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Spring Ho
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Freshly New Investor and wants guidance on where to start

Spring Ho
Posted Mar 30 2023, 12:07

Hello, 
After reading books( rich dad poor dad, etc) , and listening to BP, I've decided I really want to get my life on a path of financial freedom, and free of my restrictive parents. 

My goal is to have my first property I buy, to be a multifamily. My ideal goal is to buy a quadplex or triplex. If I truly can't find a good deal then I'd be okay settling for a duplex and wait the year to do the exchange and slowly build up my portfolio (I want to buy and hold my properties). One of my discouraging factor is that I don't make much to start with, and hope the real estate investing will help change that.

My question I have right now to start is, where should I go? I've read post that we don't need to look far, just from our backyard, but in Portland oregon the prices seem out of my reach. I know the very first step I should do is talk to a lender to better gauge what I can afford, but do I need to talk to a lender that is local to where I buy? Since I'm not sure if I want to invest in Portland oregon with how the prices are. I don't want to go out of portland/beaverton/hillsboro since the things I want near my property is ease of transportation, as I don't have a car.


What states would be good to start a multifamily where I can make some cash flow or at least break even so I can save for a downpayment for my next property?
 

I'm interested in doing short-term leasing in the units also for travel nurses/insurances, so a health focused area is nice too!

I'm a 25F so safety is a high priority for me as an individual, so states with high crime rate such as Ohio and Indiana is not appealing. But this is just based on research I've done on the internet, so any insight to help explain that I don't have to be as weary would be awesome if a location you are advising has concerns. 

I also would like the location to be a bit convenient for me to travel by transit 

States/areas I've looked into, but not sure if I should make the jump:

-Minnesota Minneapolis/St.Paul  ( heard rent is going down in these areas, and it's not landlord friendly either)

-Iowa Des moines

I have about 11k that I've saved up that I can put for a downpayment and 8k to cover closing cost; but if I can have the seller to pay that then it would help with any remodeling to help increase the properties value or I can use it to buy a cheap car that can get me to point A- B

TLDR:

Good states to start buying your first multifamily home?

-Low crime rate

-decent location that is accessible to reliable transit

-growing city (economy, jobs .etc)

Ideas which state to go to before I talk with a lender; or can I talk to any lender located anywhere; so I can make multiple credit checks all at once when I talk to them.

Thank you, for reading. I look forward to your responses! 

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Cory Carlson
  • Real Estate Broker
  • Oregon
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Cory Carlson
  • Real Estate Broker
  • Oregon
Replied Mar 30 2023, 13:39

I would save more capital before you dive too far into any of the stated markets. 

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Spring Ho
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Spring Ho
Replied Mar 30 2023, 14:46

Do you have an idea of how much more capital I should have saved? Finance wise I do have an emergency fund (separate from what I've saved) to keep me float for 4-5 months for unexpected events

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Hamp Lee III
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  • San Antonio, TX
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Hamp Lee III
  • Investor
  • San Antonio, TX
Replied Mar 30 2023, 18:26

Welcome to BiggerPockets!

I recommend starting with a house hack. And as a first-time home owner, there are programs to help with your down payment and can use some of the money you saved in other areas.

Real estate investing is a long game. Celebrate small wins. Take action.

I wish you all the best.

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Lawrence Potts
  • Real Estate Agent
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Lawrence Potts
  • Real Estate Agent
Replied Mar 30 2023, 21:03
Quote from @Spring Ho:

Hello, 
After reading books( rich dad poor dad, etc) , and listening to BP, I've decided I really want to get my life on a path of financial freedom, and free of my restrictive parents. 

My goal is to have my first property I buy, to be a multifamily. My ideal goal is to buy a quadplex or triplex. If I truly can't find a good deal then I'd be okay settling for a duplex and wait the year to do the exchange and slowly build up my portfolio (I want to buy and hold my properties). One of my discouraging factor is that I don't make much to start with, and hope the real estate investing will help change that.

My question I have right now to start is, where should I go? I've read post that we don't need to look far, just from our backyard, but in Portland oregon the prices seem out of my reach. I know the very first step I should do is talk to a lender to better gauge what I can afford, but do I need to talk to a lender that is local to where I buy? Since I'm not sure if I want to invest in Portland oregon with how the prices are. I don't want to go out of portland/beaverton/hillsboro since the things I want near my property is ease of transportation, as I don't have a car.


What states would be good to start a multifamily where I can make some cash flow or at least break even so I can save for a downpayment for my next property?
 

I'm interested in doing short-term leasing in the units also for travel nurses/insurances, so a health focused area is nice too!

I'm a 25F so safety is a high priority for me as an individual, so states with high crime rate such as Ohio and Indiana is not appealing. But this is just based on research I've done on the internet, so any insight to help explain that I don't have to be as weary would be awesome if a location you are advising has concerns. 

I also would like the location to be a bit convenient for me to travel by transit 

States/areas I've looked into, but not sure if I should make the jump:

-Minnesota Minneapolis/St.Paul  ( heard rent is going down in these areas, and it's not landlord friendly either)

-Iowa Des moines

I have about 11k that I've saved up that I can put for a downpayment and 8k to cover closing cost; but if I can have the seller to pay that then it would help with any remodeling to help increase the properties value or I can use it to buy a cheap car that can get me to point A- B

TLDR:

Good states to start buying your first multifamily home?

-Low crime rate

-decent location that is accessible to reliable transit

-growing city (economy, jobs .etc)

Ideas which state to go to before I talk with a lender; or can I talk to any lender located anywhere; so I can make multiple credit checks all at once when I talk to them.

Thank you, for reading. I look forward to your responses! 

Sounds like you’ve really put a lot of thought into your first step. These are important things to go over before you make your first purchase. Great work 👏 some things to consider:

You may need to have a larger down payment going non-owner occupied (potentially up to 25%). Some lenders have more favorable DP’s (potentially 10%) but but may have stricter requirements. As usual, talk to a lender!

I think house hacking to start with is the best way to hedge your capital and investment and scale quickly. Minimal down payment, barrier of entry is lower, and if you make a mistake (which all of us do), it's more forgiving. You can also use that income to help your DTI to qualify for more. I know it'll be hard to find a triplex/quadplex in Portland but prices become a little more favorable the farther down you go Portland HWY (Newberg, Sherwood, etc.).

If you decide to go out of state, you’ll need to build a strong team: contractors, property managers, lenders, and real estate agents/deal finders. You can build that team through biggerpockets! Just takes a lot of time and discernment. I got started out of state and almost lost it all (my fault, didn’t take the time to learn what I needed and ask the right questions like what you’re doing now). But definitely doable for anyone if you do it smart.

If you need a lender, I recommend @Grant Schroeder . He's helped a lot of investors and owns a good size portfolio in the area. I know he has a 0% down first time homebuyer product that has no PMI and a 10% nonowner occupied investment product.

Hope that helps! Let us know what you decide to do.

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Spring Ho
Replied Mar 31 2023, 07:10
Quote from @Lawrence Potts:
Quote from @Spring Ho:

Hello, 
After reading books( rich dad poor dad, etc) , and listening to BP, I've decided I really want to get my life on a path of financial freedom, and free of my restrictive parents. 

My goal is to have my first property I buy, to be a multifamily. My ideal goal is to buy a quadplex or triplex. If I truly can't find a good deal then I'd be okay settling for a duplex and wait the year to do the exchange and slowly build up my portfolio (I want to buy and hold my properties). One of my discouraging factor is that I don't make much to start with, and hope the real estate investing will help change that.

My question I have right now to start is, where should I go? I've read post that we don't need to look far, just from our backyard, but in Portland oregon the prices seem out of my reach. I know the very first step I should do is talk to a lender to better gauge what I can afford, but do I need to talk to a lender that is local to where I buy? Since I'm not sure if I want to invest in Portland oregon with how the prices are. I don't want to go out of portland/beaverton/hillsboro since the things I want near my property is ease of transportation, as I don't have a car.


What states would be good to start a multifamily where I can make some cash flow or at least break even so I can save for a downpayment for my next property?
 

I'm interested in doing short-term leasing in the units also for travel nurses/insurances, so a health focused area is nice too!

I'm a 25F so safety is a high priority for me as an individual, so states with high crime rate such as Ohio and Indiana is not appealing. But this is just based on research I've done on the internet, so any insight to help explain that I don't have to be as weary would be awesome if a location you are advising has concerns. 

I also would like the location to be a bit convenient for me to travel by transit 

States/areas I've looked into, but not sure if I should make the jump:

-Minnesota Minneapolis/St.Paul  ( heard rent is going down in these areas, and it's not landlord friendly either)

-Iowa Des moines

I have about 11k that I've saved up that I can put for a downpayment and 8k to cover closing cost; but if I can have the seller to pay that then it would help with any remodeling to help increase the properties value or I can use it to buy a cheap car that can get me to point A- B

TLDR:

Good states to start buying your first multifamily home?

-Low crime rate

-decent location that is accessible to reliable transit

-growing city (economy, jobs .etc)

Ideas which state to go to before I talk with a lender; or can I talk to any lender located anywhere; so I can make multiple credit checks all at once when I talk to them.

Thank you, for reading. I look forward to your responses! 

Sounds like you’ve really put a lot of thought into your first step. These are important things to go over before you make your first purchase. Great work 👏 some things to consider:

You may need to have a larger down payment going non-owner occupied (potentially up to 25%). Some lenders have more favorable DP’s (potentially 10%) but but may have stricter requirements. As usual, talk to a lender!

I think house hacking to start with is the best way to hedge your capital and investment and scale quickly. Minimal down payment, barrier of entry is lower, and if you make a mistake (which all of us do), it's more forgiving. You can also use that income to help your DTI to qualify for more. I know it'll be hard to find a triplex/quadplex in Portland but prices become a little more favorable the farther down you go Portland HWY (Newberg, Sherwood, etc.).

If you decide to go out of state, you’ll need to build a strong team: contractors, property managers, lenders, and real estate agents/deal finders. You can build that team through biggerpockets! Just takes a lot of time and discernment. I got started out of state and almost lost it all (my fault, didn’t take the time to learn what I needed and ask the right questions like what you’re doing now). But definitely doable for anyone if you do it smart.

If you need a lender, I recommend @Grant Schroeder . He's helped a lot of investors and owns a good size portfolio in the area. I know he has a 0% down first time homebuyer product that has no PMI and a 10% nonowner occupied investment product.

Hope that helps! Let us know what you decide to do.


This was my bad, I should have mentioned I'm definitely househacking by living in the other unit as a primary resident, and taking advantage of the 3.5% down; and then after 20% equity get that PMI off. Unless I find something I can do 5% for conventional.. which I think is likely unless out of state. Thanks for the lender recommendation!

Could I ask where you went out of state?

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Ryan Thomson#1 House Hacking Contributor
  • Real Estate Agent
  • Colorado Springs, CO
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Ryan Thomson#1 House Hacking Contributor
  • Real Estate Agent
  • Colorado Springs, CO
Replied Mar 31 2023, 07:30

@Spring Ho this was a lot of questions and challenges in one post. You are going to have a hard time finding someone who is going to do all of this research for you. I think you may need to take a step back and figure out your goals and challenges first. 

Challenges:

- no car - buy a cheap one if you need one

- low downpayment - look around your area for down payment assistance plans

- expensive area - may have to move

- not sure where to move - you'll have to do your own research on that and connect it to your goals and challenges. Pick a place you would want to live AND that you can afford. That seems like the two criteria to start with. I worry you are going to overwhelm yourself and never get started if you have all these extra criteria for a place to live. 

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Lawrence Potts
  • Real Estate Agent
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Lawrence Potts
  • Real Estate Agent
Replied Mar 31 2023, 07:44

@Spring Ho, I invested in Louisiana. Not because it was Top 10 places to invest in a google search or on a BP YouTube video or podcast. It was because I had people there for my team. Riches are in the niches. It made sense at the time because I knew the area, I had team members in place, and I could take action. I failed because I didn’t know what I didn’t know and didn’t manage well, to name a few. If I knew then what I know now, I would have stayed and would have been fine. But that’s 20/20, and I’m better for it by taking action and learning. If you decide to go out of state, have a reason outside of because someone on a podcast is doing well or because it’s cheap. 

I will second @Ryan Thomson, there’s a lot that you went over in this post that is a lot to take in and is a visual that you have thought a lot but are also all over the place. You’ve definitely considered a lot of possibilities and you want to make sure you make the most optimal decision. However, action is sometimes more important than waiting too long to make the best decision.

It may be worth it to stay in your backyard even if it’s an expensive market. I know the Portland and suburbs of Portland and there are pockets that you can do well in and are incredibly safe. For example: McMinnville and Newberg are some of the safest areas in the entire state. It’s a commute from Portland metro but I know some that commute from Woodburn, Salem, and beyond to work in Wilsonville, Clackamas, etc. Because it’s cheaper to live there. But the cost of that is sometimes time (commute to work, etc.). Get your transportation in order and start with a safe house hack.

Your ideas are good, maybe just tackle one at a time. Start with the path of least resistant and become the person you need to be in order to take on the bigger steps. Sometimes that will require education, or experience, time, or money. But do the things you need to get there and then make that move. Hope that helps clarify things for you.

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Jimmy Lieu
  • Real Estate Agent
  • Columbus, OH
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Jimmy Lieu
  • Real Estate Agent
  • Columbus, OH
Replied Mar 31 2023, 08:38
Quote from @Spring Ho:

Hello, 
After reading books( rich dad poor dad, etc) , and listening to BP, I've decided I really want to get my life on a path of financial freedom, and free of my restrictive parents. 

My goal is to have my first property I buy, to be a multifamily. My ideal goal is to buy a quadplex or triplex. If I truly can't find a good deal then I'd be okay settling for a duplex and wait the year to do the exchange and slowly build up my portfolio (I want to buy and hold my properties). One of my discouraging factor is that I don't make much to start with, and hope the real estate investing will help change that.

My question I have right now to start is, where should I go? I've read post that we don't need to look far, just from our backyard, but in Portland oregon the prices seem out of my reach. I know the very first step I should do is talk to a lender to better gauge what I can afford, but do I need to talk to a lender that is local to where I buy? Since I'm not sure if I want to invest in Portland oregon with how the prices are. I don't want to go out of portland/beaverton/hillsboro since the things I want near my property is ease of transportation, as I don't have a car.


What states would be good to start a multifamily where I can make some cash flow or at least break even so I can save for a downpayment for my next property?
 

I'm interested in doing short-term leasing in the units also for travel nurses/insurances, so a health focused area is nice too!

I'm a 25F so safety is a high priority for me as an individual, so states with high crime rate such as Ohio and Indiana is not appealing. But this is just based on research I've done on the internet, so any insight to help explain that I don't have to be as weary would be awesome if a location you are advising has concerns. 

I also would like the location to be a bit convenient for me to travel by transit 

States/areas I've looked into, but not sure if I should make the jump:

-Minnesota Minneapolis/St.Paul  ( heard rent is going down in these areas, and it's not landlord friendly either)

-Iowa Des moines

I have about 11k that I've saved up that I can put for a downpayment and 8k to cover closing cost; but if I can have the seller to pay that then it would help with any remodeling to help increase the properties value or I can use it to buy a cheap car that can get me to point A- B

TLDR:

Good states to start buying your first multifamily home?

-Low crime rate

-decent location that is accessible to reliable transit

-growing city (economy, jobs .etc)

Ideas which state to go to before I talk with a lender; or can I talk to any lender located anywhere; so I can make multiple credit checks all at once when I talk to them.

Thank you, for reading. I look forward to your responses! 

Hey Spring, I'm actually from Portland, Oregon as well and can really relate with your story because prices in Portland Oregon were way too high for me to find cash flow so I decided to find a new real estate market with better opportunity cost. I was always big into financial freedom and hence why I moved to Columbus, Ohio to do full time real estate investing and ever since, have built a successful portfolio and have done everything from BRRRRs to flips. However, I do disagree with your point about Ohio having a lot of crime. Here in Columbus, Ohio, it's a super hot real estate market, the rent to price ratio is still really good and there's still many 1% deals here that are getting positive cash flow. Intel, Honda, Amazon, Nationwide, Wexner Medical, etc. and many more employers are moving here, so tons of job and population growth catalysts. As an investor and agent here in Columbus Ohio, if you have any questions, I am more than happy to connect!

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Spring Ho
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Spring Ho
Replied Mar 31 2023, 09:24
Quote from @Ryan Thomson:

@Spring Ho this was a lot of questions and challenges in one post. You are going to have a hard time finding someone who is going to do all of this research for you. I think you may need to take a step back and figure out your goals and challenges first. 

Challenges:

- no car - buy a cheap one if you need one

- low downpayment - look around your area for down payment assistance plans

- expensive area - may have to move

- not sure where to move - you'll have to do your own research on that and connect it to your goals and challenges. Pick a place you would want to live AND that you can afford. That seems like the two criteria to start with. I worry you are going to overwhelm yourself and never get started if you have all these extra criteria for a place to live. 


 Thank you for the response I appreciate it a lot, I didn't think of it that way that some of my criteria is caused by challenges I'm currently facing, that's helping me think a bit differently

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Spring Ho
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Spring Ho
Replied Mar 31 2023, 09:27
Quote from @Lawrence Potts:

@Spring Ho, I invested in Louisiana. Not because it was Top 10 places to invest in a google search or on a BP YouTube video or podcast. It was because I had people there for my team. Riches are in the niches. It made sense at the time because I knew the area, I had team members in place, and I could take action. I failed because I didn’t know what I didn’t know and didn’t manage well, to name a few. If I knew then what I know now, I would have stayed and would have been fine. But that’s 20/20, and I’m better for it by taking action and learning. If you decide to go out of state, have a reason outside of because someone on a podcast is doing well or because it’s cheap. 

I will second @Ryan Thomson, there’s a lot that you went over in this post that is a lot to take in and is a visual that you have thought a lot but are also all over the place. You’ve definitely considered a lot of possibilities and you want to make sure you make the most optimal decision. However, action is sometimes more important than waiting too long to make the best decision.

It may be worth it to stay in your backyard even if it’s an expensive market. I know the Portland and suburbs of Portland and there are pockets that you can do well in and are incredibly safe. For example: McMinnville and Newberg are some of the safest areas in the entire state. It’s a commute from Portland metro but I know some that commute from Woodburn, Salem, and beyond to work in Wilsonville, Clackamas, etc. Because it’s cheaper to live there. But the cost of that is sometimes time (commute to work, etc.). Get your transportation in order and start with a safe house hack.

Your ideas are good, maybe just tackle one at a time. Start with the path of least resistant and become the person you need to be in order to take on the bigger steps. Sometimes that will require education, or experience, time, or money. But do the things you need to get there and then make that move. Hope that helps clarify things for you.


 That makes sense! I'm trying to find a team or a group of network, but I guess I am getting overwhelmed that I don't even know which area I want to target yet; which I really need to figure out so I can network with the right people in those areas. Thank you for your response, I like that idea of just tackling things one at a time

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Jay Thomas
  • Real Estate Agent
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Jay Thomas
  • Real Estate Agent
Replied Mar 31 2023, 10:46

It's important to remember that real estate investments come with considerable risks, so make sure you save enough capital before diving into this market. It's also smart to research and study up on the trends in the market before committing to any big investments. With proper planning and caution, you can find success in real estate investment!

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Travis Norris
  • Investor
  • Las Vegas, NV
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Travis Norris
  • Investor
  • Las Vegas, NV
Replied Mar 31 2023, 11:30
Quote from @Lawrence Potts:
I got started out of state and almost lost it all (my fault, didn’t take the time to learn what I needed and ask the right questions like what you’re doing now). But definitely doable for anyone if you do it smart.

Hi @Lawrence Potts!

I'm looking to invest out of state. Knowing what you know now, what advice would you give me as someone that is starting out? What would you recommend I learn before purchasing my first out of state rental property?

I ask because I feel like I am being rushed into buying a rental property already, but I feel like I haven't done enough due diligence (I feel like I can never do enough due diligence, so who knows if what I researched is "enough"). I've researched a lot of cities, and am leaning towards investing in a duplex in Cleveland. I have connected with a lot of agents in the area, and have talked with them on the phone, and feel like I am ready to buy.

Would love to hear your thoughts!
 

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Lawrence Potts
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Lawrence Potts
  • Real Estate Agent
Replied Mar 31 2023, 13:54
Quote from @Travis Norris:
Quote from @Lawrence Potts:
I got started out of state and almost lost it all (my fault, didn’t take the time to learn what I needed and ask the right questions like what you’re doing now). But definitely doable for anyone if you do it smart.

Hi @Lawrence Potts!

I'm looking to invest out of state. Knowing what you know now, what advice would you give me as someone that is starting out? What would you recommend I learn before purchasing my first out of state rental property?

I ask because I feel like I am being rushed into buying a rental property already, but I feel like I haven't done enough due diligence (I feel like I can never do enough due diligence, so who knows if what I researched is "enough"). I've researched a lot of cities, and am leaning towards investing in a duplex in Cleveland. I have connected with a lot of agents in the area, and have talked with them on the phone, and feel like I am ready to buy.

Would love to hear your thoughts!
 

Would love to share. Shoot me a DM

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Tysson Dykes
  • Investor
  • Longview, Wa
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Tysson Dykes
  • Investor
  • Longview, Wa
Replied Apr 23 2023, 11:25

Being new to the space and having the money that you do...out of state is going to be really difficult.

One option you could use is stay local at least to start. This does not have to mean down the road. I had a nurse right around your age a few years ago considering the same thing.

She opted to take the long commute to Portland and actually invest in a duplex up near where I do business ( Longview, Wa ). She worked at OHSU and the drive wasn't the best. It did allow her to owner occupy the property, get into it with less down and the tenant on the other side made her living expenses very attractive. Two years later she was able to do it again but with a conventional 5% down. I think she stayed there for about 6 months doing some cosmetic work and then was able to move close to her work having 4 doors and decent cash flow.

Between the two properties I believe she was all in for around $20K. My point is I suppose that had she gone direct out of state there would be now way she could have pulled that off given the cash she had at the time. Its a point worth considering.

Would love to connect if I can help in anyway!