Episode 88 - Losers are Winners: Brad Leavitt on What Happens When Scope Explodes & Deadlines Don't Move
Episode #88 | Losers Are Winners | Brad Leavitt on What Happens When Scope Explodes & Deadlines Don't Move
Brad Leavitt of AFT Construction is back on the podcast, and this time he's serving up a fresh, still-stinging loss that proves even the best builders can forget their own rules. Mark and Brad dig into what happens when scope explodes, timelines collapse, and a superintendent has to get swapped out two weeks before a move-in that was never going to happen anyway. It's messy, it's honest, and it's the kind of conversation that might just save your next project — or at least make you feel better about your last one.
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The host of the Curious Builder Posdast is Mark D. Williams, the founder of Mark D. Williams Custom Homes Inc. They are an award-winning Twin Cities-based home builder, creating quality custom homes and remodels — one-of-a-kind dream homes of all styles and scopes. Whether you’re looking to reimagine your current space or start fresh with a new construction, we build homes that reflect how you live your everyday life.
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Mark D. Williams 00:00
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and beyond, please consider contractor coalition, amazing people, incredible builders from all around the country. We are coming up on May 1 through the fourth in Denver, Colorado, on Friday, which is the opening kickoff of that event, we are going to do a tour of a construction instructions warehouse and their whole facility where they test products from all over the world, in Colorado and Denver. We're also going to do a tour of alder view constructions, beautiful homes while we're there. And then that evening, we will kick off the event for Denver, that is May 1 through the fourth. Then our second event of the year will be a one day Crash Course. Will be September 15 in Minneapolis, Minnesota. This is really meant to be a much abbreviated version, but obviously at a much lower cost. And then our last three, four day event of the year will be in Charlotte, North Carolina on November 6. For all the details, please head to contractor coalition summit.com you
Brad Leavitt 01:02
so you're coming home Ian from home or working in your office, and people are, you know, cutting on the wet saw. I mean. So here's the thing is, we have protocol for a reason, and as as understanding as a client may or may not have been, you still have to hold your guts, and we did not do the next case and and now we're paying the price for it. Mark,
Mark D. Williams 01:24
welcome
Mark D. Williams 01:27
to curious builder Podcast. I'm Mark Williams, your host. We're going back old school OG we got Brad Levitt down in Phoenix, Arizona. What's up, buddy? What's up? Mr. Mark, I haven't count you're either at four or five times. It's like, I just saw the other day that Jack Black was on Saturday Night Live. He was like, one of the first time, five time guests. I'm gonna have to start doing like, you know, the number of guests like you and Morgan Molitor, I think, are probably vying for a top spot here, at least, but I get the original claim to fame you started your podcast. I agree that's mine. It's true you, for sure, you're the OG that's at least a factor a power of two. Well, today is Thursday's episode. We're gonna do a losers or winners 20 minute segment. Minute segment on basically, you know, some big losses that we've learned from and it's fun because you and I get to see each other in like, just a week May 1. We're already coming into Denver, Colorado for a contractor coalition Summit. Can't wait. I mean, it's coming up fast. I know I was trying to get there early with you so we could have a little bit more extra time, but that Summit's so fun. I actually just had Trapper on my podcast, and I know he's been on yours, and came to Summit, and we have a few new people, even from Phoenix, coming and I don't know that community of the coalition Summit is something else, from the builder show to things you guys are doing all of us. I mean, the community has grown so much. It's so fun. Anyone that isn't going they're missing out big time. Well, what's amazing about it is it's been, it feels like forever, but it's only been four years. I know four years ago right now, Brad, the first time you and I ever met was when I went to Nashville. And I think of how much my business, my career, I mean so many things in my life, personal life as well have all changed through the friendships, the connections. And you know, regardless of what your path is, I think what's so unique about what you know you and Morgan and Nick started, was really just being the first ambassadors of collaboration over competition, and now it's like, if you're not, if that's not the bumper sticker on your business, like you are, that is like you you're being left in the dust. Yeah, I don't know. It's so true though. I mean, it's only been four years, and you think, how many attendees have come, how their business has multiplied, their networks have expanded. You know, I want to tell Orlando, you know, it's with you in Orlando, the, you know, the builder show Cabe is IBS and, like, it's like 50 alumni speaking events, you know, at the booth with different vendors. And it's not just about that, but the community has just grown. And you see these, these vendors and suppliers that are just hungry for for talent and network and, you know, to build the community. And it's just, you know, construction is tough, like, the more, you know, allies you have, it just makes it a lot easier to fight some of these battles that I'm sure we'll talk about today, because I probably have 5000 I could share. So, yeah, well, I'll put the link below. I mean, people hear me talk about it sitting all my ad reads. But you know, if you've still got time come to Denver, we'll also be doing our first one day course in Minneapolis, September 15, which is kind of a Tyler's brainchild. I'm really excited to see how that shapes up. And then, of course, Charlotte is in November. So if you miss out on Denver, which is, I think we've only got a handful of tickets left, I think we're pushing 3035, builders, and we try to cap it right around there, that just that intimate setting is so special. But this isn't meant to be a contractor coalition plug, which is fine. Happy to do that. Let's dive into, you know, like any business person and entrepreneur, losers are winners. I mean, so what have you got? I'm a loser again, dude, I was such a loser. Man,
Brad Leavitt 04:39
I thought I was past that, that high school is done. Man. So round two, being a loser. It's funny because, you know, they always say the definition of insanity is doing the same thing and expect a different result. I learned a painful lesson. This was, oh man. This would have been, you know, seven, eight years ago. O for a high list Hollywood celeb. A lot of people know who this person is, so I'm not going to reveal their name, and it was one of those projects that we were brought in. Bottom line is, there was a big insurance claim right house flooded. They had to rebuild it. We came in, and their goal was to be in by Christmas. As we know, like there's tight timelines to get someone in by the holidays, which is typically not my favorite anyways. And so as we're kind of leading up to this, the plan was to start roughly in February, give us 10 months to do the rebuild. It was going to be fine, you know, we're going to make it work. It'd been tight. We'd make it work. But as what's typically happens, you know, insurance is drawn out the, you know, the legalities of it, getting the check, getting approval, because what the bank or what the insurance is appraising to what the actual cost of construction don't line up. I mean, anyone that's been through that understands this, so we didn't get started to like, May, so now you're like, already behind the clock. So we're just like, we're gonna hit it. We're gonna hit it. And what I realized is, like, trying to make someone happy is always the worst response ever. Because if I would have just sat there in May or June or August and said, Look, Mark, there's no chance when we done December, let's figure out a different place you're going to celebrate the holiday March, you know, they're going to be really upset. They're going to but they can pivot, you know, but now, when you get into December and their lease is up and they have nowhere to stay, or their VRBO or wherever, and their kids and they're expecting Christmas, and you're not done, you're not done. I mean, it just becomes, you know, now you got you're in the crosshairs. And this client yelled at anyone that knows Mike with ECS. Mike with ECS, out in Jersey, happened to be out visiting me, and the client called me. He's like, I've never heard a client talk to something like that, like he's literally just light me up. And he just realized, when I was trying to be the hero, you end up becoming the zero, and it just sets you up for the wrong course. And I'll talk about how that leads into it, because I'm sure you want to say something, but yeah, it just, you know, it's that over commitment, under delivering, that leaves a painful test, you know, painful taste in their mouth, instead of just, you know, being upfront from the beginning.
Mark D. Williams 06:58
No, I mean, it's, I just did last week's episode was literally what just happened. But I actually you shared that story the first time I ever met you in Nashville, and it was, it's, I think that's what's been so valuable and helpful about this series. It reminds us that you'd like to think that you don't have to learn the same mistake again. The problem like, I'm not done, oh yeah, that's the problem. It's almost too easy. All right, what you got for round two there?
Brad Leavitt 07:25
So round two. So here's kind of that, and I'm going to move to the whole point of bringing up that kind of setting the table, if you will, for today. What's funny about that experience is one of the attendees who, you know, Nathan, knew who this was, because he's like, Yeah, this client. I anyways, the cool thing is, fast forward a few years later. So about a year and a half ago, this client and his wife reached out to me, and they're like, Brad, you're the best builder on Instagram. We've been through like, five different builds since then, different experiences, and although it didn't go as planned at the end, you know, we didn't get in, they're like, We admire you. So that's the silver lining. However, I don't know if that's going to happen this round for me. So bottom line is we have, you know, and it's the same thing. And I don't know how we made the same mistake, but we we have a large project. It's a massive renovation. I mean, massive renovation. And the original plan was to do a small scale, like they tend to be. We just want to do X, and all sudden, the scope goes to y, and that's fine. We can do it. We're capable like we're on board. It just got out of hand from the entire design team, us as the building team, the client. So the scope really ended up being, like 7x like seven times what it was going to be. But the problem is that closing date still didn't change. And what happened was, you know, here we are now. The client's supposed to be moving in right now, and the house isn't ready. It's just not ready. And not only is it not ready, but it's not aft quality, ready, which we pride ourselves in, you know, having a complete home and finished. And so now here I am, clients upset they're getting into with my superintendent. I have to remove my superintendent two weeks ago, put a different one on which I rarely ever do. But you think about bringing in a new super two weeks before a house that's has 0% chance of finishing, and the client's frustrated now you're fighting over, you know, I'm paying, I offered to pay them additional costs, you know, to put them in temporary housing because their lease is up. And I'm like, we should have just, what are we doing? Like, we learned this lesson seven, eight years ago in November, December, and really, where I say losers and winners, we just sat down last week and we said, we know this. We need to put on paper. And what I mean by that is for us in our market and other people might think that's crazy, but anyone that falls aft and understands the scale of our homes can understand we have these milestones mark if I don't have cabinetry in by April. I mean, typically I tell clients, you're six months from cabinetry. It might be eight months, depending on size of house, but it's not sooner than six. And some people are like, what, once I have cabinetry? I'm like, 90 days and I'm like, No, I they never. They see
Mark D. Williams 09:55
the visual. And they can now start seeing the space where, before it was framing or sheetrock, they see that. Beautiful cabinet moment. Never mind that cabinets might take three to six weeks to install, depending on how complicated it might be.
Brad Leavitt 10:07
No, it's a great point. And so I think a lot of builders use a milestone at drywall, six months from drywall, you're going to have CFO. I have taken the stance that it's six months. You know, again, it can vary, but it's always minimum six months from cabinetry completion. Had I done that when we're installing cabinetry in December and followed my sop? Yes, the client probably would have been really upset that we're not done April 1, you know, but the reality is, at least I could have went to him and said, This is how it is, like I already know we're going to be here. Hate me now, but, you know, I'd rather June is going to be realistic. And we could have, we could have hit this in June. And I think what happens for us as builders is we're trying to be the hero too often. We think we can do it. You think you can squish all the scope in a minimal amount of time. And what ends up happening, just like here, clients upset trades are walking off the job. Have to switch supers now it's total tension. There was going to be a huge phase two. I don't know if I'm going to get phase two. So now it's interrupting my entire business, and it's kind of a sad tale to and, you know, it's funny. I'm sharing this on the podcast because, you know, I'm pretty vulnerable and open person, as you know, Mark. But you know, I would say, you know, 9090 95 99% of our projects go great. I have great relationships with my clients. But you know what? This one is a failure on all levels. And I think at the end of the day, I could point the finger at a lot of other elements that are involved, but we're responsible, we're the quarterback, and we didn't communicate.
Mark D. Williams 11:33
Yeah, there's a lot of lessons in there. I mean, it's funny too, because you'd mentioned something that I think we can all relate to about anytime we've we invalidate our own SOPs. I mean, I had a similar experience where, you know, I'm building my Misa, who's project, and I don't have a client, and everyone tells me how great building a spec home is. It's the best thing ever. You don't have a client. Oh, man, I got news for you. I think I've worked 10 times harder on this house than I have for any client. A lot of it is because my own expectations, and I am, you know, your own critic, because you want this to be perfect. But my point was that, just a real quick tangent to that is I changed my sop because we didn't have a client. We changed how we operated. I gave the designer, who's super talented, but it was unfair to her. I gave her a five to one veto power. So I Ian. I didn't plan on this, but I made her the GC, super talented designer. Was not fair for her to also be the GC. It led to confusion, to the subs. It led the only I've met. I apologize many times on air about this, but it was only just the fact that, like, I was having a great time, like I love what was happening. And everyone else, the subs, were pissed. The designers were upset, the architect, everyone was upset, except for me, because I just thought, because I just thought I'm the best boss ever. I gave everyone, but the end of the day, what they really wanted was for me to be the captain of my own ship. And so I apologize to everyone. I set out a huge mea culpa, saying it's my fault, please, you know, and in some ways, these moments sort of also validate the people on your team that roll up the sleeves and when it's really dirty and really muddy and messy and painful, they're working nights, they're working weekends, which we don't want to do. I don't want to set up my business to ask people for favors, but man, man, am I thankful for people who are willing because of the loyalty as owners that we have extended to our own team and to our subs when they are called upon, it that they man, you find out real quick where loyalties go beyond just a contract. And I think I suspect you'll find that because they know you're in a tough situation. And yeah, it might have been your fault or your team's fault, but like at the end of the day, I suspect this client will, they'll get over it eventually. It might take some time, might take six months, might take a year, and you might not get that job, but they will respect you for the work that you do. Because no matter what, if you can't, you do have to have the conversation. They can't move into the house until it's aft ready, and if it's not aft ready, whatever that might mean. I'm sorry, it's kind of like the doctor report. Like, I don't want to tell you that it's stage four cancer, but it is now from here on out, here is the treatments, and I think the sooner you rip off the band aid. Have you had that conversation with the client yet or not? Yeah.
Brad Leavitt 14:08
So before I answer that, what are you doing with the stress ball, dude? Am I stressing out that?
14:13
Did you see you knew I had it? Yeah.
Brad Leavitt 14:14
How did you know I had it? Because what's funny is my kids were literally fighting over that this morning. They have the same one. What's that called? Again? What is this call I give?
Mark D. Williams 14:25
My kids have, like, six of them needle, and they're so fun to play with, so I keep it in the studio. And I had I interviewed someone, because I do a lot of mine in person, and I was playing with it the whole time, because it's just something to do. You wiggle your foot. Evidently, I'm like, just doing this. And with this neato,
Brad Leavitt 14:39
my kids can't find a needle, Mom, what is a Neato. And then they grab that this literally was this morning before school. Is classic, though, buddy has the kids.
Mark D. Williams 14:52
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Brad Leavitt 15:44
All right, so he, you know, this is where, this is where it's layered. Because I think, you know, to give a little context of zero sharing that Mark, I mean, there's a little more context to this. It wasn't as cut and dry of us just trying to shove in, you know, six months, even though that's a huge element. But what happened was, along the way, the clients, like I get it. We're adding scope. I mean, they're very understanding, like, we know we're changing things you're not going to finish, but keep in mind, we just need to get in there. You can be in there working after we move in, it's going to be fine. We're gone, you know, every weekend.
16:12
We're gone every weekend. Well, gee thanks.
Brad Leavitt 16:14
Yeah, we're got, we're out of time a lot. You know, we're gone for the summer. So there's, they knew there were going to be lights, slabs. I mean, this, this was communicated from the designer, notwithstanding all this stuff, you know, you know the, hey, we're in the amicable. You can work around the scenes. Here's the reality. There's best practice, there's communication, there's reality. You can tell me that it's fine that I'm in your house. But when you're trying to get kids to school and you're trying to have dinner and cook, and you're, you're running through the operation of life, and you got contractors knocking on your door 6am every day on a school day, like, I don't want, I mean, I'm trying to get my kids to school. I don't need someone in my house right now. And, you know, I come home, so you're coming home Ian from home, or working in your office, and people are, you know, cutting on the wet saw. I mean, so here's the thing. Is, we have protocol for a reason, and as as understanding as a client may or may not have been, you still have to hold your guns, and we did not do the next case and and now we're paying the price for it.
Mark D. Williams 17:11
What will you do? You do a It's funny how often you have to read. It's like scars, you know? How often do you I was actually thinking the other day about this losers or winners, which I still like the title, but I just thought of one the other day, like the story of the scar. My kids the other day asked I have a scar on my hand where I as a teenager, I accidentally stabbed myself with a knife while I was whittling some wood, yeah? And it's a pretty big scar, yeah, exactly right. And, but like, then nobody asks you about the unblemished skin. You're called to attention of the scar, the thing that sort of defines our Mars of the surface, but those lessons, they stick with you. It'll be interesting to see. I mean, the mistake has been made, and you know it. And we're not perfect. We do read, you know. And there's other things in our life. I mean, you know, we have personal things that we're juggling. We have our businesses expanding, and it's easy for a client. I think that's why I know you do this too. I try to humanize the situation as much as Ian, and you're a phenomenal humanizer. I think, I think it's a reason why a lot of people gravitate towards aft, into you specifically. And I think the more like, like, for instance, are you still staying with every six months you have dinner with these people?
Brad Leavitt 18:17
Yeah, we, I am doing that. And I will say the human the one silver lining is we've had numerous commerce conversations on the phone, and part of the reason that led to the superintendent switches, I told the clients, I said, Look, everyone's an extension of me. And they called me back and they said we thought about that comment, and because, you know, I'm very calm like, look, I Ian get riled up. I always tell people, don't confuse my kindness or weakness, and I can lose it, like all of us can. But, you know, I think in most cases, I'm not worried about who's right. I'm worried about getting it right and whether I had in my arsenal 50 reasons why it's not our fault. None of that's relevant. We have this problem. We're trying to get it done. And so when that client called, you know, I even tempered and, you know, let them speak and hear them out. And said, Okay, well, let's problem solve. Can we get an extra 10 days? Can I pay for that? And then when they called me, I said, Hey, I, you know, I don't speak to you that way. If so and so spec spoke to you, we're going to make a switch. And we did, and going back to learning lesson, if you will, on all this is even though we made that same mistake. You know Paul, who a lot of people know that works with me. He says one thing about Brad is he knows we're all going to make mistakes, and we do, but where he gets frustrated is if you're making that same mistake again. And so you know one thing we're going to do in our production meeting that we do regular is really sit down and go through these milestones, like guys as we're communicating closing dates we do have in our contract, which I speak about at the summit, shameless plug here, but I will speak, and do speak about a proper way to when the client can move in, when they're actually allowed to get their keys, and it's in their contract, and it's not dictated by CFO, and I'll just leave that care dangled out there. And the reason we do that because it does allow us to have an aft finished home, and then allows us to finish in that proper order. Ian. And if you deviate from that, and that's where we can just train everyone. Here's the communication, here's the red flags, here's the conversations. Like, we don't want a homeowner moving in early we don't want them, even if it's life circumstances, life or death out there. You know, there's a reason. And unless we're as a board, a member of leadership group, agreeing to this, you know, we can't just go rogue, and I agree, or Spencer does, or our field team like this has to be unanimous that everyone's on board, no different than I'm picking natural stone and the natural stones like you're gonna sign this affidavit or waiver disclaimer that, hey, it's natural stone. It may not look like the stone you got, but at least you're aware of what we're doing here. That was funny
Mark D. Williams 20:37
to bring that up. And I Nashville four years ago, you shared that, how you do that, and I was in the middle of a client, because we've all had it, and somewhat another builder here locally in Minnesota had shared this. I think it was Sven Gustafson from Stonewood. He shared this thought that if you because he had a similar protocol to you, that basically, from the day of CO there's X number of days got to come to contractor coalition to find out how many of those are. But the point we were writing, we rewrote it in our contract too, and I put it on my builder trend schedule so that they can see it. And I tell them, you know, if you are attracted to us because of the quality and of the enjoyment of the process that our past clients have had, and we're not perfect, but if you're going to have the best journey. This is how it is. It'd be a little bit like, actually, that's a great analogy for an airplane. Can you imagine if, like, rather than like, you know, they say, Hey, everyone put their seatbelts on. We're gonna be touching down the next 20 minutes, and, you like, slowly descend all the way down. Everyone knows what's happening. Can you imagine if they were, like, they flew over the city, like, and we're landing, it was just like, a straight, vertical drop. That's crazy. And yet, we've, I did that for 18 years. Like, the like, we would meet on a Monday, we, yeah, I crash landed every single job I did, and somehow we got through it. But like, it would be a Monday, we'd have, we'd meet the client, we'd have four days to do whatever was on this crazy punch list. They'd move in on a Friday. They'd damage the house, then we spent the next six months. This is what Sven used to say, is like, you would spend six months to do two weeks of work, because if I have to go around little Johnny's, you know, pickup schedule and and your work schedule, and when you're home and when you're not home, and forget the inconvenience, but just actually getting into the house, plus the subs, they can't just, it's not everyone gets annoyed at like, hey, that service deck is going to show up at your house between 10 o'clock and 5pm you're like, Well, how in the world am I? And guess what? They'd never show up in that window anyway. And so it's like, we can't do that. So how about we all have a better life? You stay out of the house for X number more days, and we get all of these things done. You move in anything now is on warranty, we'll handle it at the one year. And we're so glad you get to move into your beautiful new home, and as soon as we instituted that, the thing is, we told the client a year ahead of time and a year that's the magic. You cannot do this mid flow. It has to start on day one. And you're 100% right. You have saved me so much heartache and headache. Not that client that, not that that doesn't move, but that has been a kind of a shield. I just say, hey, that's how we operate. And as soon as we believe it, then the client
Brad Leavitt 23:03
will too well. While you live in every stereotype, tell Sven, I love him, but you lived in the frozen tundra, and you have a friend named Sven. Was it frozen? Back on track? Back on track? And that was the comment we had. We had a precom meeting, and you know, Corey brought up a point. He said, Look, Brad, and not just Brad, but we were kind of speaking as a leadership team. And so often, when it's the groundbreaking, we're all pumped. We get out there on side, we have a groundbreaking, you know, put a shovel in the ground. Everyone's pumped. And then you get to the end, and like you said, it's crash landing. What are we doing? And to your point, what we realized is, if we have a closing process similar to our pre construction checklist before we start a project. Well now we have a checklist to completion, and one of that checklist is mandatory in the contract that, yes, we have CFO, and the clients have so many hours after CFO to come do their punch and do the punch walk, and then we have so many days after that to finish that, and so that way you're not fighting the client moving in with the house not ready. And then the client in the home saying, hey, well, this warranty is now bleeding into punch, which is bleeding back and forth, and I don't want to pay your last check, and there's no clear definition, and it starts getting really muddy. Yeah, I was
Mark D. Williams 24:11
just gonna make one final joke, and then we'll end it. It's like the highest thing, your soil is so hard, the golden shovels that you give your clients. I mean, you know that? How many shovels Have you broken you can't dig anything in Arizona.
Brad Leavitt 24:22
Listen, these groundbreakings are hilarious.
Mark D. Williams 24:25
Why don't you just do like a golden piece of dynamite and have some fun. We just
Brad Leavitt 24:28
need, like a bobcat or something like, they go out there and they literally hit the ground, and it's just like the little tip of the shovel will go and you'll flick like a little pebble. And luckily, at the last groundbreaking, they had a little wash. So when you have like, a wash, you know, like, flood zones here in Arizona, it's pretty Sandy, like, think of, like, sand in the bunker, yeah? So they went to this wash, and they were doing the wash because, if it's on the normal slab on grade, where the house would be, yeah, so we did this.
Mark D. Williams 24:51
It was because you're doing it for Instagram, right? You're doing it for a picture. Basically, it's obviously no one digs with golden shovels. But it was funny, because I had my team buy, so I. Because everyone's doing, like, Fine, we'll do this dumb thing. So I had I had him, I had him, I had him. Buy one, and we should, we shoved it in the ground. Like, the things are, like, Fisher Price the blade, like, just in Minnesota, we can actually dig in our ground. That's real dirt. We're real humans up here, and not much of GIA monsters. And so anyway, you stick the dump. I saw one of those at the zoo. By the way, I was at the San Diego Zoo last week, and I was gonna send you a picture of the Gila monster. I'm like, this is where like, this is where it belongs in a cage, not at your house, where it can bite you and kill you anyway, this dumb shovel just bends. And I'm like, What a joke.
Brad Leavitt 25:29
It is a Gila monster. Just so you know, Gila, Gila with a, H, yeah, let's it's G, i, l, a, but it's pronounced Gila.
Mark D. Williams 25:38
Well, Gila monster is how we pronounce it up here. Now, why don't you go ahead and Gila, out of here.
Brad Leavitt 25:45
You shove it all that snow this morning.
Mark D. Williams 25:47
Ah, you know nothing but sunshine here. Baby, curious builder, over and out. Thanks for coming in, Brad, thank you. That's what we call hard landing. That's like,
Brad Leavitt 25:57
that's a hard landing. Thanks
Mark D. Williams 26:02
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