Litigation is a tricky and complex subject but it’s vital that you know the rules and laws surrounding your deals. This week super attorney Dugan Kelley drops by to tell us how. 👉👉 Join the MultiFamilyMBA and get exclusive free training: https://theinvestormindset.com/mfmba When you're a real estate syndicator and investor there's lots of potential potholes and problems you could face and that's why I’ve invited this week's guest on the show - Dugan Kelley. Dugan is a super experienced syndication attorney, transaction lawyer and has millions of dollars experience on the litigation side. He drops by this week to give us some amazing advice on how we can identify these risks and either avoid or overcome them. Dugan Kelley received his Juris Doctor from Regent University in Virginia Beach, Virginia. He has extensive experience representing clients in trade secret, catastrophic injury, class action, product liability, intellectual property, defamation, and other complex litigation matters. Dugan's practice also includes representing companies and family businesses in providing advice and counsel in the capacity as outside general counsel. Hit subscribe to join the community and let us know: how did you find the perfect attorney?
Litigation is a tricky and complex subject but it’s vital that you know the rules and laws surrounding your deals. This week super attorney Dugan Kelley drops by to tell us how. 👉👉 Join the MultiFamilyMBA and get exclusive free training: https://theinvestormindset.com/mfmba
When you're a real estate syndicator and investor there's lots of potential potholes and problems you could face and that's why I’ve invited this week's guest on the show - Dugan Kelley. Dugan is a super experienced syndication attorney, transaction lawyer and has millions of dollars experience on the litigation side. He drops by this week to give us some amazing advice on how we can identify these risks and either avoid or overcome them.
Dugan Kelley received his Juris Doctor from Regent University in Virginia Beach, Virginia. He has extensive experience representing clients in trade secret, catastrophic injury, class action, product liability, intellectual property, defamation, and other complex litigation matters. Dugan's practice also includes representing companies and family businesses in providing advice and counsel in the capacity as outside general counsel.
Hit subscribe to join the community and let us know: how did you find the perfect attorney?
KEY TAKEAWAYS
1. Plan, prepare and have a positive outlook on your deal.
2. One of the biggest pitfalls is not knowing or believing that it takes a team to be successful.
3. It is important to have an attorney that you have a great relationship with because most of the time it will be a long term one. Lineup your team before you start the deal.
4. Ask what type of person you are and what kind of communication you want from your attorney.
5. Trust your gut and go with an attorney that you feel is the right fit. Remember, you're there to CLOSE and help your passive investors.
6. Never do a deal with a handshake, it ALWAYS has to be in writing.
7. The rules and laws are not different for your family and friends. Make sure you treat them as a client.
8. If you don't have the private placement memorandum then you're at risk of being sued by either the government or clients.
9. Do the right thing all the time and avoid burning bridges... because the investing circle is small and it could come back to haunt you in future deals.
10. As a sponsor or operator it's very wise, and worth the money, to get insurance. This is something that lots of people don't do but it will help and protect you massively should anyone want to come after you in or after a deal.
11. Even though we're in uncertain times... it's certain that real estate is still the best way to invest. It's a good time right now to hold property and wait for the improvements to come.
BOOKS
The Passive Investing Playbook - https://theinvestormindset.com/passive
LINKS
Join the MultiFamilyMBA and get exclusive free training: https://theinvestormindset.com/mfmba
Learn more about investing with Steven at https://theinvestormindset.com/invest
Linkedin: https://www.linkedin.com/in/dugan-kelley-0019b435/
Instagram: https://www.instagram.com/dugakel/?hl=en
FB: https://www.facebook.com/dugan.kelley
Steven: [00:00] When it comes to being a real estate, syndicator, and investor, there are a lot of legal potholes and challenges that you can end up running into as you're growing and scaling in your career. And it's absolutely critical that you know about some of these so you can put the right frameworks in place. And today, I'm really grateful we've got Dugan Kelley, a phenomenal, experienced attorney who's both a syndication attorney, real estate transaction lawyer, and also has hundreds of millions of dollars of experience on the litigation side so he can really talk through today with us some of the risks that people end up facing and how to overcome some of those risks. So let's get into it.
INTRO: This is the Investor Mindset Podcast and I'm Steven Pesavento. For as long as I can remember, I've been obsessed with understanding how we can think better, how we can be better, and how we can do better. And each episode we explore lessons on motivation and mindset from the most successful real estate investors and entrepreneurs in the nation.
Steven [00:01:02] All right, guys, welcome back to The Investor Mindset Podcast. I'm Steven Pesavento, your host and today I'm excited I got Dugan Kelley in the studio. How are you doing today Dugan?
Dugan: [01:10] Hey Steven. Thanks brother. I'm doing really well. Hey, everybody. Glad to be with you.
Steven: [01:15] Yeah. well I'm glad that you're here with us today because as you guys know, Dugan is the founder of Kelley Clark, a law firm where he focuses on securities and real estate law and multifamily commercial and residential acquisitions or sales. And he's assisted clients in structuring real estate transactions in excess of over $2 billion. But his legal background extends much further with over 20 years in legal including on the trial law side and in commercial litigation. And they operate and work with clients all over the southeast and even though they have offices in Texas, and in California. So they've got a lot of experience and we're definitely going to talk today about some of the legal risks for syndicators, some of the things people need to be protecting themselves about and from and exactly how you can go about doing that. So you're ready to dive into things Dugan?
Dugan: [02:06] Let's dive in. Let's go.
Steven: [02:10] All right. I like it. So what's been the single factor, the one thing that's opened up the most opportunities or led you to the greatest success in business?
Dugan: [02:20] I would say having a supportive family and team wife and just an infrastructure. So those of you that are your own business owners, entrepreneurs, or students that are just looking to get into the business, understand that if your home life is not squared away, and you don't have a supportive structure, it can wreak havoc in all areas of your life. So I'm deeply grateful, humbled and blessed to have a loving wife of 20 plus years, children and parents that still love each other, they still love me. And so I know that everybody doesn't have that opportunity. So I am blessed in that respect and I think that's one of the key ingredients to my success.
Steven: [03:09] Yeah. Well having that foundation at home, and that foundation internally with yourself ends up making you so much stronger to go out and take risks and be able to come back from the failures that are going to happen.
Dugan: [03:21] Absolutely. Because life is full of ups and downs, but being able to have a very positive mindset as opposed to a negative mindset. I'm a huge believer that positivity is essential for success. If you're not positive and your negative, or you're a glass half empty type of person. That's not a winning formula for entrepreneurs, or business people or certainly in the commercial real estate context, you need to have a positive mental outlook, it doesn't mean blindness, don't be blind or unprepared. But you need to be positive, think on good things and plan, prepare, but ultimately having a positive mental outlook on life in general, is a very big thing certainly is for me.
Steven: [04:14] I couldn't agree more and that's why I think it's so important for us to cover today's topic because when we're going and we got that growth mindset, we got that positive outlook, we're kind of pumping along sometimes, maybe some people would believe that, "okay, we can't look at all the negative potential potholes that are in the way but we need to be clear what's out there so that we can avoid stepping in them or getting tripped up along the way. And we can do that by learning from other people's experience. So starting out with the real basics, most people are going to know why this is important. But what goes into some of the reasons that it's so critical to have really good quality legal counsel on your team when you're going out and you're doing syndication and you're building a business?
Dugan: [05:00] I can just tell you from representing the most massive syndication deals in the country to people that are just getting started and they want to just syndicate one single condo. So the smallest syndication, I think I did last year was $58,000 for one condo, and the largest was like $50/60 million. So the ingredients that make that up are all the same. And the reality is that if you prepare, plan, prepare, have a positive mental outlook on these things you're going to be ultimately, you'll have success, but one of the biggest pitfalls obviously, is just not understanding that it takes a team. So the reality is even the $59,000, condo, syndicator, and the $60 million, big behemoth, gorilla syndicator, they all have to have team members in order for them to get to the finish line. So if you're thinking to yourself, "hey, I want to get started, I don't need to pay for legal, I don't need to pay for asset management, I don't need to have somebody that can underwrite, I can do all of that stuff in house, or just me and make this thing home because I don't want to share equity or bring on other team members, I would tell you, that's a mistake. That's a big mistake because these are complex transactions, even the smallest ones, there are hundreds, if not thousands of emails that will be going back and forth, and documents back and forth from the seller, their counsel, the lender, their counsel, title, survey, third parties, you name it, your PM, leases, all of these things are wrapped up into this one entire transaction. And it's in a very compressed timeframes Steven as you know, it's usually 60 days, sometimes even sooner. And so you've got to be able to say, I've got my team in place. So if you don't have your team, get your team, because I would think that's the number one thing that I think that I see,
Steven: [07:17] Yeah. Because you don't want to be going out and finding a new CPA or a new attorney when you've got a problem right in front of you. Because you don't have the opportunity to really do the proper vetting, to really get to know them understand their situation, because you're looking for a solution right there in that moment. That's why it's so important ahead of time to be going out and finding that person or that team that's going to help support you. And so before we dive into some of the the legal risks, what does somebody need to look for in an attorney and and how do you really know that you're going out and getting somebody who's going to be a great fit because there are attorneys on all sides of legal process, from the seller side of the buyer side to the investors, the lender, everybody has an attorney representing them. But how do you know that you're getting someone who's going to do a great job if you're fairly new to working with attorneys?
Dugan: [08:08] Yeah. So the reality is you can't avoid attorneys and commercial real estate, they're everywhere. So the bank has them, the seller has them. The passive investors often have their own attorneys and so when you're looking to have an attorney on your team, it's important to have a good fit. So these are like what you're saying, this isn't really speed marrying, most of these relationships are long term relationships. Most of the clients I've had, I've had for years, if not decades. And so the reality is, once you found a good team member, that's a good synergy, so a lot of it has to do with communication. How do you communicate with your attorney? Are they willing to text with you? Now we're in the modern age, when I first started, email was just in its dawn. So we were still doing dictation. We were sending out physical letters to people. So in the last 20 plus years, the light years of technology has helped communication, but you still have a lot of old school attorneys that like to communicate on set periods of time throughout the week and be very scheduled or regimented. So the question is, what type of person are you? Are you a person that expects your attorney to return your phone call after hours or text with you? Are you expecting to be friends with your attorney? Are you expecting your attorney to have a baseline of litigation or transactional bankruptcy or worker's comp, whatever, that kind of mix of ingredients that you're looking for. It's such an individualistic relationship that you need to really have to think about that before. As Steven says, you get into the deal and now you're like, "oh my god. I'm in a ditch. Now I got to hire somebody, and maybe I don't even like this person." The reality is you're going to be forced to make those decisions in a bad situation. So you want to be able to line your team members up before you get into that situation. So I think [00:10:23 Unintelligible] and I tell clients all the time, trust your gut. So if it's not it, I understand I'm not the attorney for everybody and the next person might not be the attorney for the next person. So the reality is, if it's a good fit, you'll know it, trust your gut, if it isn't, find yourself another professional. Because ultimately, you need to have confidence in the professionals that you have retained to help you get to your goal. And your goal is closing, your goal is not to have the most beautiful offering. Your goal is not to have the prettiest documents, your goal is to close and to help your passive investors. That's your goal.
Steven: [11:03] Yeah. Again, it can be easy to forget about that, and sometimes you get overwhelmed and think, "hey, I need this person who has a certain background and track record." And all those things are important. But that relationship, their ability to communicate effectively, especially when it comes to real estate, transactional attorney work is so critical, because when a deal is going back and forth, there's messages flying at all hours of the night, and for somebody to be able to respond and communicate that can sometimes be important to some people and other people work in very tight boxes. And maybe that's a better fit. But what I'm really curious about is having effective legal protection is something that I think is super vital. And as I've developed more and more as a business person and become more experienced, I've realized that what I thought was sufficient was fine when I was getting started. But as I've grown, I've realized that there's even more of those potholes that we've talked about, more ways that people can have excessive liability and that it's even more important to be proactive to working with an attorney who understands this. So as somebody who has litigated or settled over 100 million dollars of business related settlements, what are some of those biggest liability risks? What are some of those biggest risks for syndicators or real estate investors?
Dugan: [12:21] Yeah. So I still see from time to time, people doing handshake deals. So when we're in the context of dealing with real property, everything has to be in writing. So the law, not just in your state, but in all states, says that real estate transactions are so special, that the material terms have to be put in writing. And that means if you're going to do a joint venture with some partners, or you're going to have co sponsors on that deal and your deal is what the obligations and the roles and responsibilities are for various owners of that piece of real property or the general partnership, that needs to be in writing. If it's not in writing, and you're just doing some sort of loosey goosey handshake deal. That's not good. Ultimately, if the deal works out and everybody's happy, no problem. The reality is in litigation, we're often going around with our mop bucket, and we're cleaning up. So we're not dealing with happiness in litigation, we're dealing with severe unhappiness. And even if you're forced to litigate and win, you still won't be happy, because you're in the middle of a lawsuit. So even the people that win ultimately lose many times in litigation, so litigation is not where you want to be. And so the biggest thing I would say is make sure that your deal as you envision it in your head is actually down on paper in writing and to the extent that it's not, it needs to be.
Steven: [14:07] Yeah. So getting something in writing absolutely critical because if it's not in writing, then what are you going to reference back to your current reference back to that conversation you had with somebody needs to be clear in a document that it's hard to argue that the facts are different than what is being read in that document. So what else? What else have you seen?
Dugan: [14:31] Yeah. So I've seen that some newer operators think to themselves, "hey, there's an exception to the sale of securities because I'm doing it with my brother, or my mom, or my dad or my family member. So I can raise private equity. I can sell securities without having to go through this private placement memorandum procedure. Why? Because I want to save some bucks. I want to save some money. Theoretically, there's no family exception to the securities laws around the country. So it doesn't matter if you're selling a penny, or you're selling $50 million worth of securities, even if they're your own securities it's still the sale of the security. So I see a lot of people that think to themselves, there's got to be a family exception to some of these rules or regulations. And if you think about it, most people when they first get started, who are you raising private equity from? Well, you're raising private equity primarily from family members, loved ones, friends, longtime friends, people that know you, like you trust you. Those are the secret ingredients why passive investors want to invest in your particular deal. But even in those contexts, that's still the sale of the security. And so if you're not protecting yourself with disclosures that are required to the particular state in which you're in, if you're not doing business through a subscription agreement, if you don't have a written operating agreement for the entity that is essentially selling those securities, that can be a significant issue and a problem.
Steven: [16:13] So for the listeners that don't know why or what is the reason that it's so important to have these documents when you're selling a security --?
Dugan: [16:23] Yes. In the private placement memorandum procedure, it really has potentially six components, the six key ingredients, in every ppm. The PPM is just a fancy legal word as a private placement memorandum for a bunch of smaller legal documents. But if you don't have those one on the sponsor, syndicator side of it, you're exposed, meaning you have risk of being sued, and the person suing you potentially could successfully sue you for money. Sue you for rescission, meaning let's tear the deal up, give me my money back, even if the property is not necessarily performing to what you told them the projections were, you also have risk of the government. The SEC, or even the state securities boards in which you're essentially selling the securities, they have remedies from everything from discouragement, meaning any money that you made off the deal, they're going to claw that back from you, tear the deal up, prohibit you from your ability to even do future deals for some period of time, and fine you. All of these things are not where you want to be. These are things that will create havoc on your emotional, spiritual, physical well-being for potentially months or years, some of these investigations can last for years. So you want to try to do things the right way, all the time, up front, to protect yourself as the sponsor and the syndicator. And if I'm the passive investor, looking at investing into the deal, I want things to be done the right way as well, even if the handshake deal theoretically is better for me. So if somebody says, "Hey, I'll give you 12%, preferred return and they only get 8%. And they say, Well, where's my where's my other 4%? And they say, I don't know what you're talking about." You want things in writing, you want things to be structured so that you can hold the sponsors accountable to what they say in the documents. And so I would say, not understanding the structure, not having a paper correctly are some of the biggest issues that both from a sponsor syndicator side as well as a passive investor side that you want to make sure is done correctly.
Steven: [18:55] I think it's so important for people to realize that all of the stuff that an attorney is doing is not just to bill your money, it's not so that they can make a buck or two sure, some of the time, some of those documents are there, because they're looking to, bill a little bit more, but at the end of the day, it's so that you can put a framework or a structure in place that's going to protect you from future potential risks that are out there. And by putting this PPM together, by putting the operating agreement, what you're doing is you're just setting a set of expectations with other people on what's expected. And what's going to come out of that and you want to be able to refer back to something and so it seems so basic to say get something in writing and have this explicitly outlined. But oftentimes I'm noticing my clients or my friends, some people that I've seen starting out in the game that they're not. They don't put things in writing at the level that I think they should be, and it's burned them because they haven't had a lot to be able to refer back to, but when it actually comes to litigation, what have you found? What I've always heard, Dugan, is that when it comes to litigation, it's almost never worth it. At what point does it make sense to seek litigation and therefore, at what point does it make sense for somebody to actually come after you as the syndicator, so you can kind of keep that in mind where the risk to reward comes from somebody who's going to go after and do litigation?
Dugan: [20:25] So people that you get into litigations have any number of motivations. So there are people that have been grievously injured, that have a legitimate beef, and they should sue them and they should have somebody there to zealously advocate their position to either get their money back or hold other people accountable for deals that went awry. When somebody steals from you, then they do things that they don't honor their word, they are people of not high integrity. Litigation is a mechanism; we have the greatest legal system in the world. So this is the epitome of what the world wants to strive for. We're not out there in the streets anymore shooting people at [00:21:13 Unintelligible]. We're actually using the civil justice system, and in some cases, the criminal justice system to hold people accountable when we're talking about commercial real estate deals. But depending on your motivation, I've seen litigation be able to hold up the release of earnest money in the event of a deal gone bad. That's from buyer and seller having to litigate. I've seen litigation force banks, hard money lenders, funds, other people that had promised to deliver either loan proceeds or whatever to their borrowers and they engaged in predatory lending, or what we call equity stripping of the deal. Litigation is a key essential tool in your tool belt, sellers who regret the purchase price that they entered into the deal with you as the buyer, and they now have another buyer sitting in the wings that they want to sell it to, litigation specific performance, you may have even heard that word before. So buyers have to have that mechanism to righteously hold sellers accountable and force them to sell the property at the price that they initially agreed to for buyers. So I'm not one that says litigation can never be used. In fact, litigation is often a very useful tool in certain circumstances. But you're right, Steven, the vast majority of people that engage in litigation, even the ones that win. So I've been in trials before, where you get a massive verdict millions of dollars. That doesn't mean that money automatically transfers from the defendant’s bank account into the plaintiff's bank account. No. That's just the first step, you got a piece of paper that says you won, you won this amount of money, now you got to go get it, you got to go try to collect it. And then you engage in another set of litigation to try to collect that money. So when we're talking in the commercial real estate space, I think it's essential for buyers to understand that they will be sellers, sellers to understand you will be buyers. This is a very small industry, even though it's a global, and even to this country, it's a 75 plus billion dollar a year industry, the reality is you're going to bump into the same investors, you're going to bump into the same sponsors, you're going to bump into the same commercial real estate brokers, the same bankers, the same sellers, the same title company, survey company. So if you burn somebody, if you burn those relationships, at any one of those points, it's going to come back to haunt you in future deals. And so I'm a big believer in doing the right thing all the time so that you don't have to find yourself in the situation where you have to figure out "how do I use litigation as a tool, or as a shield? It's either a sword or it's a shield to protect yourself in the deal.
Steven: [24:23] Yeah. And it's a good thing to remember that it's a tool and I think sometimes people can be overwhelmed thinking about using it as a tool. I know back in the single-family days, I'd have sellers who would make agreements and they'd get other offers from other investors who were essentially trying to be predatory and taking that deal from us that we'd already made an agreement, we're ready to close. And we had to use specific performance to be able to go out and encourage that seller to take action. But one of the things that was so difficult about it was that sometimes the juice wasn't worth the squeeze, going through the entire process and sometimes you get to the other side. And even though you'd have a very strong case you may not end up winning, and that costs you a lot of money. And so that's where it can be hard to decide. And you want to not be emotional and go after people just because they're doing the wrong thing, or using that as a shield to protect yourself. But we have actually experienced this just recently in a 220 unit building that we raised capital on and we are ready to close. And now the seller is asking for 800,000 more dollars. And because they believe that they have the right and the person happens to have a history of being in a lot of litigation, and they're a high net worth person with a lot of money. And this is what they do. And it almost feels kind of like you're the little guy, you don't quite have that legal backing to go after this person or maybe the fear that it's going to take years and hundreds of thousands of dollars to do it. But I guess it's beautiful to know that if you were to go down that path, most likely you'd have a good strong case. So as a syndicator, we're putting everything into writing, we're going out and we're figuring out how we can reduce the liability that is going to be out there. We're understanding how we can use this to our advantage. What are some of the other issues that you've seen syndicators who maybe aren't even experienced, but they're scaling quickly run into on the legal side, that they could prevent themselves from dealing with some of those issues, if they were just to work with an attorney and change up some of the structure when it comes to scaling into those bigger deals?
Dugan: [26:37] I think insurance, having a good [00:26:38 Unintelligible] insurance or directors and officers, insurance from the operators, they don't think about it for themselves. So most operating agreements with your passive investors or for any particular syndication allow you the ability to purchase insurance that would insure claims potentially brought against you by an investor, by a third party by a property manager, by a tenant. If you don't have that insurance put in place. We're not talking about property insurance. We're not talking about property and casualty insurance that the lender is going to require you to have, the lender is not going to force you to have errors and omissions insurance or directors and officers insurance that would protect essentially claims, frivolous claims, or even legitimate claims against you as the sponsor operator and so many operators as they're scaling quickly, because there's a lot of deal flow right now. Capital markets are starting to loosen up, lending from the agency level assumptions are going wild. It's crazy. It's awesome. But as a new operator, you need to really think about "Yes. Is it going to be potentially expensive? Yeah. I think it's something that you absolutely should quote and get some insurance that would protect you or your business as the sponsor operator. So I see a lot of people don't do that. They don't even think about it. So that's one key thing that I think people should start looking at, insurance.
Steven: [28:16] Well, people don't really think about it until they meet somebody who went through a situation like you've litigated on both sides, protecting people and going after other folks that have maybe done something wrong, they don't think about the risks that's there. And they don't think about the importance of spending $10/40,000 a year on insurance to protect themselves from the potential repercussions that could come down the line from somebody making a legitimate or a legitimate claim because somebody doesn't have to have a legitimate claim to come after you anymore. And that could still cost you quite a bit of money to defend yourself. So I think that's really strong advice.
Dugan: [28:56] Yeah. Listen you could win, but what does that look like you spent $100,000 to win and then you try to ask the other side that you won against to pay your attorney’s fees and they don't have any money. What are you going to do? There's not an individual or Grand Wizard out there that says, "hey, this guy sued you it was a BS lawsuit or frivolous lawsuit, now I'm going to help you pay for your attorney’s fees. It doesn't work that way. And so the reality is, you need to have that type of safety harness, the seat belt, so to speak, to help you to protect you in that unlikely event that you do pick up an illegitimate or even a legitimate, let's say you make an honest mistake, because mistakes happen. Being able to tender that to your insurance company, you need to deliver and provide notice to your insurance company and have your insurance company appoint counsel for you and pay the fees associated with having to defend that lawsuit is a key thing that most operators should really take a hard look at.
Steven: [30:03] So as we're getting close to wrapping up here, what I'm curious about Dugan, is we're heading into a change in the economy and we've dealt with this in the past where maybe there is a really deep recession, like we had back in 2008. And who knows what's going to happen coming forward, but what type of things should sponsors be looking out for in the risk that's out there, when we start to see a big change, when there's potential for losses in their portfolio protecting both from outside people who are not participating in that investment as well as the investors themselves?
Dugan: [30:38] Yeah. I think that I'm still very bullish on the commercial real estate market. I think if there's going to be price compaction or softening, it's going to be in the single-family residential side. But let's say I'm wrong. Let's say that there is a softening, I think operators need to look at longer hold periods, and to help recalibrate some of the investors’ expectations on what those returns theoretically look like for the foreseeable future. We know just by tracking the market and the cycles in the US real estate market, that even in times of downturns, there will be another uptick. And so if you have agency debt, or you're getting out of the bridge product, so instead of going for the 18 months to 24 month business plan and building your underwriting your projections on that, instead stretch that out, what does it look like for your business model to have a five year, six year, seven year hold on that? And honestly, do it for that period of time. Like we're going to pump a bunch of capex into this or supercharging this thing, and we're flipping it in 12 to 18 months. We're not talking about that as operators. Now we're talking about what does it legitimately look like for you to asset manage and manage this portfolio or this particular asset for five to seven years, and to see back to the uptick, and to survive that? So if we didn't, thankfully, most of my clients did not see large amounts of economic vacancy rise, or tenants just saying, I'm out of here, I'm not paying my rent. So that's why I'm still bullish because even if the people are saying, I'm not investing in office, or retail, or restaurant or hospitality, people don't have to work somewhere, but they all have to live somewhere. So the reality is, if you're in the B, and C, maybe A minus stuff, you're going to be in my opinion, you're still going to be fine, even if there was a softening in the commercial real estate market in the United States. So what we want to see is we want to see operators that build their pro forma out, that do their underwriting, comes from a conservative perspective, that accounts for those things, so that you plan and prepare for the worst, hope and believe for the best. And if your business plan is structured that way, you will be successful because in the long term, history has shown us that there is nothing like the commercial real estate sector for delivering long standing returns, even it outpaces. In my opinion, the stock market, every other sector of the US economy as far as passive investors, real estate, they're not building any more of it. It's a finite resource, it's out there. So the reality is, if you have a good solid business plan, you will be successful.
Steven: [33:54] Well, this has been really powerful, and thanks for giving us some things to think about, some ways of thinking to protect ourselves from the potential liability. I know we talked about some unique topics today. And of course, I encourage you guys definitely if you liked what Dugan was talking about today, definitely reach out to him because he's a phenomenal syndication attorney, as well as phenomenal real estate transaction attorney. And I've always enjoyed listening to you teach and train and I can tell that you really know at a deep depth of knowledge, this information so where can people get in touch or potentially reach out if they're interested in working with you or learning more?
Dugan: [34:34] Okay. Thanks, Steven. It's been a pleasure and honor to be with you today brother, thank you for having me on. Yeah, if anybody wants to reach out, we're always happy to chat with people, give you a consultation, talk to you about your deal, whether we might be a good fit for you. If we're not a good fit for you. We'll move on to one of our other friends or colleagues that might be a better fit for you. I have a great, unique name that my parents gave to me. I can't take credit for it. So you can Google [00:34:57 Unintelligible] I'm out there. It's my first name. Dugan, you can find me. My email address is Dugan@Kelleyclarke.com send me an email and hit me up on social media, we're happy to connect.
Steven: [35:19] Perfect. Will include that information in the show notes. So if you're interested in taking some action, you can do that right then. Thank you so much Dugan, I look forward to the next time we are going to dive in some more syndication topics on a future episode.
Dugan: [35:30] Thanks Steven.
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