How to Unlock Your Home’s Hidden Passive Income Stream (ADUs 101)

There’s a hiddenThere may be a hidden passive income stream in your basement right now, or in your garage or your backyard. Today we’re breaking down one of the most powerful ways to add cashflow to your investment properties or even your primary home. What’s up everyone? I’m Dave Meyer and this is the BiggerPockets Podcast where we teach you how to achieve financial freedom through real estate investing. Today we’re talking about accessory dwelling units or ADUs. And if you’re not familiar with this term, it just means a second living space on one property that could be closing off a basement or an attic to make it into an apartment. It can be putting a tiny home in your backyard or converting your garage into a separate unit. And this strategy has the potential to massively improve the earning potential for any property. Just think about it, creating an A DU can be as simple as putting up a couple of walls, and it can add an entire new rent check into your pocket every month.
Joining us on the show today is Derek Cheryl. You may know him as the A DU guy. He’s an investor who built his first A DU when he was still in high school nearly two decades ago, and it’s been leadingly charge on this affordable and profitable real estate venture ever since. Derek is going to explain to us how to find properties that are undervalued because of their hidden A DU potential share, which a DU options can generate the most revenue for the lowest cost and much more. All right, let’s bring on Derek. Derek, welcome back to the BiggerPockets podcast. It’s great to have you here. Thanks for having me. Glad to be back. Could you just give our audience for anyone who hasn’t listened to some of your previous episodes, just a brief intro to you and your investing career?Yeah, real quickly, guys and gals out there, we plan design, finance, build and hold accessory dwelling units, also known as ADUs. Participated in my first A DU build in 1996 in this small southern Oregon town. And our goal now is to influence as much housing as we possibly can, and then when I die, I’m going to give it all away. And we do this through open source, so we give away free plans all over the country. We teach people how to build the plans that we give away via our YouTube channel, and we don’t sell anything. You’re not going to get an email from me. We truly are just here to help people build more attainable infill housing.You were way ahead of the curve on ADUs because they’ve been getting popular, at least from my perspective in the last few years, but you were several decades ahead, but can you tell everyone how you got started on your first one?I had a high school wood shop teacher, John Wesson was his name, and he handpicked a group of misfit kids that he knew probably weren’t going to go straight to college, and he taught us a skill and he got this group of kids together, me being one of ’em, and we built an illegal A DU for another one of our high school teachers, and I got the bug instantly. I started an apprenticeship in high school, became licensed contractor shortly thereafter, and the rest was history.For those people who don’t know what an A DU is, it stands for accessory dwelling Unit, but tell us a little bit about this asset class in particular. Derek, what about it is so interesting to you and why is it getting popular right now?What’s unique about this asset class is it’s really a hack to building small multifamily in a residential low density neighborhood that couldn’t be construed as maybe more popular place to live. B, it can be financed residentially, so you’re not having to compete with resetting debt or variable rate debt. You can get long-term 30 year fixed rate mortgages on this product, and there’s a lot of land. And the biggest benefit to this strategy is it’s the training wheels to development, and most of the utilities in most cases are already there, so you get this huge cost savings and then on top of that, you already own the land. So those are a few of the benefits. And I’d say one more kind of sneaker benefit is it’s still an underutilized strategy, so I think there’s a lot of room for upside in the next five to 10 years.And just for everyone listening, at least in my opinion, the most common way that people employ an A DU strategy is you buy a single family house or a duplex where there is zoning upside, and we’ve talked a lot about this on the show recently, is trying to find opportunities and properties where the current usage of the property is not up to the maximum allowable buildable space. So maybe you have a single family and you’re allowed to build two units, or they have a specific provision that allows for accessory dwelling units or detached dwelling units. And as Derek said, what’s so cool about it is if you could buy a property that’s a rental property that makes sense just as is the incremental benefit to adding an A DU just seems so appealing because everything you just said, you already own the land, you already have the utilities running there, and so it just seems like the return you can generate on this incremental investment seems really compelling, especially in today’s day and age where it’s harder to find cashflow.Yeah, I couldn’t agree more with everything you said with the exception of one little piece where the primary house has to make sense.
And as I look back on most of our data, a lot of what we’re buying the primary house doesn’t make sense as a rental. It doesn’t cashflow, it doesn’t even break even in most cases. And I have this argument all the time with people that say, never ever buy a cashflow negative house that is, unless the upside is so great in your financial position, can withstand a little bit of a loss on the front side because the value add on the back is so great. Everything that you said I agreed with except for the primary having to make sense.Well, I’m glad you’re disagreeing. Let’s dig into that a little bit. So when you’re saying you buy this stuff where the primary doesn’t make sense given your business, you just know that you’re going to do an A DU, so does that mean within a year it makes sense or two years? What sort of timeframe do you give yourself to turn it into a performing asset?So everything we’re doing is turned and stabilized and has long-term fixed rate debt in a year or less. And so I know my upside is soon and the things that are really important for the upside and why I care less about how the primary house performs is the primary house in most cases is collateral damage to a few things. First and foremost always is location. Second is going to be access, and then third is going to be infrastructure. So there may be a house that’s sat on the market for a while that’s way overpriced. That would not work as a flip, it would not work as a short-term rental. It definitely wouldn’t work as a long-term rental, but it has alley access, it’s a few blocks from downtown and there’s a brand new sewer main with stubs to the sidewalk, and there’s already a water meter in.
So I come in there with what I call my A DU goggles, and if you guys aren’t watching on YouTube right now, you can see these. If you’re on a podcast, I’m putting on my $5 science class goggles. And what I want people to take away from this point is that you have to look at properties different. These are my A DU goggles. I show up and I look at a property through a different lens, and most of it is how do I save money in the long run by good infrastructure, good access, and good location. So that’s why the primary house is less important. And then for the icing on the cake of this strategy, if you’re in an area that has a zoning upside as we go through this sweeping zoning reform across many states right now, a lot of states are now allowing you to sell these assets. So having the upside of potential, a lot more value add when it’s on its own tax lot is also a big piece of the puzzle of why the primary has less value in the initial underwriting.Yeah, I think with that case, we agree. I’ve been saying on the show for the last couple months now talking about upside in different ways to find properties right now that if you could stabilize something within a year or so, that’s a good deal. It’s not any different than doing a burr, right? When you buy a Burr property, it’s not going to perform right away. And so it’s just about getting it to perform in a reasonable amount of time if you’re doing that within a year. That’s I think a pretty good timeline if the numbers make sense at the end of the day. Can you just tell us a little bit about the sweeping zoning changes? You kind of alluded to just a minute ago, one of the main reasons we wanted to have you back in the news everywhere right now. Can you just tell us a little bit more about what’s driving this renewed or sort of increased interest in ADUs nationally right now?Yeah, for sure. There is, like I said, sweeping zoning reform coming across the Western states. It’s in the Sunbelt, it’s on the east coast as well. Right now we have eight states with overarching outright awesome A DU law, and the main driver is pretty blunt. Cities in high priced areas have done a crappy job for the last 50 years when it comes to their zoning laws, when it comes to their comprehensive plans, when it comes to inclusionary areas. And it’s basically made housing more and more and more unaffordable based on the premise of trying to keep riffraff the poor, the black and the brown out of lower density, higher class neighborhoods. And it’s been a massive fail, and we’ve seen that. So now what’s happening is state legislators are coming in and they’re saying, Hey, cities, you’ve done an absolute insert cuss word here, job of managing housing, and we’re going to tie your hands and we’re going to make some model code for the state, and you’re going to have to follow it.
So overarching state law is the biggest driver, and it starts with the unaffordability of housing. And I am a proponent of more affordable, I’ve been a planning commissioner, I’m an amateur planner. I’ve been literally obsessed with housing for close to three decades, and I’m really careful about affordable housing. So we’re creating more affordable, there’s two kinds of housing in my mind. There’s subsidized, affordable, and then there’s more affordable, more attainable. And because an A DU is on a smaller piece of land and it’s a smaller footprint, it therefore is a more affordable, more attainable option.That’s a really important distinction. I like that you’re calling it a difference between affordable housing, which is often used to describe, like you said, subsidized in some way by the public sector, by either local, state, federal government, that sort of affordable housing. But this a DU development strategy that you’re talking about is more of a private sector style solution to affordable houses just by increasing housing supply, which in theory will at least moderate price growth or just sort of fill a void in the housing market these days because traditional developers just are building fewer and fewer smaller homes, fewer and fewer traditional starter home style properties. And so a DU has seemed to be filling that void for a lot of people. All right, Derek, I want to hear a little bit more about how people can implement an A DU strategy, but first we have to take a quick break. We’ll be right back. Welcome back to the BiggerPockets podcast here with Derek Cheryl talking about ADUs. Before the break, we were just talking about why ADUs are getting so much attention these days. Derek, tell us a little bit about now how you see investors taking advantage of some of these trends, and if there are investors listening who want to turn a profit and help provide more affordable housing in their communities, how do you recommend they get started?I would say the best way to get started is to familiarize yourself with the zoning regulations in the market you’re trying to invest in. And this goes back to one of my friends, Henry Washington. He says, this is a people business. People think it’s a real estate business, but it’s not. It’s a people business. So you have to know the people. And when I say people, I’m talking about the planners, okay, call the city planning and zoning office and say, Hey, I’m a local investor new to this market. I’m looking to do the A DU strategy. What areas would you shop in? Can you send me a zoning map that shows areas that would be a good spot for what we’re trying to do? So I would always tell investors to build relationships in every single market you go into. There’s somebody in that market that’s doing what you want to do. Find those people, whether they’re in the public sector or the private sector, add value to them if they’re private, if they’re public, just go ask questions and familiarize yourself with the zoning regulations. Again, I don’t want to put anybody to sleep with the Z word, but that’s where it starts. I mean, you could have the best location, you could have a suitcase full of money, but if the zoning regulations don’t allow you to complete your strategy, you’re barking up the wrongTree. And is there anything in particular people should be looking for in the zoning regulation? Obviously you’re looking for permission that ADUs in general are permitted, but are there certain states or regulations or provisions that you think make ADUs easier than other types of implementations right now?Yeah. Yeah. I’ll go over some things to look for. So we’re looking for codes that don’t have off street parking requirements.
We’re looking for codes that don’t have residency requirements. Those are a couple of poison pills in the A DU community. And then the best way to figure out if the city is really a DU friendly is just to ask them how many accessory dwelling unit permits they’ve granted in the last year or the last biennium or whatnot. If it’s two, that’s going to be a tough market. If it’s Seattle and they’re like, we gave out 25,000 sets of plans last year and 19,000 of them were for a DU related builds, you’re in the right spot. Another thing that I always tell investors to look for is look for cities that already have pre-approved accessory dwelling unit plans. And what that allows you to do is completely streamline the process, save time, and save money. And it may not be your exact design, and you still have to go through the zoning process of plotting that footprint on the land that you want to build it. But when cities have free pre-approved A DU plans, they’re a DU friendly.That’s really good. And can you just find that on a local website?Yeah, you can find it on a local website. If I’m looking at, let’s just say Austin, I’ll just type in Austin a DU program, and it’ll usually take you to a city site and within 30 seconds an average intelligence person such as myself can find out if they have a program or notFor sure.But never be afraid to call the planning and zoning office and ask them for advice or ask them for resources.Awesome. That’s great advice. And I would imagine when you do find these places, they’re supportive, but are there contractors or builders who specialize in these plans? Because I’d imagine as a contractor you can make a pretty good business really getting good at these pre-approved plans.There should be. I will say unfortunately, the public private partnership is pretty sparse, and that’s because a lot of cities probably rightfully so, don’t want to endorse any individuals,ButAlways ask the planners, what architects do you like? What buildersGetTheir plans submitted with just one try? So they’re not supposed to tell you. But again, it’s a people business, and if you’re personable and you ask good questions, they’ll help you.So that’s great. That’s awesome to know. On the zoning side, what about on the property side? Because it seems to me, I live in Seattle now that there is all sorts of different things. Like when I was investing mostly in Endeavor, you saw a lot of basement conversions or simple stuff like that, whereas here you see full on detached 1200 square foot houses being built as ADUs. So what do you find? Derek is the most economical way for people to get into the A DU game?The most economical way to get into the A DU game is by far to buy a primary single family house with some sort of functional obsolescence or split level layout where you can convert a section of that primary house into a legal separate unit. My favorite is look for a house that has a master bedroom and bathroom on one side with an exterior entrance. You simply do some fire and life safety wall work. You do a fire separation wall, you pull the permits, and you can easily turn a standard house into a shared wall side by side duplex. That is by far the easiest. Cool, okay. If the basement already has exterior access, egress windows and a bathroom, that’s not a bad option. So that’s by far the most affordable. That’s where I teach all the first time home buyers to look. You’re literally shopping for a duplex that nobody else can see. Again, a DU goggles, come on. So that’s the most economical, and I would say the most economical and then the most upside are complete different sides of the scale. So the best investment in my opinion is going to be to buy a property that has room to build or convert a standalone detached accessory dwelling unit. Okay, folks.Okay.Tenants want the same things that homeowners want in this order. They want location, they want privacy, and they want amenities. And I’m telling you, we’re seeing this already in lots of markets. There’s more multifamily than ever being built. There’s all this absorption that’s taking place. There’s major concessions. If you have a shared wall or an over under a DU, you’re competing with most of the multifamily. If you have a standalone product with privacy, they have their own little sitting area, maybe they have a fenced yard, you are going to have what we like to call a really high demand low supply product. So although it’s a lot more money to build a new standalone unit, it’s going to be way more valuable. You’re going to have way more tenants, and you’re also going to potentially, if you don’t already have the option to split it off and sell it or to split it off, refinance it on its own note because it’s its own piece of land and really scoop massive leverage.Awesome. Yeah, I see these popping up all over in Seattle. They’re very popular here, but you see them in other markets too. And I’m always just curious how much they cost to build, and I’m sure it’s very regional, but do you have any ballpark numbers for us?Yeah, I’ll give you some really good examples. So I’ll give you the spectrum. So I’d say in high value markets, let’s just say Southern California, San Diego, Austin, Texas, Seattle, Washington, we’re seeing three to $400 a square foot as kind of a semi custom builder grade. For example, A lot of places allow you to build up to a thousand square feet, and we’re seeing those costs anywhere from three to $400,000. And that’s hands off as an investor, higher in a contractor through relationships to get decent volume pricing. And then on the other end of the spectrum, we owning construction and planning, designing, financing, building and holding affordable, simple, designed ADUs. We’re building ADUs for a hundred thousand dollars.Wow.And bigger isn’t always better. Our number one unit, and this is a unit that we give away, you can go to that adu guy.com, the free plans are on the top of our website, big red tab, and we’re building these 600 square foot ADUs for a hundred thousand dollars. They’re valued around three 50 to four, and they rent for anywhere from 16 to $1,800 a month. SoWhat, that’s insane.The spectrum is a hundred thousand to 400,000. Bigger isn’t always better.Derek, I do want to ask you more about those numbers, dig into those and just actually figure out what kind of returns you can get here because they seem crazy. But we do have to take a quick break. But before we do go on break, I wanted to ask you, we just put BP Con tickets for sale up early. Birds are out right now, and I understand you’re coming this year to Vegas and you’re going to be speaking. Can you tell us a little bit about what your session’s going to be on?I’m going to be talking about ADUs, everything about them, how to look for them, how to build them, how to find properties, and how to drive profit while adding needed infill housing. So I’m really humbled to be asked back for the third straight year, and I can’t wait to meet you in person.Awesome. Yeah. Well, very on-brand for you still talking about ADUs. If you want to check out those early bird tickets, make sure to go to biggerpockets.com/conference and get your early bird ticket today. We’ll be right back. Welcome back to the BiggerPockets podcast here with Derek Sherrill talking about AD before the break. He shared some insights into numbers. And just as a reminder, you’re saying that sort of high price markets, you could expect to pay three to 400 bucks a square foot, but you’re able to build some properties at a hundred thousand dollars that we’re renting for 16 to 1800 bucks a month, which is crazy, right? I mean, those are just remarkable numbers. Even if you bought that for cash, that’s a 20% cash on cash return. So can you just tell us maybe first and foremost, how do you finance these deals? Are you building them and buying them for cash or are you able to get a loan to build an A DUMultiple ways? And I want to say this for our new investors out here, I want to give some clarity. So I’m still to this day, house hacking. I could live anywhere I want in any neighborhood, in any house, and I still house hack. So the best way is to just buy a primary house and then find a way to get the money. There’s a ton of products that are popping up every day similar to a construction loan or to a bridge loan. There’s some really good ones where they’ll give you maybe a hundred percent loan to value on the unbuilt A DU based on your plan set and an appraisal when it’s finished.
The hardest part is getting the project done. Once you have the asset, it’s really easy to get your money back. I mean, it’s the simplest bur ever. Yeah, it’s the simplest refi ever. I mean, we’re able to build so much equity into these, and as long as you don’t over-designed overbuild and overspend, I mean we’re getting a hundred percent of our money back every single time on assets that steal cashflow. So when you mentioned the 20% cash on cash, if we were going to use just a cap rate model where you’re paying cash, well, we’re making infinite return because we have no money in the deal. And it’s also a brand new asset that has very little to no CapEx or maintenance for a long time. I’m not trying to be biased here, but I’m super biased. This is an amazing product.So you are trying to be biased.Oh, yes. And more people need to hear about this. And again, folks, I’ve got nothing to sell. I literally train my competition for free. I just couldn’t be more bullish right now on this asset classIn my head, I’m trying to think about the order of operations here. So does that mean if you’re trying to get a single family, do you buy the single family and finance it and then try and get a secondary loan? Or are you saying that maybe you bring your plans to your purchase mortgage and try and get all the financing done at once upfront?My theory is put as little as you possibly can down with a primary purchase, 3.5% FHA, or 5% conventional or 0% if you’re a service member, thank you. And then use the cash reserves. You have to build the A DU because you’re really going to want to refinance out when you’re done with the A DU, especially if it’s on the same lot. Yes, there are products you can show up to a closing table, talk to your lender. If your lender doesn’t know anything about a 2 0 3 K loan or a construction improvement loan or what we call a bridge build to fixed rate loan, which is where you close a loan with one closing fee, one signing, and you have renovation money and maybe a year long time to do that. And then you have the long-term fixed rate product that it rolls into. You’re going to have to use a combination of one of those.
But I just want to tell people that the good old fashioned hard work way is how I started and is how I still do it. So buy a house low down, save up to build the A DU. You might have to get creative call a family member that has money. A lot of employer sponsored plans will let you borrow 50% up to 50 K from your 4 57 or your 401k. You can also use a private loan. You can use a credit card if you have good credit and you can get no interest for 18 months. Do whatever you can. It’s usually a financial stack of multiple different sections of money to build that unit. And then when you’re done, you have this new value, just like a bur, I call it a build burIt is. I mean, the idea behind it though is exactly,And it’s a slam dunk. It’s so much easier than a remodel. Some of my big investor friends that flip 200 houses a year, they’re getting into development and they’re sending me texts just like, oh my gosh, now I get it. It’s just so much easier. There’s so many less variablesBecause it’s repeatable, right?Oh, it’s a lot more scalable. It’s a lot more repeatable, and there’s just so many less variables. You don’t have surprises when you’re building new standalone construction.And I imagine it’s awesome that you give away these plans for free. I am looking at them right now. They literally, you can just go get ’em on Derek’s website. Well, if you’re just doing this in a neighborhood, you building the same thing over and over again. So you obviously learn how to do it well. The people who are building it learn to do it well, and you just get much more efficient, I imagine over time.That’s exactly right. I’ll give everybody my three tips to saving money on your a DU build. And it’s easier than you think. It’s one is start with a simple design. Okay? A rectangular structure, a single gable roof or a flat shed roof. Every corner we deviate from a rectangle is a minimum of $10,000. So start with a simple design. Wait,Say that again?Every corner we add to a rectangle is a minimum $10,000 costs. So if you have a rectangular A DU and you’re like, well, I want mine to have a bump out, or I want it to be an L shape, or I want it to look like a snout house, or I want to do a pop-out, you’ve got more siding, more corners, more trenching, more gutters, more roof line, more labor, more everything. And just because it’s a simple design doesn’t mean they don’t look custom or cool, or tenants don’t love that. Sure. So anyways, start with simple design, self-manage the project if possible, and do as much of the physical work as you can yourself. And again, for the non builder people, that doesn’t mean you can’t do dump runs on the weekends. It doesn’t mean you can’t do the landscaping or paint or do a bunch of things to save costs, but yes, to your original question, by building the same thing over and over and over, we get this kind of economy of scale.
We don’t have any decision fatigue, and then we’re building property management into our units. So we keep all these, and if somebody calls in with a leaky faucet, we don’t have to guess what cartridge it is. We use the same faucet all the time. We give away all of our resources there too. There’s a shopping list on our website where you can see all the fixtures and knobs and appliances we use, but we just keep it simple. The crews know how to build them, we know how to manage them. And then the only thing we change is the location, orientation, and the color.I would imagine that you and your team can build these things in your sleep now because you’ve done it so many times.Yeah. Our goal always is 90 days, we build two at a time. In 90 days, we just did four in just over 120 days. But if we’re breaking ground and we’re not handing keys to a tenant 90 days later, I’m not happy.Wow, that’s super impressive. That’s faster than any flip that most people can do When you annualize your return there, I’m sure it’s very, very good.
One thing haven’t talked about Derek, but I assume it’s sort of the same principle here, is adding an A DU to properties that you already own. This is sort of what, at least personally has attracted me to it, because I own some properties that do well right now, but have the ability to add a D. And I’m thinking to myself, I could probably build this for $150,000. I can probably use a line of credit to finance it, and I can lease it out for probably 1200 bucks a month in this market. And so even if I finance it, it’s to keep 20% down, that’s 30 grand. I’d have to keep into this deal, and I’m going to be making 15 grand off of it a year. It’s like a 50% cash on cash return for that portion of my investment. It’s crazy. So is this taking off as well that investors with existing portfolios are doing this too?Yeah. Yeah, it is. A lot of the calls I get and emails and dms daily are for that same exact question is, Hey, I’ve got a couple of properties in a good spot that are flat with good access and as opposed to going out and trying to buy something else, I’m just going to improve what I have.Yeah,That’s a great investment. And a few years ago, I would say just do a cash out refinance, lock it in and get your build money there. But the home equity line of credit is amazing. It’s my secret weapon. When I say I’m building with cash, a lot of my cash is just interest only home equity secured to properties that I own. So we’ve got a big HELOC that’s at like 7.5%. It’s prime, it’s at prime rate, and it’s interest only. So we’ll pull the HELOC on a build, and because it’s a month late, we’ll build the unit, we’ll occupy the unit, we’ll refinance the unit, and a lot of times we’ll only pay debt for two and a half months.Wow.So on a hundred thousand dollars a DU at seven and a half percent, it roughly costs us $3,000 to build a hundred thousand dollars asset that appraises at $400,000. That’s insane. Wow. I get a lot of flack for giving a lot of stuff away, and in my mind and in my heart, I just sometimes feel like I’m cheating. It’s like, how could I not give all this stuff away? I can’t believe we’re able to do this. So the home equity is very, very, very, very powerful. But you have to have a plan on the back end to refinance it. And more importantly than the plan, everybody can have a plan. You have to be able to execute. You’ve got to be lendable. You have to have a good debt to income ratio. Don’t go build your first A DU, get this big rent check and go buy a brand new Toyota Tacoma and crush your DTI. So the relationship with the lender is really, really important. So when you’re using the heloc, how do you pay the HELOC back? We don’t like interest only debt long. That’s a short-term play.Great. Very practical advice. Derek. Thank you. I think that financing piece is going to be super important for a lot of people who are thinking about how to do this. HELOCs a great way to do it. Highly recommend thinking about that. This is kind of a perfect situation for when you want to use a line of credit for these short-term types of investments. Derek, this has been super helpful. Thank you so much for sharing all of your knowledge. Before we get out of here, you mentioned that a bunch of states have done this and they might be coming to more near you. Can you tell us, do you know off the top of your head the states where this is more achievable than others?Oh yeah. Home run states right now, Oregon, California, Washington, Arizona, Montana, Connecticut. Oh, wow. Most of Texas. Not state of Texas, but most of Texas. So there’s about eight right now that have overarching state law with about 10 or 15 in the works. And my prediction is that in the next maybe five to eight years, it’ll be half of the country.Yeah. The trend just seems to be going in this direction. You hear more and more, even if they’re not at states, like you said, local levels. Lot of municipalities are encouraging this because honestly, people don’t have that many other ideas to create more affordable housing. And this is one that has been proven to work. And so I would expect that people will scale it, and as Derek has shown us today, it makes sense on both sides. Right. It makes sense from a investor standpoint, and it hopefully is going to also create some more affordable housing, as Derek had said. Well, thank you so much for being here, Derek. We really appreciate your time, and I look forward to seeing you at BP Con later this year.Awesome. Thanks for having me, folks.Thanks again for watching. We’ll see you next time.