Wissam Francis: Yes. So, I mean, the way we think about it is expenses are roughly divided half between what we say are non-controllable, so that would be property tax and insurance and then the other half is controllable. And so what we think is on the non-controllable property tax and insurance, that’s going to be up high-single digits. We think our property tax is going to be up roughly 8%. And the same-home insurance probably up about 10%, which is a pretty good, compared to what we’re seeing in the industry and certainly a moderation from 2022. And then on the controllables we’re thinking mid-single-digits. So that gets you to kind of that 6% to 7.5%. We feel pretty confident about that today.
Adam Kramer: Great. Thanks again for the time guys.
Gary Berman: Thank you.
Operator: Your next question comes from the line of Stephen MacLeod from BMO Capital Markets. Your line is open.
Stephen MacLeod: Thank you. Good morning, guys.
Gary Berman: Hi, Steve.
Stephen MacLeod: Lots of great colors, so thank you. Just wanted to ask about one thing, with respect to the acquisition plan for 2023. You’ve talked a little bit about potentially being able to adjust the loan to value in order to accelerate on the SFR acquisition side. I guess, two questions on that. What sort of factors that you take into account as you think about adjusting the loan to value? And then secondly, are there any other levers that you can pull just outside of the spreads to drive potentially higher acquisitions?
Gary Berman: Well, we’re govern right now by the existing joint ventures, right? Again single-family rental JV-2 and Homebuilder Direct and both of those have leveraged requirement. So, we are governed by those requirements, we’re typically around 60%. So that does put a bit of limiter, because if we got rid of that leverage we could go way faster. So again, I think, when I mean my comments about our JV partners being open or being agnostic to leverage and potentially considering a vehicle in the future that has lower leverage, that’s on future vehicles, it’s not on the existing vehicles. So those existing vehicles need to be about 60% and that’s really what’s kind of holding us back a little bit, is because at 60% the cost of leverage is in that kind of high 5% range, which is what Wissam talked about.
So that’s why it’s probably going to be a slower year. We’re planning 400 acquisitions in Q1 and we probably move that, let’s say, if we wanted to go to mid-point we could assume that 400 Q1, 1,000 Q2, 1,000 Q3, 600 — I’m just giving you an idea of what that could look like. And to the extent, obviously that we get a lower rates or lower spreads, we were able to go faster.
Stephen MacLeod: Great. Okay. Thanks. Really that’s helpful. That’s all I have. Thank you.
Gary Berman: Okay.
Operator: Your next question comes from the line of Jade Rahmani from KBW. Your line is open.
Jade Rahmani: Thank you very much. With the spike in rate that may call into question some of the green shoots that you are seeing in the — little market. I realize spreads might be coming in, but I am concerned about spiking fixed income volatility here. But the backdrop rise is a broader question, which is with acquisition cap rates right on top of that cost. What’s really the value of leverage in your views? Is it to really just gain scale in markets where there is an opportunity? Have you rethought that, because I think it could make sense to operate with much lower leverage than historically until the debt markets become more amenable.
