AI Live - Land Shark Mastermind

if it doesn't work out. So that's why the LOI is our next step.

Yeah, that's smart. So I know Tommy is in a hole quite literally right now. Bless you. Bless you, Blake. So he should be coming on here any second. So why don't— while we're waiting for him, why don't you catch everybody up on this project? So everybody can hear what this is and what we're working through.

Yeah.

Okay. Yeah.

Super proud of you.

Sounds good. So there is a 19-acre property on the California coast in the Palisades, and it used to be a mobile home park that unfortunately got burned down by the Palisades Fire. So the sellers are trying to sell this plot of land for a significant amount of money. Selling it as a development opportunity for building hotels or building a resort or building mansions. However, they're not successful because the city is not allowing any sort of build other than a continuation of what used to be there. So that's why we decided to use a creative approach, and instead of rebuilding the typical mobile home. We want to create luxury mobile homes that are 2 stories and even have a rooftop deck with ocean views. So we're trying to get creative with it, and right now we're having conversations with the city and the county and the planning department and the housing department, um, to see how we can move forward. So I'd say that's my update. Does anybody have any questions?

Right. Yeah, we can go ahead with questions, but there's a few things I want to add to.

I have a question, Katya.

Go for it.

Hello, how are you?

I'm good. How about you?

Good. I've been hit or miss with the calls this week. Sorry about that. But that's a fascinating approach. Would the city still— I guess you don't know yet, but would they still consider it mobile home? Be than now. I know the big push, I'm sure, is affordable housing to keep it the mobile home park. Would it still be considered a mobile home with 2 stories? I never thought— I would never think of that.

Great idea.

We still need to confirm, but based on the conversations that we've had in the meetings we've had, they have— they don't have extremely strict guidelines as to what a mobile home is. So their priority is, as long as we meet the same amount of units that were there previously, then we can move forward. But that's not diving deep. So this is just surface-level meetings and communication that we've had with the city. So I think certain expectations, like if it has an axle, if it has wheels, like very basic, then it's considered a mobile home. But then you can get creative as to how it looks, the materials, and even the amount of levels.

Yeah, go, there's no height restrictions or anything like that.

No. And on the previous, the previous property, so before it was demolished by the fires, there were some mobile homes that were super old, and they were one story. And then there were some mobile homes that were huge because they were redeveloped, and they were built upon. So there were some two-story mobile homes before the fires, which is why we're using that to our advantage.

That's great. That helps, you know, because then you can go back and say, hey, look, they were there before. We're just replacing what was there.

Yeah, exactly.

Right. That's awesome. Are they, is there, are they prefabbed or are they just taking two mobile home trailers and putting on top of each other? I'm sure it's not that simple.

You know, we, we haven't necessarily discussed, at least I haven't, but I know that Catherine and Tommy, they have several visions and several businesses that they know right now that works with luxury tiny homes.

That's awesome.

So we're planning on bringing that in and incorporating it into the plans.

That's great.

Yeah, the luxury tiny homes are 2 stories, um, so that's a huge part of what's available as well. Just get with the configurations, it's quite fascinating. And then of course there's container homes, so there's multiple options, and I just, I find it— I'm glad that the city wants to leave this as affordable housing and as essentially a mobile home park, which is highly unusual, but they get that that's needed in this area.

100%, 100%, it is.

And what we're dealing with is, as always, the broker isn't being as upfront, or again, who knows, who knows where the breakdown is. But we found out that there's a potential class action lawsuit from the previous tenants. Is that right, Katya?

Yes. And the broker that I'm working with, he's very new and he's very young. And so I spoke with his partner yesterday and she was very much aware of the lawsuit and I sent her an email with follow-up questions. So she seems a little bit more knowledgeable of the political aspect of the property.

And it wasn't the city, the one that told us about the lawsuit?

Yes.

And the broker said, no, no, no, there's nothing, it's good. Yeah, it's not good.

Let me ask you, are these, are these separately deeded lots, uh, pads if you will, or who owns the—

or is it the whole 19 acres is under one the whole 19 acres and the tenants were essentially renting the pad.

Got it. And they want— it sounds like the tenants want to rent it back, whatever is put there. First dibs, right of first refusal.

Right of first refusal. Yeah.

Yeah.

Makes sense. Okay.

Got it.

That's what we're dealing with. Even—

is there anything wrong with that? Are you opposed to that, Katya, in terms of your exit plan? Is that— look, if they want to get first dibs, for sure. I mean, those are the renters, right? Yep.

We would— yes, we would love that. And again, it all goes back to, like, what are the terms and conditions that they're wanting this under? But again, we're not wanting to take on a fight that isn't ours.

Correct. That makes total sense.

That needs to be handled with the original owner.

Got it.

So, yeah.

That's a great, great project. Good luck.

Thank you. Very insightful.

Yeah, it's exciting.

Yeah, very exciting. I'm not sure where Tommy is. Blake, do you have any projects that you're working on?

The latest one was the 42 acres in Oklahoma. I haven't had anything else just yet. I've kind of just been looking at some other properties and nothing's really kind of had the numbers justify it. So that's the only one currently. And the latest with that is Tracy is going to walk the property at 9:00 AM Pacific time on Monday.

Okay. That's exciting. So I want to make sure we get that in the calendar so that if we can, I'd like to bring her into the call and hopefully she could even do a video walkthrough with us.

Yeah, that's what we were talking about with Tommy. So we're going to keep in touch with her, then make sure that's something we could do on the podcast.

Yeah, that would be awesome. Renting dirt. We love all the renting dirt, which is very exciting. I know Tommy wants to go over this with you, and I know we have a couple of properties we actually yesterday, we went driving and we found, what did we found? We found, was it 3 lots or 4 lots that were um, just dirt. And so we have the option of essentially entitling them and getting them pad ready so that they can be built. So that was really fascinating yesterday driving around. Then we have another, um, viewing that we're doing today, and this one's really interesting. It's currently on the market for $4.4 million, but a wholesaler, um, has it under contract and he's selling it for, I think, $2.3 million or something like that. Um, I guess the people had— have passed away, and so it's a whole, um, probate situation that they're dealing with, which is really interesting. Um, Tommy, are you there?

Yeah, I'm in here.

Okay, so Katya just went through and was talking about the Palisades project, and I know you wanted to run through the LOI with that, and then I have your ChatGPT up ready to go. So where do you want to go?

Katya and I had a meeting this morning about the Palisades deal, and what we wanted to do was— Katya, just give us a brief update on that one. What did you, uh, what did you encounter when you got back in touch with the city or county?

I actually already gave, um, everyone an update about the process and what we've done so far, so we're ready.

So basically what we need to do is figure out how to, how to position this and say we're, we're interested in buying it. We need to know a serious price. We need to make sure that it's completely able to be purchased. Basically unencumbered. The city— we are, and we may want to disclose that the city already told us they're not in support of doing anything different than what was already there. And we already know that speaking numerically, putting back 1980, you know, mobile homes from Calvco or Champion is not an option. So that's what we want. To see if Deal Hunter by Landshark, our GPT, will actually help you write that LOI. So you want me to prompt it with you?

Yes, that would be great. Let's do it.

All right.

Okay, it's dictating.

Hold on, Katya, can you share your screen so everybody can see what you're doing? Because this is a training opportunity.

Oh yes, definitely, definitely.

Are we ready?

Not yet, give me one sec. Yeah, my computer's being so slow. Hold on. Okay, it's going, I think. Yes, you're good, Tommy.

All right, ready?

Yeah.

So we want to write a letter of interest on this property. So write the letter of interest, use the address as it's applied, and we want to, uh, we want to cover just a few things before we go into a legally binding agreement with these people. The first thing we want to know is what is their asking price. We're not interested in bringing an offer until we know what they're willing to accept. So make that the first point. Second point is, is that we need some clarification about the previous residents. We understand that there's a group that are looking to, uh, litigate their position on the property, uh, as soon as a new buyer is discovered or as soon as the owner determines what path they're going to take. Um, the facts that we know about the property are that the city will not allow for anything 3 stories or more. To be built there. The process of rezoning it to be something other than what it was prior to the fire is at least a half a decade, 5 years or longer. And so we understand that that's an impediment to, uh, any development. We also know that the city has told us that the zoning does not match what was there. However, they're willing to allow us to put back what was there due to their, uh, the executive order that was implemented by the state, uh, the governor. Or the mayor, whoever it was. So that executive order that was in place by the municipality of the area allows us to put back what was there. And, and, uh, that would be, uh, we know that that was previously, um, 1980 to 1970 mobile homes made by Cavco or Champion Homes. These models no longer exist, and therefore we would need to go back with something new. We already had discussion with the city, and we understand the city is, uh, is, uh, in line with putting something back that's similar because they understand it would be impossible to replace antique mobile homes, um, based on year and VIN number. But we also know that by going back with the proper zoning, The, um, uh, the Seaside Commission, the, the people in charge of, of whether or not you can build what you're building there or not, they have a say-so in what's built there. So therefore, building any kind of mansions or anything like that to match with the, uh, the current zoning, which is 1 unit per, uh, I think it's acre or, or 2 acres, um, that current zoning would still need to go through a rigorous process of 5 to 7 years of of permitting, blueprinting, and getting approvals. So the fastest way to get people back in homes, uh, in this area is to put back something comparable, which we are proposing and suggesting to the city, which they have been very favorable on. However, we still have to pay all the fees and all of the, uh, the, the, um, soft costs to realize or understand what the city would allow us to do there. Um, put this into the LOI that these are all the facts now, uh, and the assumptions, and we would like to know a fixed price to understand if we're going to continue, continue to pursue this or come back with a counteroffer. Close out the letter with the name Katja Lindstrom, um, Managing Director of the California Division, Titan Impact Group, uh, LLC. Did we get all that?

Yes, I just need— it's loading right now.

All right, perfect.

Okay, let me send it. I'm so sorry, guys. I think my computer is gonna break up with me in a sec. It's gonna want to leave the family. It's too overused.

Too many windows open.

Oh gosh.

755 windows open.

No, it's actually less than my average, but I'll delete them.

We're only laughing because we totally are guilty.

We are 100% just as guilty.

Okay, not sure how long it's going to be thinking for, but I can update you guys when it's finished.

Yeah, let's do that. And then Catherine's got my deal that we, uh, we looked at yesterday. We looked at all those vacant lots, and then we were talking about, um, updating and getting our, our, um, our executive summary done on, on Outback. So I'll leave it up to you, Catherine. Which, which do you prefer, the, uh, the vacant lots and doing due diligence on those, or updating the Outback?

Yeah, let's do the vacant lots because those were pretty exciting yesterday. Holy crap.

Yeah, you already have these in your email.

Okay, let me— you should be able to see my screen.

I'm currently watering my rock right now.

Okay, so let's go to Deal Hunter. There we go. Run this deal. Okay, so this is the first one. This was the one that was on North Church Road that we went and saw. Oops.

Now these are all vacant lots just north of Scottsdale. Some of them might even have Scottsdale addresses.

Trying to remember if this is the one that we all liked. It— this whatever one was the horse, the very first one that we saw. Yeah, I think this is the first one we liked. Okay, so which is hilarious because it says no go. Oh my gosh, that's funny.

It's what?

Okay, so it says the fast verdict is a no-go, $275, unless access is resolved before closing. I don't think this is the one. Trying to remember the very first one we saw, the name of it. This is the one for $275.

Well, it probably has pictures. You can probably identify it by the pictures, um, after it's done running, and it should give you a, a A, um, it should give you the, uh, um, option to look at the sources of where it got the information.

This is it.

This is the one. Well, it was foreclosed on, so it says fast verdict, no-go at $275,000 unless access is solved before closing. This is not a normal land deal. It is access Arbitrage Spectra Speculation deal. The listing is 1.85-acre vacant residential land in Pinnacle Peak Heights. It's listed at $275,000, roughly, uh, $148,000 per acre. Multiple listing sources, uh, major red flag, no legal or physical access.

Interesting.

Yeah, so there's no HOA. Utility shown is APS, electric, uh, public sewer, water. Uh, fatal issue: no legal or physical access.

You can sue for that though. So here's the thing, you can sue for it. It costs money. Um, and, and that's, and that's what I want you to prompt it. Ready? Let's, let's have a talk with it because I've done this before too.

Okay, go.

It's called landlocked, but let me tell you what it is. Go ahead and pull it up. Let me know when we're ready.

We're ready.

This property, uh, parcel is— appears to be landlocked. So what are the steps and procedures to getting access to it? Uh, we'd see that it touches, um, it touches the road, and, and it appears like there's an easement that cuts across the, the boundary of it between the road and the property. What, uh, what would we need to do to acquire that? Would we need to enter any litigation, hire an attorney? Would we be doing this against the city, or would we be doing this against the neighbor who actually owns the access? Who would we be, uh, pursuing to get the access from?

I have a question while it's thinking.

Tommy, did you hear Michael?

No.

All right, hey Tommy, it's Mike Butler. I got a question. It's interesting. Uh, I agree with you, it's landlocked. Uh, I find it interesting that the city, or at some point they have public services on that lot that's landlocked. That doesn't make sense to me.

Well, again, because the— if, if you— if Catherine can pull it up on the map, you'll see This thing has literally got frontage on the road going by it, just that there appears to be some sort of easement blocking it off, which you would need to get from the county and say, hey, can I tap a driveway across this? It's called an ingress/egress application.

Exactly right.

So Michael knows this because he's an apartment developer, so he understands the, you know, the in and out is important to a building.

Right.

So, um, trying to look for—

is it difficult or is it just expensive to create a road?

Um, it's expensive because I'm difficult. Does that make sense?

100%. Just kidding.

No further questions. Um, but yeah, that's, that's the key to, to finding a, a property that needs something, is not a lot of people are out to do, you know, uh, that improvement. I think Michael's one of those. Michael wants to— Michael basically wants his building delivered pretty in pink. That's it.

Yeah, the headaches. So, it might be just a utility. I guess you don't know what the easement is. It could be just a utility or city easement.

Something like that.

So, what it says is access game plan. You're reading it right. The issue is a landlocked access. No, not necessarily a road, no road access nearby because we literally drove up to it. Um, the listing itself says no legal or physical access, even though the parcel is shown as 1.85 acres zoned R-190 with utilities listed nearby on the property. The big distinction— touching or nearly touching a road on a map does not automatically equal legal access. You need a recorded insurable right to cross from the public road to the parcel. Who do you pursue? Most likely target the private neighbor owner of the strip of easement area. If there is an easement-looking strip between Church Road and the parcel, the first question is who owns the land underneath the strip and who benefits from the easement? Uh, you would usually pursue one of these: the neighbor who owns the burdened land, the owner beneficiary of the existing easement, the original subdividers successor issue, or the City of Scottsdale. So step-by-step procedure to get access: order preliminary title report on the APN. Then you need to schedule B to show existing easements benefiting the parcel easement. So would Deal Hunter be able to give us the title report?

Um, it would probably— it might be able to tell us who owns that owns that dirt. But I would want to verify it at this point by going to the Arizona, uh, the Maricopa County property appraiser site and looking at who, like, who's owner of that easement. Okay. The other thing you could do is you could go and take a screenshot of it, pull it up on a map, take a screenshot of it, highlight that, that parcel, and like draw a line through that, that spot and say, who owns the spot that I just drew a line through?

Okay, okay, so I'm going to Google Maps.

And that's the thing, is like, I, I, again, I know how to do it the hard way, which is go to the county's website, look it up, do this, do that, blah blah blah, back and forth, and then, um, have, have results in, in an hour or so. Or I can screenshot it, say this is what I'm looking for It takes me 5 minutes to see if it figures it out, and then boom, done.

We—

so, okay, so we pulled up on Church Road here, and we literally walked right up to it here. So what, you want me to draw out this piece and say who owns this?

Yeah, the, the piece that we walked across, remember? Because it was like the horse pasture. Yeah, so the, the section we walked across I would draw— I would highlight that or draw on it so that it can identify it and say, this is the area that we're concerned about getting access through. Who owns this public record? Okay. And again, I, I don't have the free version built out to do API, so it might not go read the appraiser's website. It might not.

Okay, so this is gonna take me a minute.

Uh, that's fine, let that one run while it's running. You know, after you get the screenshot done, put it in there and say figure this out, let it start running, and then go, uh, Katia should Katya's piece should be done for her to review, right?

Katya, are you done? Okay, she's done. Go ahead.

Yes, it's done. Okay, so it drafted me an email to write to him, but I'll also include the other brokers.

Yes.

Sorry, guys. One second.

And then, and then we— I think if Cicely's in here, isn't— wasn't Cicely working on this with us? Isn't she our our local, uh, our local California, uh, broker on this?

Yes, I would love to, um, confirm with her before this, before I say absolutely.

Yep, absolutely. Let's, let's make sure that our— because again, the way that the Land Shark's structured, we've got our experts, we've got our sponsors, we've got our professionals, and we all work together in a way that it makes it easier for us all to do real estate by staying, you know, staying in our, our genius and, and fixated on what we do well. Um, you know, Katya is the nicest girl in the entire state of California, so therefore she's in charge of talking to all the assholes. Um, uh, Sisley is the professional. She knows the rules, she knows how to play by them, uh, and she's able to come in and kind of be a bulldog when she needs to be. And then I'm here as the backup. I'm the one with the expertise and the knowledge, and I'm the guy that knows how to trick people, trip people up when they're, they're bullshitting and pull the red flags and stuff like that. Because, because sometimes nice people don't pull red flags on people. But people that are, are, you know, to the point, a little bit more blunt like me, I get people straight to their red flags pretty darn quick.

So sounds good. I'll review it. I'll review it with her right after we're finished with this call.

What you got? So what did it— what did it, uh, did it highlight everything? Just scroll through it, or are you sharing your screen?

I am sharing my screen. Can you guys see it?

Yeah, um, scroll through it and show where it's cut, you know, the points it touched on, and let's see what it said.

So it touched on the pricing guidance and seller expectations. So we'd like to understand the seller's current asking price and what price level the seller would realistically consider acceptable. Former residents litigation exposure. We need clarification regarding the status of the former residents and any related legal exposure. Current development reality as we understand it based on our conversations with the city and due diligence, and then it lists out what we discussed. Um, continuation style rebuild pathway, which summarizes the direction we want to go with this property. Coastal regulatory constraints, um, and remaining costs and uncertainty. So we would still need to incur significant soft costs, consultant costs, fees, and agency-related expenses to determine what the city permits. And, uh, in light of the above, we're requesting that the seller provide a clear fixed price expectation so that we can determine whether this makes sense to continue pursuing the opportunity and invest additional time and capital. This letter is intended solely as an expression of preliminary interest for discussion purposes only and does not constitute a binding offer, agreement, or commitment.

Boom, done. I love it.

Awesome. Okay, so then I'll review it, um, one more time, and then I'll send it over to Cicely to get her opinions on it, and then I will send it over.

I think that's great. And, and I, I would maybe even mention to Cicely if she wants to if she wants to, to mention, you know, um, the, the value that they've, they've discussed in the past being like whatever it was, $90 million or whatever, I would make mention that in light of all the information we already know, this is not going to work. So we need to know what an actual price is. That way, if they're like, no, we're going to be stuck at 90, you can literally just, you know, give them the two, uh, the two tall mans and, and, uh, let them know, you know, that Uh, we're not interested. So, um, uh, because again, if they're, if they're not going to be realistic about the value of the property based on all the conditional shit that's attached to it, by all means let it turn into a beachside beautiful, you know, vacant lot that they can say used to be a— like, call it a ghost town. Done. Like, some things just have to stay burnt.

Okay, understood.

Yeah, because they'll never get what they're asking for with the conditions that it's faced with.

Okay, sounds good.

Awesome. So what did, uh, what did Deal Hunter come up with on, uh, on that lot, Catherine? Did it work out or was it a bust?

Uh, it says it can't conclusively know. Yeah, it doesn't know who owns it.

Got it. So you'd have to go to the Maricopa County Assessor site. What I'll do is I'll do that later on. Just earmark that, dog ear it for me. And what I'll do is I'll go to the assessor's website, I'll find out who owns it, I'll feed it to it that way and say, here's, here's what the assessor's website said, and then allow it to kind of configure the resolution to that. So that's the point to Deal Hunter is that it's a problem solver. Kind of like a, just a mastermind calculator. I loved math growing up. Math was like one of my favorite subjects aside from history. History first, math second. Um, but the thing I loved about math was the math, the word problems, like the story problems, like story problems made, I could literally see numbers, uh, as, as the teacher was reading. And for whatever reason, I was able to answer the question before she was usually done with the question. And so that, that was cool. But Deal Hunter does that already. It basically does math faster and word problems than any, anything else.

So I have the next one ready to go. I pulled it out. I have all of them ready to go. So this one is the one on East Desert Vista Court. Yeah. So vacant land. It was Rio Mountain Estates. States, 1.3 acres. They were asking $219,000. Um, HOA shows $95 a month. The Shark Read: this is not a rental income deal, it's a custom home lot build spec, uh, land bank play. So back of the napkin build math, uh, purchase the land for $219,000, closing costs 15 to 25,000. Uh, custom spec build, 3,800 to 4,500 square foot house. Hard cost range, $325 to $450 per square foot. Uh, soft cost, 15 to 25%. Exit strategy, uh, $1.5 million to $2 million depending on the design finish views. Rough feasibility at a 4,000 square foot, you're building at $350 a square foot, $1.4 million. You got the soft cost, $280,000, land $220,000. Uh, the basis before selling is $1.9 million. This means a spec build would make sense if you realistically exit at $2.2 or $2.4 million, right? Offer target, they're saying investor land target at $160,000 to $185,000. I would not chase this, um, at the asking, uh, without due diligence.

And what was he asking on it again?

This one was $219,000.

And that was the one that was— what's the street name on it?

That was the one, uh, it was on that cul-de-sac. We could only pull up behind it. It was Desert Vista.

Yeah, it's like stuck in between two houses, right?

Yeah, it was at the end of the cul-de-sac.

Yeah, and again, it says, it says to offer where? What is this? What does it say as far as the, the fair market asking?

It's saying to ask 160 to 185.

Right. And so again, going with the 10% rule, right? So it's saying that we could probably sell that house for 1.9. We don't want to pay more than 10% ARV. So we're not going to— we're not going to buy it for less than any more than 190,000. Right. So we might come in and say, listen, we know, like, what we're faced with back here. Our construction costs are going to be more, but we're not going to be able to get any more than, you know, than the standard out here. The other thing is, is to verify, validate and verify the houses we did see that were over there and understand if those are getting more money. And if those are getting more money than what, you know, what Deal Hunter's saying right now, that could be a factor as well. But yeah, you're definitely going to come in with a, with a mid-ball offer um, try to hit them with a fastball at about 160 to 175K and just say, this is where I'm at, you know, like, oh, I'm maxed out at 175 because I know for a fact I'm not going to sell this house for more than 1.8.

Right. Do you want to see the next one?

Yep, pull it.

So the next one was East Sonoran Trail, uh, that we went and saw. Run this deal.

Okay.

Shark verdict conditional go only if buildable, buildability checks out. This is not a buy and hold cash flow deal. This is a luxury land basic, basic custom spec JV deal. So $450,000 to $500,000 for the land. Uh, the dirt looks cheap versus current Whisper Rock land listings. So this is the one that was in that HOA, in that, that, um, gated community we went into.

Um, the one we, we followed the guy through. Next time we're doing— next time we're out looking at property, we can't let a Canadian— Canadians do not know how to break the law very good, so, um, uh, we cannot let a Canadian be the sneaking guy. Just saying. Um, so, but yeah, that's the one where we, we, we were able to dodge the, uh, uh, dodge the gate, get in, drove around to it and looked at it. Um, or is it the one that we couldn't get to? Which one is it?

No, this is the one that we, we got into and we had to drive down that driveway to go see it.

What's the name of the street? I'm pretty good about those.

Uh, this one was East Sonoran Trail. It was in the Whisper Rock, uh, right, right, right.

I remember, I remember.

Yeah, so what's the garden gated luxury community?

Yeah, what's the, uh, what's the go, no-go?

Okay, so it's a conditional go only if buildability checks out. So at $450,000 to $500,000 for the land, then Zillow shows the lots are roughly $1.3 to $3 million, with lot ranging 1.15 to 3 acres. The high-end homes construction listed at roughly $4.25 to $6.83. That spread is opportunity, but also has red flags. So the land basis, so again, they're wanting $450,000. It's 1.4 acres. Um, prior asking was $500,000, which is interesting. Um, current active land asks are $1.3 million to $3 million. Best strategy, so land flip entitlement. So it's saying buy it for $450,000 to $550,000, exit at $750,000 to $1.1 million depending on the verified build envelope plans, utilities, and market timing. Why this works: the current activity lot inventory in Whisper Rock is priced material higher than the subject's last sale basis. A clean lot with architectural concept, survey, soil, Preliminary plans, HOA design feedback, and builder pricing could be repositioned to an end user or a builder. The risk: if this lot is discounted because of bad building envelope, drainage access, flag lot stigma, uh, view issues, setbacks, or HOA design constraints, the cheap price may be justified. Best move: don't just resell the dirt, package it as a build-ready luxury home site. Strategy 2 is builder JV custom specs. So assumption of a 6,000-square-foot luxury custom home, uh, build it for $350,000 to $650,000 a square foot. So if we do that, then the hard costs are around $3.1 million. Soft costs, $567,000. The site works, $250,000. Contingency, $350,000. $215 million, financing $250 million. So the project costs all in are $4.9 million. Exit sensitivity is it could sell anywhere $4.9 million to $6.6 million. The spec build verdict is that it can sell for $1,000 to $1,100 a square foot. But really below my assumed 525 square foot hard cost. So if it exits at 5.4, it's too skinny. 6 million, it's acceptable, but 6.6 would be the real deal. Max Offer Guidance, um, they're saying—

I would ask that one, I would ask that one right now to give you 3 to 5 comps in the area. To justify the after-build value, the ABR, uh, ABV, after-repair value, after-build value. That's what I would prompt that to do and then jump to the next one.

Okay, hold on. Okay, give it the prompt.

What would, uh, I need you to go and pull comparative market analysis on new builds in this area within 1 mile that have sold in the last 2 years. Uh, I need you to validate and verify what the per square foot price is on all these homes, uh, and what they've sold for, uh, in the last 2 years. And, uh, give me those comps so I understand what my, uh, after-build value will be on this house.

Okay, and then the last one is— come on. Okay, this is the one that was, uh, on North 136th Street in Scottsdale. So it's 1-acre vacant land home site. Um, okay, current public pricing, the fast verdict is go only at a discount or with entitlement utilities upside. So at $109 Uh, the dirt is roughly market aligned at, uh, $125,000. It's no longer obviously cheap. Similar land is selling at $95,000 to $149,000, uh, with multiple similar lots. So land bank, hold, custom build, spec build, or pay asking, what is attractive? Uh, that's Scottsdale Preserve frontage. The red flags: water is the deal killer until proven, no sewer, public pricing is inconsistent, long market time, so back of napkin underwriting. Um, 109 subject, 125 their comps. So the comps in the area are saying that for 1.25 acres at $99,000. So there's other pieces of land that are less. If you do a spec build, you're all in for $107,000 to $159,000. If you sell it at $1.8 million,, you'll be great. Uh, the best strategy is custom home owner-user flip. So buy it at 85 to 95. Number 2 is, uh, land bank it. Number 3 is build-to-suit JV. Uh, then funding pass, it goes into cash or HELOC, custom financing, private money JV. Offering strategy: offer $82,000 to $90,000. The terms would be 45 to 60 days for feasibility, negotiation leverage, due diligence checklist. So that's that one.

So on something like that, and again, Catherine's not wrong, it needs a well and stuff like that, we already know. And so on that play right there, offering the lower amount is one way to go about it. But on that one, I would go to him and say, listen, I want to pay you $125,000. But I can't do that and get all the work done to it. Right. So what I'm going to need is I'm going to need the property first. I'll give you a second position lien. Don't record that until actually I get my construction loan handled first. Once I get my construction loan handled, go and file your second position lien because that won't mess up my— that won't mess up my loan. But I'm going to get a loan for $150,000 so that I can get all the work done that I need to get done there. To turn that into a sellable lot to a builder. And we're going to sell it for $350,000. And we're going to sell it to a builder owner financed, meaning that I'm going to make the, make the builder put up $125,000 to exit my, exit my partner, right, that came into it with me. He leaves with $125,000. I'm able to now finance the builder because I, all I have is a construction loan for $150,000. And that builder owes me another $275,000 for the lot. And so, um, we're gonna, we're gonna work together— $175,000 for the lot— we're going to work together and get the house built. And when he sells it, he's going to give me $175,000 plus 25% of his gross. So whatever he grossed on the house, if he grosses $1 million, I want $250,000.

Okay, so those are all the, um, did it go back to this one? Hold on, I'm looking for the last one you gave that prompt to.

So the last one was a house that we're going to go look at, the mansion. I don't know if you got that address or not.

No, I didn't get that address.

Okay, I might be able to pull it. That one was crazy because literally I got the email right before we left the house. I looked at it, I was like, oh, this is a gorgeous house. It's pretty, you know, real pretty house with, with a lot of cool, cool amenities looking like in the pictures. So I said, well, we're going to be in that area. Let's go by and look at it.

Right.

We went by, we looked at it. I called the, I called the guy that sent it to me. He's a wholesaler. He's like, yep, we got a contract on it. I know the guy that knows the guy. And I— and this guy knows that I don't typically like daisy chains, so I'm like, do you know— do you know the guy selling it, or do you know the guy that knows the guy? Like, I know the guy selling it. Okay, great. So, uh, we went out, we looked at it. I hopped the fence, uh, risking full, uh, uh, full transgender surgery, uh, risk. Um, and Catherine can elaborate if she wants, but, uh, at the risk of my gender, I jumped over the fence to see what was it all about. Looked great. So we made an appointment to go back today. And then last night, while we were at our networking event for Club Scottsdale, while we're standing there, I show Michael, who we're going to be buying these houses with, the owner of Club Scottsdale. I said, hey, Michael, check this house out. We went and looked at today. We're going to go back tomorrow and tour it. What do you think? He goes, hold on, wait a minute. Takes me across the room over to a guy standing there. He goes, hey, Tim. This is Tommy D. I know Tim because Tim's pretty popular in the wholesale industry as the luxury, you know, the luxury guy. He does all the luxury houses and he wholesales them and stuff, you know, so he's good at that. He's the guy that's got it under contract. So my contact RJ and Tim are partners on the deal and they are under contract for $2.9 million, I think. And the property is currently listed at $4.4 million. And I think we discovered yesterday when we were looking at it, I believe that, uh, the owners are dead. That's why it's just sitting there.

So do you want to tell me the address?

Oh yeah, I thought it was in my, in my chats.

Um, let me see, let me look.

My phone is melting right now, it's so freaking hot.

So 787289 East Sonoran, is that— yep, this is the one.

Uh, no, that's— no, that's a vacant lot. That's the Sonoran lot.

Oh, oh, that's the one I just ran.

Yep. No, we want to run 10070 East Balancing Rock Road. Okay, you got that?

10070. Hold on, my computer's being painfully slow. Okay, 10070 East Balancing Sank Rock Road. Okay, it's running this, and it's comical because there were a lot of balanced rocks up there. So the name of the road was very appropriate.

Okay, here we go.

So it's listed at $4.4 million, 7,800 square feet, 4-bedroom, 4.5-bath, built in 2002. It's 4.95 acres. HOA is $217 a month, they're $13,000 APN. Shark, uh, this does not pencil as a clean rental unless it's a strong luxury, uh, short-term rental angle. Seller carry deep discount. Okay, so do we want to tell them what they're currently asking as a wholesale?

What is it assuming it's asking? $4.4 million, right? Right. Okay, perfect. Says it doesn't pencil there. So yeah, absolutely hit it with the, oh, by the way, uh, okay, we're getting it, by the way, we're getting it for $2.9 million.

It didn't grab that. So we are getting this at how much?

2.9.

It's owned by a trust. I looked up the assessor.

Yeah.

Okay, so here we go. Asking your price. So that drops it down to $368 a square foot, 34% below asking. Um, so gross rent would be $219 a year or $216 a year. The NOI is— wait, it just jumped. So vacancy taxes, HOA management, repairs. So you're looking at $112,000 to $122,000 a year, um, in NOI. So at 2.9, estimated cap is $3.9 to $4.2. So the debt check— so you'd have a 75% LTV. Uh, estimated debt service, Shark Tale at 2.9. This is still not a clear DSCR rental at normal leverage. Luxury flip resale basis, uh, owner-user acquisition with equity upside. Seller-financed hold, uh, luxury short-term rental, low leverage wealth preservation asset. So to hit the 1.2 DSCR Uh, NOI needs to be about $203,000 a year. So the $27,000 to $30,000 per month gross depending on the expenses. Property can, uh, reliably produce $27,000 a month as a luxury short-term rental, seasonal rental. Um, so purchase price with that Uh, balloon interest $108,000. That puts it at $120,000.

Somewhere around $10K a week on that thing.

Yeah, as a short-term rental, still not amazing but close with slightly higher rent, lower expenses, STR upside. Uh, So Max Logic offer logic 2.9 would not automatically retrade unless, uh, diligence issue inspection period 15 to 30 days, negotiation angle, uh, HOA restrictions, no major system surprises. Okay. Go, no-go at 2.9 conditional go, not because the rental numbers are amazing, they are not, but because basis is strong enough to create multiple exits. So luxury resale, backup exit, seasonal luxury rental, backup funding path, seller care.

What if we ran it as a fix and flip?

Okay, so let's ask that. So what if we ran this and did a fix and flip on this? What would the numbers be?

Because you let somebody like Ali sell it, you know, right?

So it says, I'll verify current public listing comparison data before locking the numbers. Okay, here we go. 2.9, uh, basis current listing. The spread of the list is $1.5 million. On the Zillow estimate, it's $1 million. So light refresh it. So if you put $250,000 into it, that's a light refresh. A base luxury refresh is $500,000, a heavy repositioning is $800,000. So the core stack, uh, if we all in variable, so the ARV for the $500,000 rehab is anywhere between 3.7 to 4.7. Um, the Shark line, this is not worth flipping for a $4 million resale rehab scenario comparison. So best flip plan target scope $500,000 to $650,000, uh, max allowable offer $4,000,000 to $4,750,000. Go, no-go, conditional go as a flip. I like it only if the comp supports the resale between $4,400,000 and $4,750,000. $775,000 after the renovation. The deal killer: rehab bids come in at $750,000. ARV is only, um, $400,000 to $4.2 million. Roof, HVAC, pool, windows, drainage, and structural issues hit hard. HOA blocks the best resale. Use angle: luxury. Uh, DOM is slow and carrying period pushes past 12 months. So the best action, uh, pull closed sales, not active listings in Troon, Talus Luxury Homes, over 5,500 square feet. Get a contractor to walk through the scope, which we're gonna go and take pictures and run it through free estimates today. Uh, cap the project at 3.5, 3.6. The price, uh, price the finished product at 4.4 to 4.6. 6. If inspection shows major issues, retrade immediately to convert seller finance hold. So there you go. So we'll take the pictures and run the things.

Yeah, and again, like, if it was— if, if we needed to, uh, to work with these guys a little bit, I know they're getting a 6-figure, like a 6-figure, uh, sale, uh, check on it. Um, we could possibly help, uh, get these guys to help us out and getting it taken down, um, by, by coming in at what they've got it under contract for. They've— to be honest with you, this, this is rolling through probate. They probably got it for $1.5 to $1.9 million, somewhere in there, I would imagine. So, um, there's no way in hell they're making a $20,000 Wholesale fee on this. That's not what these do, right? Right. So, um, the, the way they've got this thing labeled right now, it's labeled really good at about 7— I think 2.9 is what, 7% of the 4.4? 70% of 4.4? Uh, just prompt deal owner real quick. What is 70% of 4.4?

Okay. What is 70% of $4.4 million?

Come on, 3 million.

3 million. 2.9. Yeah, so they're playing by the rules. They know the rules. 70%. They know, they know everybody's going to see it listed at 4.4. Yeah, but now do, now do 50. If you did 50% of 4.4, that's 2.2. I think they, I think they're closer to 2.2.

Got it.

100% honest.

Okay, well, it's the top of the hour and we have another scheduled call right now with, um, Mike Butler, so Let's do that.

Yeah, I'm gonna, uh, you go ahead and jump on that real quick. I'm gonna follow up with my next appointment, Caesar, uh, that I'm supposed to meet at 12 o'clock, and then I'll, I'll jump on that call with you and Mike Butler. Can you throw me the link real quick in a text message so I can get on that?

Yeah, I'll do that right now. Okay, Mike, we'll see you on the other call.

And, uh, everybody, I'll wrap it up with a, a prayer that everybody have a wonderful day. Heavenly Father, we thank you for the blessing of this life, this this love that you give us all and the ability to do the things that you wish us to do. In your name we pray. Amen.

Amen.

Thank you.

Bye, everyone.