And remember, we have a significant loss to lease in our portfolio, Mario, of at least 15%. So that has to be taken into account. And the only other data point I would give you is that, we sold nearly 300 homes in 2022, we’re planning to sell about 400 homes to a bit of capital recycling in 2023. We’ve got almost half of those already under contract, and those prices all about 10% above our fair value. So, the market is nowhere close to not only our book value, but where homes are actually trading in the market.
Mario Saric: Got it. Yes. So, the counter to the comment that you’re buying at 5.5% to 6% caps and you’re using a low 5% cap based on €˜23 expected NOI is really the 15% embedded mark to market in the portfolio?
Wissam Francis: Correct. Correct. And it’s probably a little higher than that, but yes, we’re using 15%.
Mario Saric: Got it. Okay. Thanks.
Operator: Your next question comes from the line of Brad Heffern from RBC Capital Markets. Your line is open.
Brad Heffern: Hey, good morning, everyone. Wissam, I was wondering if you could just talk through the funding plan for 2023, presumably, there is no equity but expected cash flow dispositions and that would be great.
Wissam Francis: Yes, no problem. There certainly is no equity at our current share price. So, if I look at what we need for going forward for 2023. Based on the guidance that we provided of buying 2,000 to 4,000 homes, assuming 60% LTV is pretty standard numbers. You’re looking at commitments for SFR between $80 million to $160 million on a full-year basis. On top of that, adjacent business is probably need about $50 million of funding and CapEx is probably another $40 million of funding. So in total, our cash flows and our need going forward is probably about $170 million to $250 million, depending on what side of the guidance you’re on. Now, where do we get that from? We get that from three different sources. Source number one is, our FFO less our dividends on a run rate basis, generates around $60 million of cash for us.
Source number two is, as Gary mentioned, we’re looking to probably sell around 400 homes in 2023, that’s probably going to gross proceeds of about $100 million. And let’s not forget that we have $207 million of cash on our balance sheet today and another $500 million of liquidity on our credit facility. So added altogether, we’re in pretty good position to take advantage of opportunities as they come up going forward.
Brad Heffern: Okay. I appreciate that. And then your comments on supply about kind of mom-and-pops renting out their existing homes because of the low locked-in mortgages. I’m curious how much you see that as really competing supply for you guys? And then how much do you think supply is being driven by build-to-rent and things that are more institutional?
Gary Berman: Kevin, you want to start with that and maybe I’ll chime in after.
Kevin Baldridge: Sure. We have seen supply come up for the obvious reasons, lot of people can’t sell their homes. But supply is still not what it was pre-pandemic. It’s clearly higher than it was during the pandemic, but it’s not higher than say 2019 and 2018 well. So I don’t really feel — our portfolio, well it’s out there, it’s not a big driver. I mean, a lot of the old mom-and-pops, maybe they don’t have the websites to review, they don’t have the maintenance teams that we do, they can’t advertise as much. And so it’s not — it hasn’t been a really big impact for us. And I think that some of the people that if they didn’t sell their home and they’re running it out, they had to go move somewhere. So they took some — another home off the market or some of the homes that they are now running would have been bought by other small investors or people like ourselves and would have come on the market anyway.
