Good day, and thank you for standing by. Welcome to the Legacy Housing Corporation Third Quarter 2023 Earnings Call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question-and-answer session. To ask a question during the session, you need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised today's conference is being recorded. I would now like to turn the conference over to your speaker today, Duncan Bates. Please go ahead. Good morning. This is Duncan Bates, Legacy's President and CEO. Thanks for joining our third quarter 2023 conference call. Max Africk, Legacy's General Counsel, will read the Safe Harbor disclosure before getting started. Max? Thanks, Duncan. Before we begin, may I remind our listeners that management's prepared remarks today will contain forward-looking statements, which are subject to risks and uncertainties, and management may make additional forward-looking statements in response to your questions. Therefore, the company claims the protection of the Safe Harbor for forward-looking statements as contained in the Private Securities Litigation Reform Act of 1995. Actual results may differ from management's current expectations, and we therefore refer you to a more detailed discussion of the risks and uncertainties in the company's annual report filed with the Securities and Exchange Commission. In addition, any projections as to the company's future performance represent management's estimates as of today's call. Legacy Housing assumes no obligation to update these projections in the future unless otherwise required by applicable law. Thanks, Max. I'm joined today by Jeff Fiedelman, Legacy's Chief Financial Officer. Jeff will discuss our third quarter performance, then I will provide additional corporate updates and open the call for Q&A. Jeff? Thanks, Duncan. Product sales decreased $11.7 billion, or 24%, during the three months ended September 30, 2023, as compared to the same period in 2022. This decrease was driven by an industry-wide decrease in unit volumes, a decrease in net revenue per unit, and a decrease in the conversion of certain independent dealer consignment arrangements to financing arrangements and other market factors. For the three months ended September 30, 2023, our net revenue per unit sold decreased 1.6% to $63,600. Consumer and MHP loans interest income increased to $8.8 million, or 25.7%, during the three months ended September 30, 2023, as compared to the same period in 2022. This increase was driven by increased balances in the MHP and consumer loan portfolios. Between September 30, 2023, and September 30, 2022, our MHP note portfolio increased by $47.8 million, and our consumer loan portfolio increased by $16.8 million. This is net of principal payments and loan loss allowances. This does not include floor plan financing or development loans. Other revenue primarily consists of contract deposit forfeitures, dealer finance fees, and commercial lease rents, and increased to $4.1 million, or 150.8%, in the third quarter of 2023, compared to the third quarter of 2022. This increase was primarily due to an increase in forfeited deposits and an increase in floor plan financing fees. The cost of product sales decreased $8.7 billion, or 25.9%, during the three months ended September 30, 2023, as compared to the same period in 2022. The decrease in costs is primarily related to the decrease in units sold. Product gross margin was 32.9% for the third quarter of 2023, up from 31.9% for the third quarter of 2022. Selling general and administrative expenses decreased 9.2% during the three months ended September thirtieth, 2023, as compared to the same period in 2022. This decrease was primarily due to a decrease in warranty costs and a decrease in other miscellaneous costs, partially offset by increased legal expenses and an increase in loan loss provision. Net income increased 9.2% to $16.1 million in the third quarter of 2023, compared to the third quarter of 2022. Net income margin was 32.2% for the third quarter of 2023, up from 25.7% for the third quarter of 2022. We ended the quarter with $0.5 million in cash and $13.0 million drawn on our line of credit. On July 28, 2023, we closed a new revolving credit facility with Prosperity Bank. The facility is for $50 million, with a $25 million accordion feature. It is secured by our consumer loan portfolio. Legacy delivered an 18.6% return on shareholders' equity over the last 12 months. At the end of the third quarter of 2023, Legacy's book value per basic share outstanding was $17.61, an increase of 18.7% from the same period in 2022. Thanks, Jeff. We're happy to have you on the team. Let's start with the market, then I'll discuss Legacy's financial performance and provide an update on strategic initiatives. According to Manufactured Housing Institute data, industry home shipments through September of 2023 are down 25.7% year to date. However, housing affordability in the U.S. continues to deteriorate, and large numbers of potential home buyers are priced out of the traditional housing market. We held our 2023 fall show in Fort Worth in early October. As I mentioned in the press release, the 2023 show was one of the most successful sales events in the company's history. The show orders extend backlogs at our Texas facilities well into the first quarter of 2024, at a higher production rate than the third quarter of 2023. Both dealer and park customers ordered homes at the fall show. The retail or dealer side of our business is showing signs of life. Foot traffic is up, and dealers are selling homes. Although it varies by geography, we believe that most of the destocking issues from early 2023 are largely behind us. The reorder rate is lower than we would like, but inventory carrying costs are also higher. One important data point on the dealer side, Legacy's consumer finance business closed more loans in October 2023 than any other month in the company's history. On the community or park side of the business, sales to community owners and developers remain stable. Like other manufacturers, we have battled delayed shipments due to setup-related issues, discriminatory zoning practices, and high interest rates are headwinds for new developments. We secured a few large park orders with deliveries extending through mid-2024. I'm proud of our team's performance to date in 2023. Despite a 25.7% decline in industry-wide shipments through September, Legacy's net income is only down 1.5% year-to-date through the third quarter. We are driving sales and managing expenses effectively. Interest income from 12 months of reinvesting our profits back into the loan portfolios drove a meaningful portion of the year-to-date profits as product sales declined in 2023. At September 30, 2023, over 99.3% of MHP notes and 98.5% of our consumer loans are current, or less than 30 days without payment. We monitor these numbers closely and are confident in the strength of our loan portfolios. I received positive feedback from the last call about discussing projects that the team is working on. Here's where I'm focused. Hiring. We're making a big push to hire young, hungry individuals that are committed to a career at Legacy. Our team is lean, aging, and possesses a tremendous amount of industry knowledge. Our goal is to create a path for motivated individuals to harness this information and advance within the company. Number two, working capital. Our working capital is too high. We have too much raw material and finished goods inventory. We are working to reduce inventory and free up capital that can be reinvested back into the business. Third, Georgia sales. The Texas plants are in good shape from a sales standpoint. Our team in Georgia has done a great job with product quality, and we are now building the highest quality homes that have come out of the Eatonton plant. Now we need to accelerate sales. Most of the sales team is new and learning. Kenny and I have been heavily involved, and we are starting to see results. We need to keep the hammer down, though. Number 4, workforce housing. We have 40-plus floor plans and have not historically made a push in this space. We continue to bid on large projects with well-known disaster relief service providers. Legacy has the balance sheet to hold and lease large amounts of inventory. It's too early to discuss specific projects and numbers, but I continue to believe that workforce housing is a huge opportunity for Legacy. Number 5, land development. We hired a dedicated team to prioritize and accelerate land development. Completing phase I of Del Valle or Bastrop County outside of Austin is our top priority. Water and electricity are in. Road construction and construction of a water treatment plant begin in November. Delaying construction at several properties may have helped us. For example, some properties were in very rural areas when purchased. Now, 5+ years later, there are plans to run city sewer and other services that will increase value and provide flexibility. We continue to evaluate ways to maximize the value of these projects for our shareholders. In addition to these internal projects, we are consistently evaluating inorganic growth opportunities. The new bank line gives us the flexibility to pursue these opportunities if they hit our returns threshold. One final thought on valuation. We are growing book value or shareholders' equity at about 19% a year. Legacy was started with $700,000, and we have grown that equity to $429.5 million in 18 years. Make it, save it, invest it, again and again. Our book value primarily consists of finance notes at par with a reserve, inventory at cost, and land developments at cost. Our facilities and equipment are mostly depreciated. We believe that our book value is conservatively stated and is near the company's liquidation value. We publish our book value per share each quarter. As of September 30, 2023, our book value per share was $17.61. That number is a month and a half stale, and our stock is trading in the $19 range. It's not much of a premium. If the stock trades at or below book value per share, we will use the full extent of our balance sheet to repurchase shares. I believe that we can continue growing shareholders' equity at 18%-19% a year in this high interest rate environment, and that our share price will begin to reflect this. If you do the math, the numbers get large quickly. Any strategic moves are icing on the cake. Operator, this concludes our prepared remarks. Please begin the Q&A. Thank you. Ladies and gentlemen, if you have a question or a comment at this time, please press star one, one on your telephone. If your question has been answered, and you wish to remove yourself from the queue, please press star one, one again. We will pause for a moment while we compile our Q&A roster. Our first question comes from Mark Smith with Lake Street. Your line is open. Hi, guys. Duncan, first, I wanted to dig into gross profit margin just a little bit more, you know, really solid execution there. Can you talk about any, you know, additional drivers there? Maybe what you saw. You know, or is inflationary pressures gone down, what you're looking at for labor, you know, any, any insights there would be great. Yeah, sure. Hey, Mark. So a couple thoughts for you. Obviously, you know, volume was down pretty significantly in the third quarter, so managing expenses is extremely important. You know, we've been able to hold price even at lower volumes, and material prices have come down. Labor and overhead on, you know, on the other side of things, have continued to go up, and they're not, you know, accelerating at a quick rate, but it certainly has had an impact on gross margin. You know, I would expect as we ramp up production and continue to manage our costs that we can, we're trying to hold these margins where they are, but obviously managing inventory as well as labor. Okay. And then, you know, solid performance on the consumer finance loan business. Did you guys use rate there at all to kind of help drive that? It looks like maybe we saw rates down a little bit, you know, any discussion around that? Yeah, you know, we're. I think our rates across the loan portfolios have been pretty attractive and certainly helped us drive sales. You know, we are taking rates up a little bit on the consumer loan portfolio, but we've not, those won't be included in the third quarter numbers. So I think we've got an opportunity to pick rates up, you know, a little bit here to get back in line with the market. Okay. And then any, y ou know, you guys have done a good job kind of managing, you know, charge-offs and any issues within the portfolio. You know, any changes in kind of your underwriting policies, or has everything kind of stayed the same there? You know, they've stayed the same. I feel pretty good about our underwriting processes. You know, we have added additional collections personnel to the team just in the event that you did start to see some cracks in the loan portfolios. You know, but we're keeping an eye on it and, you know, we make a lot of calls, we monitor it closely, and, you know, we've continued to perform, you know, with managing those portfolios. Okay. Great. Thank you. Thanks, Mark. One moment for our next question. Our next question comes from Alex Rygiel with B. Riley Securities. Your line is open. Thank you. Hey, Alex. Great quarter, Duncan and team. Nice quarter there. Thanks. A couple quick questions here. First, you've been holding your average selling price at a nice level here. Any reason for that to change, sort of over the intermediate term? No, we plan to continue to hold it. You know, I think the one thing that has changed, remember last quarter, we saw a pretty significant drop in average selling price quarter over quarter. I think that's stabilized. You know, and it's stabilized toward kind of, you know, smaller less optioned homes. But I feel pretty good about where it is now. I don't think we'll see another, you know, another major drop. But as far as pricing goes, I mean, we're now ramping up production at both of the Texas plants. We've got a nice backlog well into the first quarter, and so, you know, I don't plan to see any price degradation, you know, into 2024. And then you've been talking about larger kind of commercial customer orders, and that's super exciting. Kind of two questions: I suspect it's a little bit different of a product, but can you talk about that as it relates to average selling price and margin, kind of at the end of the day, the margin on that product? And is there any risk that it's a different margin, and creates a headwind? Yeah. So, you know, we're, we're still in the early stages of this, and then, and all this came about by obviously, you know, orders were pretty slow through the year, and, you know, Kenny and I hit the road and have been meeting with as many people as we can to sell all the product that we can. And we've actually, we've got- you know, we, we build this product already, Alex. So, but we're typically selling it to, you know, dealers in South Texas and in West Texas, who have relationships with, you know, mainly oil field services companies to house their workers. And so for us, it's always been, you know, 4 homes here, 10 homes there, and, and never a, you know, a focus from a direct sales standpoint. But as we dug in, I mean, there's a lot of these projects and, you know, we're primarily competing against a different product, you know, it's skid-mounted metal product, it's more expensive to manufacture. So I think from a, you know, a price standpoint, we're pretty competitive. You know, the margins on that product look similar to our other, you know, our other products. I mean, it's essentially large single wides with, you know, individual studio-type apartments, with or without, you know, kitchenettes and all with bathrooms. And so it's something that we're, you know, we have experience building. It's not built to a different code or anything like that, that would significantly increase the price. But really the interesting thing to us is, a lot of this product is leased, and, you know, from what we can tell, the lease terms are pretty attractive on larger products. And so it's a little early. I wanna, you know, get contracts signed on a couple things before we, you know, talk about it. But I think there is a large opportunity, and I think it does help diversify the business, as well as potentially growing the recurring revenue side of our business. Double. And then lastly, as it relates to community development, obviously Del Valle is your most attractive kind of near term. Can you help us to understand when homes might get delivered to that site? And then as it relates to other real estate that you own, any opportunities to sell these land assets and redeploy that capital into a share buyback? Yeah. Well, you know, I'm putting them in three buckets. I think that there is a bucket for, you know, that makes sense to sell. You know, there's some properties that are just raw land, where we haven't made a lot of progress and they're smaller, maybe not suited for a development, or there's some reason why they're cost prohibitive. So I think on those, you know, we can, you know, we can sell them when we feel like the market's right and make a nice return. There's a second bucket, and I mentioned this on the call where, you know, since these projects have taken a long time, you know, there have been developments. And so we've got a situation, you know, where we're seeing, you know, the area that this was in, you know, grow pretty significantly, and, you know, their city sewer and water, you know, come in, in the near term. And so I think that, you know, that bucket, we'll have to look at hard on, you know, what's the, what's the best use of these, you know, of these projects. You know, could be MH, could be single family, but we, you know, we wanna maximize the value. And so that's, that's bucket number two. And then bucket number three is, you know, is, is Del Valle and, you know, and Horseshoe Bay, and some of the other projects that are further along. And I, I think we've got to, you know, we've got to accelerate those, to create value. You know, we've now got a full-time team working on these projects, and I'd still- you know, they're, they're newer, they're getting up to speed on what's been done historically and what needs to happen. I'm hesitant to give you a timeline for Del Valle because we've shattered it so many times in the past. But I think by, you know, I think by year-end, as we start to, you know, get the roads in and the water treatment plant is being built, I think next call, you know, I'll have a really good idea of when homes actually start getting placed on those lots. Very helpful. Thank you very much. Yeah, thanks, Alex. One moment before our next question. Our next question comes from Tim Moore with EF Hutton. Your line is open. Thanks, and congratulations on the continued good operational execution. Thanks, Tim. Vastly. Yeah, it's vastly improved since you took over, Duncan. You know, I just wanted to kind of follow up on a thread that's probably on all the investors' minds. I mean, your gross margin has done impressively, you know, if not surprisingly well, the past three quarters, despite the industry volumes downturn and even the minor ASP drop in the spring, for the industry. So, just for the September quarter, you just reported, anyway, Duncan or Jeff, to maybe parse out how much of that gross margin expansion in the quarter, you know, came from maybe cost deflation versus any benefit you might have had from some conversion of floor financing? Yeah, there's no floor plan financing in this quarter. And so really, you know, I'd say the majority of it is just from, you know, better execution on the purchasing side, and I think we still have a ways to go. You know, I think that vendors are obviously reluctant to, you know, to give price decreases unless you really push for them. And so, you know, the majority of that margin expansion came from purchasing. You know, but labor's continued to go up, and I think the market has softened a little bit, and it's not, you know, it's not accelerating like it was through COVID. But, you know, that's something that we're certainly keeping a close eye on, is our in our labor cost per sq ft produced, and we track it pretty closely. But I'd say over the last, you know, five years, you see a continued increase in your labor costs. And, you know, as we talk about ramping up production and hiring people, you know, we're certainly paying higher wages than we did four or five years ago. So the goal is, you know, to continue to push on, you know, on purchasing and, you know, and add labor to ramp up production in an organized way, instead of just, you know, you pay a bunch of laborers a lot of money to stand around. No, that makes sense. I mean, it really is very impressive what you've done with the gross margin. So Duncan, maybe, you know, you mentioned in your prepared remarks that Legacy closed more loans in October than any other month in Legacy's history, you know, the consumer loan front. Can you maybe share with us just the cadence, the monthly cadence during September quarter? In other words, was it incrementally better every month with the volume and the orders, you know, from July through September? Just trying to get a sense, maybe if you're kind of seeing a bottom. Yeah, I mean, I feel like internal sentiment from a sales standpoint was the lowest I've seen it, you know, in the third quarter. I think we're in a much better place now, and I think that, you know, the success of the fall show was a big step in the right direction. That was something that I was pretty concerned about. And, you know, we sold a lot of homes, and that's great. You know, how can I answer your question better? Sorry, Tim. No, no, I'm just trying to think, you know, now that you have, if you kind of parse out that amazing show you just had and demand and orders, I mean, do you kind of feel like the floor is in for the industry, maybe on volume and consumer sentiment? Yeah, I think volumes, you know, we're ramping up volume. Sales are looking good in Texas. Back to your question, I lost my train of thought. You know, on the lending portfolios, we haven't, you know, changed anything. I think the increase in applications and actually closing loans speak to a little bit of a pickup on the dealer side of the business. You know, these loans don't close overnight. There's a whole underwriting process associated with them. So it's not perfectly linear, but, you know, we saw originations, you know, this fall, or applications, you know, reaching pretty good numbers. Brandon and his team that run that business for us just did a good job of execution in October, and, you know, we plan to keep it going. That's great. I remember meeting Brandon a year ago. And my last question is, you know, just regarding the CFO role change, you know, maybe, maybe can Jeff comment on maybe what he brings to enhance Legacy Housing? I read about his accounting background and his finance experience, but maybe just give him a shot to do a little commercial on what he brings. Yeah, sure. I'll turn it over to Jeff, but I'm happy to have him on onboard. Thanks, Tim. Thanks for asking the question. I've got a pretty diverse background, you know, good, good operational background, especially in manufacturing, and, you know, really good experience helping businesses grow from, you know, one stage to the next in terms of process and operations and scale. And, you know, I have. I've had the benefit of getting exposed to Legacy a couple years ago, and learning the business a little in a consulting role. And so coming in, it's you know, it's been, you know, you don't, you don't always have that luxury of knowing the business pretty well before you come into something new. But it's a good team here, and it's, you know, I feel like I bring, you know, good, you know, good, solid experience, across the board from an operations perspective, from a finance-corporate finance perspective, and on the accounting side, and getting through some of the issues that the company's had historically. Great. Those are helpful insights. Thanks for sharing, Jeff. And Duncan, thanks for answering my questions. I'm all set for today. Yeah. Thanks, Tim. One moment before our next question. Our next question comes from Jay McCanless with Wedbush. Your line is open. Hey, good morning, guys. Welcome aboard, Jeff. Duncan, could you maybe walk us through, i t sounds like the show went really well, but what was the feedback from the dealers? Just a couple three, maybe high points you could give us. I mean, it sounds like with the order rates, they're getting more bullish as we think about the spring, but anything that stood out from your talks with the independents? Yeah. You know, Jay, 2023 was a pretty hard year for the independent dealers. I mean, you, you come off of, you know, just the market absolutely going gangbusters in 2022, up until the end of the year, and backlogs being stretched out. So, you know, when they were selling a lot of homes, they were ordering a lot of homes, but they weren't able to get those immediately. And so you just, you had a situation where, the demand really dried up from the retail customer, and then as backlogs came in, you know, I think that there was a lot of inventory that was forced on these dealers, and they were having trouble selling it. And then you've got, you know, you've got the carrying cost, going up as well. So I mean, I think a lot of these guys, you know, were in pretty, pretty tough shape. And the show was, you know, surprisingly optimistic. I mean, we were pretty worried about turnout and about, especially about orders. I mean, we kind of thought that at a minimum, people would come to, you know, to party in Fort Worth with us, but, you know, we were worried about the order front. And so I think the good news is, you know, we're seeing a lot of dealers sell homes, and a lot of those homes have been sitting for a while, and so it's good to see them start to move. We had ran some specials and, you know, I think the sales effort on the dealer side was great. You know, now they've just got to focus on executing and moving any, you know, aged inventory they have. But, you know, what we haven't seen yet is a reorder rate that's as high as we like it, and I think that's mainly driven by the carrying costs of the inventory, you know, being higher. But I think as these guys continue to sell homes, you know, they'll continue to order homes, and it's nice to have that piece of our business, you know, moving in the right direction, because at the beginning of the year, that certainly wasn't the case. That's great. And then I guess you answered my price question, I think, but just this, this mid-$60s, mid to low $60s, you think that's probably gonna be a good number to use for the next couple of quarters for modeling, in terms of average price? Yeah, I think so. You know, I think all the customers are a little squeezed. You know, you've got on the retail side, inflation's been tough for this customer. You know, they probably like a little bit larger homes, but, you know, the payments may not work. And so we're selling a lot of, you know, we're selling a lot of single wides, you know, with- that aren't, I'd say, fully optioned. And then, you know, we see the same thing on the park side, where, you know, some of the community owners are going to a little bit smaller homes, to keep the monthly payments down, for the financing. So I'd say that's a pretty good number. You know, if we see a big, you know, big pickup in double wides going out or we hit one of these, you know, these workforce housing deals that are a little bit higher units, that could go up. But for right now, from a base case standpoint, that feels like a good, you know, an ASP to me. Okay. And then just one other question. We've heard about some commercial banks in the U.S. pulling back and exiting doing floor plan lending for the MH space. Is there any opportunity for Legacy to maybe go a little further afield and pick up some business as some of these banks have been exiting? Yeah, absolutely. I mean, I think that's actually a pretty big opportunity for us. We've made some changes to our floorplan program and the team that executes it. But, you know, there's a lot of dealers that we don't floor, and so there's an opportunity to, you know, to expand and add some more dealers. You know, we've got other dealers that floor with someone else, but carry Legacies. And so I think there's an opportunity to, you know, to convert those over to us as well as, you know, add more Legacy homes on their lot. And I still think there's an opportunity to grow the consumer finance business. You know, we've got, we've got a lot of dealers, that I wouldn't say we're their, you know, we're their number one financing choice at this point, and so I think there's an opportunity to make a push there. So you're, you know, you're adding floor plan financing, but you're also pushing the, the consumer, you know, lending business as well. Okay. That sounds great. Thanks for taking my questions. Absolutely. Thanks, Jay. One moment before our next question. Our next question comes from George Melas-Kyriazi with MKH Management. Your line is open. Great. Thank you. Good morning, gentlemen. I have a question on production and inventory. My understanding is that you were sort of increasing production in the quarter, but sales, of course, were rather soft, and finished goods inventory, even though maybe pretty high, was flat sequentially. So I'm trying to square that and try to understand if you actually did increase production in the September quarter, or sort of how did you handle that to manage to keep finished goods inventory flat? Yeah, I mean, you know, production in the quarter was down pretty significantly. I mean, I felt like third quarter was about the lowest that we were running at all the plants. And, you know, we still, we did miss a production day, you know, but we were really building, you know, 3 homes, you know, on average at each plant, which was down pretty significantly from, you know, kind of mid-2022 or third quarter of 2022. Now we've got a little bit of an easy comp because in the third quarter of 2022, that's when we really started having the issues at Georgia. And so, you know, production was down in the third quarter. We're taking it up in Texas now. We've still got some work to do in Georgia. You know, we were, we haven't ramped production up there. We've got too much finished good inventory at Georgia that we're working to move, and I really feel like by, you know, by Q1, we'll be back on track there. We'll get a lot of that finished good inventory shipped, and, you know, we should have the orders to start taking up production at that time. Okay. And remind me, Georgia, that's mostly park homes, or is it also to the retail channel? Yeah, it's both. You know, we've got a couple large park customers there, so we have built a lot of that product. And they've been, you know, just kind of large, or I'd say, you know, good entrepreneurs that have large, real estate portfolios, and they've bought a lot of homes from us, and they've been pretty loyal. And so we're, you know, we appreciate them, but we've also, you know, we have a, Legacy has a dealer presence in the Southeast through Heritage Housing, and we also have some independent dealers there. But, you know, as I add to that sales team, you know, we've, we've hired a lot of people. I mean, where I think we've hired seven or so salespeople in the past few months, and, you know, we need to get back on track with the dealer business. It's just, it's a large territory, and so you can't have, you know, two people covering the entire Southeast for dealers effectively. So I think there's a lot of opportunity there, now that we've gotten through the quality issues and the service issues, and are starting to regain our customers' trust. Okay, that's great news that quality has improved. Question about sort of cash, your loans, and your line of credit. Your line of credit, of course, was unused at the beginning of the year, now you have $13 million. So you seem to find good opportunities to increase your own portfolio. Do you think that continues, or is there a limit to that? Yeah, I mean, you know, cash is king right now, and so if you've got the ability to to lend into this industry, you know, there's plenty of opportunities. And so, you know, we're being, we're being selective, but we have had some good opportunities to put money to work at, you know, at, at pretty attractive yields, even though the, you know, the cost on anybody's bank line, it's variable, you know, is, is fairly high right now. And so, you know, we'll be selective. We're not going to go crazy, but we're certainly not going to turn down, you know, good opportunities to either invest in the loan portfolios or on the development loan side, where we can put money to work, you know, with a lien on a property and a personal guarantee at kind of, you know, high teens yield. Okay. Makes sense. And then just a final quick question: It seems like your own retail operation seems to be doing a little bit better. Have you worked out some of the kinks there, or? Yeah, we're working on it. You know, I think Heritage has a lot of potential. I mean, you know, we haven't added additional locations in a couple years, and we're seeing some opportunities to do that. But the key is getting the management team in place. We've made a few changes at the senior management team. We've got a few additions that we need to make, but you know, I feel pretty good about how Heritage is being managed. And you know, we're selling more production through Heritage than we have in the past. And I think-- but it's still lower than where we would like to be. And so that's, you know, that's another area that I feel. I feel like we have, with the right team, you know, we've got a good opportunity to grow that side of our business. And, you know, it's still significantly below where our peers are in terms of production that we are selling through our company-owned retail stores. So, I just think there's a big opportunity in Heritage. Great. Thank you very much. Yeah, thanks. One moment for our next question. Our next question comes from Roman Nemtsov, who's a private investor. Your line is open. Thank you. Hey, Duncan and Jeff, congrats on a great quarter. I wanted to ask a question related to the land development. Maybe if you can give us a little bit more specificity regarding who you hired as part of this new team and sort of what your overall vision is for that whole business. Yeah, I mean, you know, we're still in kind of the early stages of it. We broke the developments up into regions, and we've got essentially a regional manager with, you know, some team members below him, in each region. And the goal right now is just to, you know, prioritize and accelerate the development on these properties. And so, like I was speaking about earlier, we've got three buckets we're looking at. I think, you know, some of them, as we dig a little bit deeper, may make sense to sell. There are some that may make sense to hold, and then there are certainly the ones that we've made good progress on that we're really trying to push forward quickly. And so, you know, I'll continue to provide updates. I understand it's kind of- it's high level, but I'm still, you know, getting my arms around it and making sure that whatever decision we make on these properties, you know, they're all being, you know, executed from the lens of creating the most value for the shareholders. And so it's not gonna be, you know, it's not gonna be overnight, but I think that, you know, the easy ones are, you know, either, hey, we need to accelerate this, or, hey, we should just look at selling this and what's it worth? And if there's something that, you know, makes sense to sell and you can make three, four, or five times your money, it's probably a good, you know, good opportunity to do that. Thanks. That's helpful. I guess my question is, do you see this as like a vertical of the business? Like, is this gonna be, you know, a full rent type of product that's gonna be held on a balance sheet for a long time, and you're just gonna sort of accelerate? Or is this something that's more of, I guess I'm trying to figure out if this is a trade or if this is a long-term hold. Yeah, it's, I'm trying to figure that out, too. Okay. You know, look, the biggest headwind of this, in this entire industry is where to put these homes. And so I think if you can create a model that is, that you can replicate over and over again, that allows, you know, our customers, to sell homes into communities, you know, that's, that's a pretty good model. But it's, you know, it's gonna take some time to get there. And so that, that's-- I mean, you hit the nail on the head. That's what I'm trying to understand now. You know, I'd like to think that we can come up with something, you know, pretty creative, where this, this is a model that we can replicate, and solve, you know, the largest headwind for our industry. But I'm, you know, I'm not, I'm not—and we, and we have a good starting point. We just have to execute on that and, and use the knowledge to create something that we can replicate over and over again. And so that is, that is precisely what I'm trying to figure out. One, one more question on this. What do you think is the biggest headwind for you to sort of figure this out? Is it capital? Is it time? I mean, what is the limiting factor to sort of- No, I think we've, I think we've got the capital. You know, I think we've just got to understand how it's viewed and, you know, from a, from a public market standpoint and how the cash flows will be valued. Then, and that's gonna, you know, that's gonna determine if these are, you know, long holds or, are these—can you get them to a point where you can maximize, you know, the value for the shareholders? Because, you know, if I finish Del Valle, and I've got, you know, 1,100 spaces and, you know, rents coming off of those, and, you know, are investors gonna value that at 7 times earnings, or are they gonna value it like Sun Communities at 30 times earnings? And so I don't know the answer to that question yet. Understood. Thank you so much. Yeah, thank you. I'm not showing any further questions at this time. I turn the call back over to Duncan for any closing remarks. Sure. Thank you. I'd like to thank everybody who joined today's earnings call. We certainly appreciate your interest in Legacy. Operator, this concludes our call. Ladies and gentlemen, this concludes today's presentation. You may now disconnect and have a wonderful day.