mean, nothing's a guarantee, of course. But I can't imagine that health care market's going to go downhill. You're going to get your money back. So it's hard when you have a new family, you're buying a house, you're paying off your medical school debt. And we've talked about this in our surgeries at our hospital. But I would encourage you to buy those shares. Buy as many as you can. We have a young partner in our office. And I've made him, over the last five years, buy as much as he can. And he's already turning profit on it. And thanks to you for forcing him, well, really encouraging him to do that. And there's mechanisms of doing that. Like, our buy-in was like $1.6 million. And so we devised a way we could use pre-tax, post-tax dollars to help minimize that. And yes, you need to buy as much as you can when you can. It's just like, put it away. Out of sight, out of mind. Because 10 years from now, you'll thank Nick, you need to buy him a steak dinner, saying that was the best advice you ever gave me. I'll tell you, I've been in practice 25 years. So I've bought stocks. I've done investments where you think of this product's going to come about or some new service. And I've done real estate. And I can tell you top to bottom that I've just, and I think most people say this, it's hard to lose in real estate or property of this nature. And I would just, again, I'm not an invested CEO or anything like that telling you. But my experience has been that I just, now if I see something that's real estate related or something of this nature, it's the highest yield and the highest guarantee to do well for you. Especially in inflation. Now, not necessarily medical stuff. But in inflation, in real estate, it's a good investment. I mean, people have to have a place to live. You look at mortgage rates are 7%. You had to put 20%, 25% down. Think of the average price of $300,000 house, you know, $60,000, $70,000. Most people don't have $70,000 laying around. So they're going to rent. So if you're looking at just personal real estate, like David talked about, it's a great investment. Except, and I'll give you this caveat. Yesterday, my mother and I own a 14 unit place in LA. And it's great, it's passive income. But, you know, yesterday morning here at the meeting, I spent, we have a tenant who hasn't paid rent in two years with the COVID restrictions. And we think they're dealing drugs out of that unit. And we have to set up ring units. So there's headaches with it, too. So in terms of, your question was more towards real estate. It was in your practice and stocks. You're not going to have those problems. Just be aware that if you are a landlord, there are headaches. There are headaches that come with it that are constant. And you have to look at the bottom line and say, you know, is this really worth it? And that's what I would caution you about. Any other questions? Well, thanks for coming. Enjoy the rest of the meeting. Weather's supposed to be good.

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