AI Live - Land Shark Mastermind

back to you.

I was trying to squeeze it in before the call. Yeah.

And here's what's super cool about going through the process is, I don't know, it's just more confirmation of how everything is lined up. It's just— it's beautiful.

I love it.

Yeah, I do.

Yeah.

And that, that Laura— I spoke to Laura on Friday. The due diligence list that you sent was fine. Uh, there was the only thing I did that was maybe duplicate. I think it was the, um, I changed one thing and I put it in red in the tab there, the line item. I think it was under financial due diligence, or maybe it was operational. I can't remember. I can actually— I can pull it up. Actually, it was something minor.

Yeah, yeah. Well, we, um, uh, we're, um, excited because we're, we're getting to the point that we're making somewhere between 3 and 4 offers a week now. And it's again, it's, it's an agnostic group of assets because we're, we're basically looking for stuff that has value add or massive depreciation like we talked, talked about yesterday on that one property. There's massive depreciation on that one property out there in Scottsdale and the Uh, the, the short-term rental guy, the Airbnb guru, is looking into what it's going to take to, uh, manage that for us. And so if he comes back and he's like, well, we'll make $300,000 or $400,000 a year off of it, then we know what, you know, what we can do. But if he's not comfortable with getting, you know, more than $200,000 off of it, then we can't really do anything. And I did talk to the buyers about that, or the sellers about that yesterday, so it's just you know, going after future value. Well, why don't, why don't we agree to your future value? But I'm going to give you what reality is, and then I'll give you the value of that in the future.

You know, I had a reality call with our 501 Washington owners this morning.

Nice. Yeah, a couple things came up.

I went good. I can, I can tell you guys offline. And but Are we, are we streaming live?

Yeah, yeah, we're, we're all over the boards, bro.

Yeah. So I'll keep it high level, but I picked up something during lease audit. I don't think it was intentional on the seller side. I think it was the listing agent's, broker's lack of clarity. And that is a material difference and material issue. And so lesson learned is that due diligence, there's those periods are there for a reason. And lease audits are probably the most critical thing to go through.

Right, right.

So we can talk about it.

Well, absolutely. We can dive into that a little bit more for sure. And then, Catherine, do you know, is, is, is— we got a text message from Blake this morning that he's out of pocket till sometime in August. You know, I mean, that's only like 10 days away. He's gonna go surfing in Hawaii or something. I have no idea. How much fun is it to be 22 and, and, and have zero F's to get?

I have to tell you, I'm kind of inspired, and I'm like, maybe he should be mentoring us on the fun factor, right?

Let's do that. Like, how do we build claws?

Like, wait, if we're always— Laura and I are always celebrating the anniversary of 25th birthday. At least I am. My 25th birthday was like my best birthday ever, best year ever. And I'm like looking at my life going, okay, wait a sec, so I've done all the things and now the kids are gone. Could I go back to being 25 and like carefree and traveling the world?

And you keep celebrating it, you might as well live it.

I'm actually kind of inspired by these kids. Like, wait a sec, they might be on to something.

Well, the problem is, is that we don't— we, we've got the built-in oh shit factor, right? Like We, we can't go, oh, let's just leave the country and end up somewhere in the middle of the, in the middle of the world and figure out it, figure it out when we get there. Our brain is already trained to, well, how are you going to eat? How are you going to poop? How are you going to sleep? How you going to do this? How you going to do that? And before you even get there, you're already like, yep, I ain't going, because the amount of work that it takes. And this is why people keep mid-level, like, uh, we watched this episode last night with, uh, Uh, the Big Bang Theory, where the genius, uh, on the show Sheldon, um, he, he goes into like a, a, uh, I don't know what was an employee, uh, looked like the unemployment office, and he says, I would like to order a menial job please. Like he was at McDonald's, right? And the woman's like, excuse me? He's like, something that, you know, uh, makes me feel like what you're doing. Yeah, he's like, something like what you're doing or whatever. And he totally insulted her because he's such a narcissist. But the end result is, is that she's like, well, what do you do for a living? And he's like, I'm a theoretical neuroscientist on string theory at Cal State University, blah, blah, blah. And she gets up and goes and calls security, like, get this whack job out of here. You know, like, he's too smart for everything.

He—

and I will never forget the time I was told that I had too much experience for a job. When I heard that, I was like, what? And, and that was kind of shocking. But that's what tends to happen with people, is once they find that— and I find it true with men— once men find a peaceful position in life, whether that's with a woman or a job or family, that man's stuck. He's like, I found peace, I love everything that is going on in my life, and I'm going to stay right here, right? And, and, and I call it the caveman mentality. Like, I found my cave, I got a fire, and food runs by every third day. Done. Now all I got to do is grab a chick by the ponytail and make it happen. So, you know, um, I get the wow, here comes the wow, shaking heads, frowny eyebrows. Anyway, the caveman theory is that if a caveman can find all the comforts and be peaceful, he will.

I'm not male.

The only time a caveman goes out to get more is when he has the desire to do it. And I call that the Grant Cardone— like, I seen it the other— again yesterday, where Grant Cardone's wife's talking about telling him he needs to become a billionaire and how that infuriated him. And it was like, woman, you're greedy, like gold digger and all that. And she's like, no, no, no, no. And the way she explained it made sense. But at first I'm like, I feel the same damn way. Woman looks at me and says, go become a billionaire. Or I'm like, it's like, what? Like, I want to be one, but don't tell me, you know, don't tell me what to do, you know? And, and in that moment, she was able to explain that based on what Grant was saying he wanted to do, the only way he could get to do that was if he was a billionaire. And so she was seeing it from an elevated point of view, saying, look, brother, if you want to do this, you got to do this. To get here, you got to do this. And, and so that was— once that clicked in his brain, boom, start, you know, the, the rocket ships went off. He started figuring out what he could do, you know. And so inside of that, um, you know, it kind of leads me into the, the The stuff we're going to talk about today with deals, does— who we only have, we have one participant watching, I guess. Does Allison want to throw anything on the table this morning before we jump in?

Allison's at work. She's just listening with an earphone in.

Perfect.

And then we've got Kathy, who I've invited to join.

For sure. Let's get all the people that we've invited to join to come up, say hello, good morning, tell us about what's going on. Um, I'm going to pull up— we're going to talk this morning about a land hack. A lot of people know how to do house hacks. Who knows how to do a house hack? Can Laura— what's a house hack? Laura's super smart, she can tell you a house hack.

I'm not sure your definition of a house hack. So you go ahead and do the house hack.

Well, what a hack is, just something that most people don't think of and you're able to work your way through. A house hack is like your son owns multiple rental properties that pays for his rental property, right? Or his house. And so he's using, you know, pays for his lifestyle. Right. Pays for his lifestyle.

He rents his place right now, but it pays for his lifestyle. And he paid for his lifestyle all through college because he never worked a job in college.

But if he wanted, if he wanted to get into a, if he wanted to get into a property right now, he could go out, buy a fourplex, live in one and have the other three paid. Yes, that's a house hack. You can also use an FHA loan to do that as well. He wouldn't be able to get his first-time homebuyer because he was like in kindergarten when he owned his first house, right? Something like that.

He's 16.

Yeah.

16, close enough.

Um, well, his LLC owns it, he doesn't own it.

There you go, there you go.

So, um, but he was able to ref— to finance it because it was owned outright. So he put a mortgage on it and bought himself a BMW and is investing in other things. So, and has 2 properties now that he's managing and At 25, he's got quite a bit going.

And in that case, you know, if he went and bought a fourplex, he would then be able to live in one, have the other three pay for it, and then, and then at some point be able to get out of that and go, go live in his own house without shared neighbors and just have it as an, as an income-producing property.

Right.

You know, that's how I got started.

Yeah.

It's gorgeous. New 1.

That's basically what he did with the house.

Oops.

Some echo. Uh, we bought a house, uh, that he lived in while he was in college and rented out rooms. And that was, uh, he, he managed the mortgage. We had a mortgage on it. We, we qualified for, put a mortgage on it, bought it as a second residence for us, but he managed it from day one. With, uh, renting room— rent. It's a 6-bedroom house, renting the other rooms out, and he still has that now even though he doesn't live there anymore.

Right, right.

Yep.

Well, and that, and that is a beautiful example of how you can do things differently in all kinds of real estate aspects. Um, and that's what I would— that's what I did was, um, when I came out here to Arizona, I was actually working as a nurse And my brother lived at a piece of property that he rented that was, um, um, um, that's weird. Um, he lived on a piece of property here, you can see it on the screen. Uh, it was a house with 5 acres behind it, and it was already subdivided during the 2006-2007 housing boom.. And then we had the 2008 housing crash. After a boom, there's usually a bust. And so what ended up happening was I basically inherited the property and I called the owner. I inherited as a tenant because my brother moved out, left me with the place. And I was like, you know, it kind of looked like this place here next door with the rough grass on it, stuff like that. I says, I called the guy, says, hey, what's going on with this? What are you doing with it? He says, it's already 3 vacant lots with a house. So 4 lots, 1 with a house. I says, what can we do with it? You know, he says, he says, well, I'd like to just get rid of it, get it off my books. I took a huge loss on it. I paid $800,000 for it back in 2006. And now this is 2017 when I'm talking to him, 2018. And I was like, so I was like, so you mind if I, you know, stay here for another year? He says, yeah, go ahead. And I was working and going to school at the time. And so after about a year of living there, I pad split it. And I rented out every room, and I made almost $1,200 a month just renting out the rooms. And so, and I lived in that little trailer you see right there. And so I, I actually lived outside the house. I rented the rooms inside the house, and, and it, it gave me a little bit of an income. But then I started looking at it with my brother, and I said, well, why don't we build this thing up? Back here, there was just ton of used cars. My brother, other brother, was a mechanic, and, and I says, why don't we just you know, clear it out, knock it all down, and, and look at building houses like we did back in high school. And me and my brother, my other brother Charlie, we used to build houses in high school. So I'm like, let's go out there and build some houses, make some money. It's 2018, and he's like, you know, not too sure. But you can see little houses popping up over here and over here. I was like, I'm thinking the market's going to turn, bro. We need to, we need to look into doing this. And he said, well, you know, figure it out. Talk to, talk to the owner and see what you can come up with. So I called the owner on the phone and we talked about it and he says, here's what I'll do. I'll sell you each lot for $75,000, the whole thing for $300,000. He said, if you take all, all 4 lots, I'll sell, I'll sell them to you individually and I'll do what's called a partial release. And I said, okay, great. So each lot, I listed it for $125,000 a lot per acre. It was 1.25 acres. And I said, people— and you could— let me pause the video right here. You see this house over here with the, uh, uh, with the little trailer? Yeah, yeah. And let me just back up a little bit. There's another house right here with a little trailer. And I'll back up a little more. Uh, not too much. They're back here. There's another camper back there. There's another house back there. The neighbor two doors down did this same exact thing in 2015. He took his property, split it into four lots, shared the well, ran the water, ran the electric, and he built 1, 2, 3 Cracker Jacks. Those 1, 2, 3 Cracker Jacks sold for $300,000 apiece in 2017. And so I was like, that's, that's telling me there's, there's money on the market. Then they built this big house that you see right there in the middle of the two B's, double B right there. That was the, that was the first 4,000-square-foot under-roof house built in this area ever. Like, they had all been under 3,000 square foot, um, and this was over 4,000 square foot. You can kind of see over in the very, very far left, uh, one, a white style house right there. That was the first million-dollar house built out there. And so they were in the process of building that one. So this— the year this was done was in, uh, I did this video right here. Um, see if I can find the date on it. Um, dang it, doesn't say when I posted. I want to— oh, right there, 2019, October 30th, 2019. Boy, don't you wish we could go back to that, get rid of COVID I posted this as a 4-acre lot, or I'm sorry, 4 lots, one with a house. I sold the house for $300,000, which paid for the rest of the land, but I had a partial release. You can see the house as we get up there. I had a partial release, so I only had to pay him $75,000 to sell that house and another 25%, which basically worked out to— I gave him $100,000 to buy that house., and then I sold it for $300,000 so I could pay for the rest of this to get done. So I used the other $200,000 to start the road and do all the stuff to start getting the electric, the water down there. And so once I did that, I actually was able to turn around, got the road in, got the blueprints, got the permits. I was able to sell, um, the, uh, sell the thing to um, uh, an investor. Let me pause it right here. So I had sold the house for $300,000. It actually went up to $420,000 by the time the last person bought it. It flipped 3 more times after I sold it.

Wow.

I put in the— I upgraded the well and put in the well. You can see that there. But then I sold the 3 lots in the back for $300,000 to an investor, and that investor then turned around and allowed— hired me to be the general contractor. He said, you can build all the houses. I said, okay, great. I had a builder that I knew who was looking for lots, and he, he just finished these two houses over here. And you can now see that the, the house I pointed to in the middle before is done, and, and, and there's another one across from it going up and one next to it going up. So like we went into a building boom. And this was in December of 2021, so we're, we're almost just like 2 years apart from each other. And this is how much changed in 2 years. We went from that dirt lot video to this one, and what happened was this house became worth like $600,000. We— I sold these 2 lots. We'll get up on these right here. Um, I sold these 2 lots right here for, um, uh, uh, $150,000 apiece with the blueprints. So again, I sold 2 lots for $300,000, which meant that my investor basically got to build the house in the back for free. Like, the lot came free and, and, and everything. So, um, we'll scoot back there. Um, this was the house I was planning to build for myself when we originally started the project. Me and my brother were going to build the 2 houses in the front We're going to build this one back here for me. Um, and, uh, my brother backed out, so I ended up selling them to those builders, getting the investor involved. It all worked out. None, you know, nonetheless, all worked out perfectly and, and no big deal. You can see my, my camper over there where I was living. Um, we were finishing the house, getting it ready for— getting it ready for shingles to— or for slate because it's a slate roof, to get them loaded up there. So now I will show you the final product. This was filmed on, um, let me pause it real quick because I'll turn up the sound. Um, when— where is it? Um, anybody see the date? Okay, June 23rd, 2022. So a little more than 9 months later We finished the house, we staged it, and I will turn the sound up so you can hear it.

This gorgeous new 1.5-acre custom-built home on horse property with full irrigation, with 4-bedroom and 2.5-bath, that is located at the end of the road from 2 other custom homes with no HOA in Buckeye, Arizona. Approaching the property from your neighbor's block wall comes to the home paver concrete driveway combination. The beautiful front door will welcome your guests. The living room opens to the kitchen, which features upgrades, quartz countertops, and beautiful white shaker cabinets in a large island for hosting large gatherings. The home has high ceilings throughout with extra room off the living room that can be used for an office and/or extra bedroom if desired. The large master bathroom features his and hers area with each one's vanity in their own space, a wet bath and soaking tub and shower combination with the rainfall showerheads. The 3-car garage was designated to fit a total of 4 cars. The outside wraparound porch is great for entertaining. The yard has room for a pool if desired and a septic tank that is on the side of the home, not in the backyard. Don't forget, the animals and toys are welcome here. The private lot has ultimate potential and is only 5-minute drive off the I-10 and Jackrabbit Road. Home is move-in ready for you today. Realtors, bring your buyers for 1% commission.

Do you hear that last part? 1% commission.

Nice house.

Thank you. Uh, my partner who— the investor who, who I was working with on this job put the advertising at 1% commission for realtors. The— again, this is 2022, like we're in a massive seller's market, and he decides, oh, I'm going to go 1%. It took us 9 months to sell that house. Like, it was because they're coming out of COVID Tommy, is that why? Huh?

No, it was the realtor's commission.

He cut every realtor's commission and no realtor.

Oh, they weren't incentivized to sell it.

No, no incentive to sell it. And you can— and it's on his— this is from his social media. You can see Empower Media. That was the name of the company at the time. It had 58— I mean, we had a lot of views, almost 6,000 views on it. So, um, uh, we had, you know, we had activity. And this model actually sold for me 30 more times and made us, made us, uh, uh, almost, almost $20 million over, uh, over that 4-year period after that. So, um, we did, we did models similar to this, not the exact same floor plan, for— we did things like the 4-car garage, we did things like this, this, uh, uh, this is called a wet room. Um, the original, the original floor plan was for there to be a wall route right here with a two-headed shower in here, and, um, then there was going to be a soaker tub and a smaller vanity. And we were like, you know, we looked at it and I was like, no, you know what, let's do a wet room. We pulled the wall down, pushed the tub up against the wall and moved all the plumbing over and put a window. And by doing that, we added 7 showerheads in the soaker tub and it turns into a steam room. It killed on the open houses. Like people were taking pictures of it. They were standing inside of it. We literally had people wanting to shower in there to try it. They were like, I want to work, right? And I'm like, no, you can't. You can't. You got clothes on. Get out of there. You got to do it. Can only be negative. So, um, but, uh, as, as popular as that property was for us, um, uh, in general, um, you know, we were able to— going back and looking at this area, uh, where we were at, uh, this, this is a, uh, an area that's build— just blowing up right now. So there's not really any more grass lots out here, and all these houses are actually getting scraped and rebuilt. So had I opportunity to go back and redo this, that's what I would have done. I, again, I sold it to have the money to go in the back and do the back. But this is a land hack. This is how you hack land, right? And if you heard, I sold it 3 times but stayed attached to it. And how did I stay attached to it? I made the buyer include me in the equity and then made him feel like he was getting it at a discounted price. So because originally I was selling all 3 lots for— it was $375,000. I gave it to him for $300,000 and then right away turned around and gave him his $300,000 back for the, for the 2 lots that I sold cash. So just working those deals and I stayed, I stayed partner with this guy because I had the general contractor's license. This guy did not have a general contractor's license right here, so everything we did on these two jobs went under my license. So, um, it just was what it was. We actually had it set up where the houses were going to face this road, and, and just a funny note, the, the, the, uh, county said, um, nope, they can't face that way, uh, you're gonna have to put in a new road. So this is literally a dedicated county road between these two houses because of the fact that the county refused to let me face them the other direction.

That doesn't make sense. Like, why?

I don't know. I don't know.

So, Tommy, is that access for the driveway for all 3 properties? Is that also a county road?

This one is not. It's a private drive. It's an easement. But this is a county road in the middle of nowhere.

That is awesome. So, you know, if I've been up in the Northeast, I would ask, who's plowing that?

You know, right, right, right. I mean, well, and, and what's funny is because what happened, and you can kind of see it over here, this road goes all the way through. So this one, this road here is supposed to be the same. And so, um, and, and so you can see all of these houses face the, the, the, the, the same direction going this way, but their driveways come from the side. And I refused to have my driveway come from the side. I was like, no, I'm not going to do that.. And so I was like, if I have to face them this direction, you know, can't I just make it a driveway? They said, no, you have to put in a road. So that's how much changed between when this neighbor did it and when I did it. The county was like, whoa, whoa, whoa, wait a minute. Like, we need more tax dollars. Everybody's doing this right now. What are you doing? And so, and, and that's why it got, it got flipped over to that. So it just, uh, horrible, horrible, uh, uh, experience for, for, for builders. And you can see over here, I, I pushed it back here, so now you can see the guy that did my septic tank built that house, and then he built that house, and he owned a giant piece of land back here, and then 6 more. He sold all that, and 6 more were built. 1, 2, 3, 4, 5, and 6 is over there in the corner getting started. So again, like, all these areas blew up after we started development., and we kind of kicked it off and got it going. So, um, uh, just a land hack, you know, for people, um, that are, are looking to figure out how can I build my house. Well, go, go, you know, buy a bigger piece of land than you need, split it up, and, and then sell it, uh, sell it to you, you know, until you get to what you need. So, um, let me see, I want to see if I can track it up here on the on the map because the, uh, images— I think they've gotten around to upgrading and updating everything now. And you can see the path of progress is, is moving into that area with all that they've done now in, in inside of bringing the 303 through here. I'm, I'm just a little bit over from there. It's over, uh, over here on 170, uh Well, there's Citrus. Jackrabbit Trail's right there. We'll slide down to it. Dunlap's right there. Here's our houses right here. Where— oh, where did the house I built go? There it is. So they did a little landscaping up in the front right there. That's the house right there. They didn't do anything in the back. These people haven't done any back landscaping. They haven't done any front landscape either. And this guy still has all the pavers. He went and bought a big block fence. He was going to put up a big block fence before I started, and he never got that done. So, but not much has happened out there since, um, Looks like this imagery is still from 2026, but new houses being built. They got one going there. There, people are still developing out there. Couple right there. And the area is getting, getting more and more populated. So those, these, these green lots are going to get chewed up. You can go out there and probably find them and get, you know, get some, you know, decent land deals going. Um, the guy I bought the property from owns this big green spot, the, the, uh, let me see, the Super Green Spot. He owns the Super Green Spot. So this whole green area right here is owned by the same guy that I bought that from, that house over there from. So getting back out there to try and discover what we can do. The other thing is this guy was my neighbor, or lived across the street like directly like that. He owned a donkey and that donkey woke us up every day, woke us up if anybody was trying to get around. This guy passed away literally like I want to say about 6 months ago and all this land is now available. Family doesn't want nothing to do with it. So these are, these are things you learn. That's why they say, you know, you should do real estate where you're, where you're located at because you can learn these things over time. I mean, I've been out there since 2019. And so what I was able to accomplish right there on that piece, we accomplished over here on this piece. When we did this one, we did all these big fancy houses right here. This is the first million-dollar house right there. And so we built out these 3 right here, and those sold for a lot of money, between $700,000 and $900,000. And then we just kept bouncing around. Going out finding lots and doing the work. So, um, and, and the area— this is why I'm saying the area is expanding. This is a gigantic power node and it distributes a crap ton of power. It actually goes— now it goes all the way to over here. And so they've got a lot of plans out here in this green area to be doing, uh, an extensive amount of, of development in the AI and stuff like that. So with, with how—

for people who might not know about power nodes, what that actually indicates, can you dig into that just a little bit more? Because I think that's super important when you—

so the power nodes are, are legitimately like the, the way you look at infrastructure is roads. Are they 2-lane, 4-lane, 6-lane, 8-lane? Power nodes, are they, are they 1 acre, 5 acre, 10 acre? Like this one, it's a That's a 20-acre site where it went right here. This is a— this is a over— over— this is actually over a 40-acre site because this little green spot, that's 20 acres. And so if I put that green spot on there, I can go 20, 40, 20, 40. So those two sites right there are huge. And then they got this— these are buffer zones. And then they did build this the rest of the way out, but I don't think they put all the power in there. But those— that's where they take the— they bring the power in from Palo Verde, which is the big power station out there, right here. And this is the nuclear power station, and you can see it's the largest solar panel— solar panel-powered nuclear generator in the world. Like, it's a nuclear generator with all these solar panels on it, right? Look at all these freaking solar panels. So it's solar panel farm city out there, and they go for miles, like literally, see how everywhere, um, they send that power back this way and it lands at this power node, which then goes out to all this crap over here and gets— and then it gets expanded on at multiple locations over here. So, but this power node being expanded to the size that it is Um, is just indicative of the area wanting to be— it's going to be a hub more than it's going to be a node. So this will be a power hub where power comes in and is up, you know, leveled up to go out to the masses again. So, going to find my way around here.

That's a really big deal.

Yeah, so there it is. So that right there, if this whole thing becomes a just gigantic power grid And it's going to power a lot of houses. All this green is going to go away. All this green will become subdivisions. Here's an example right here. See these pads ready to go? So they're just waiting for people to come out and buy, start want build and buy a house. So, um, this subdivision's actually been here since the 2006 2008 bubble, uh, bubble crash. Um, and the interesting thing about it is during that time when they did this and it went and it just kind of went static, this company popped up, Calport. It was actually called E&H Sand and Gravel, and E&H Sand and Gravel sold to Calport. But they, they're basically digging out the river bottom. That's why there's a lot of water right there. They're dragging out all the water and pulling out of this area right here some of the best high-quality concrete, uh, mixture that you can get. And they're mixing— they're selling that here at this plant. They're— these are all semi, uh, cement mixers, and this is called a batch plant. They put the— they put the— the product that they dig out of these pools inside of that and sell, sell concrete. Who in the hell wants to live next to that? If you live in one of these cool little houses, not going to want to live next to that.

So yeah, but that's a huge indicator for people who are looking to do land hacking, for them to understand what's coming forward. So it's a, it's, I mean, literally, it's, it's money being literally printed. So if you can look at it through the, the economic lens versus a living there lens, You can see opportunity everywhere.

Well, the other part of this is that State Road 30 is going to be coming right through there. So this is on the path of State Road 30. It's going to be coming down, uh, down in this area here and coming across to get— to get connect 202 and to connect the 303. So up here, these highways are going to extend down all the way into these, these areas right here where you have the industrial parks, you've got industrial buildings being built. And, and again, these are, these are the, the, uh, companies that are doing the land hack themselves on, on, uh, on like large tracts of land. They're buying big tracts of land, building gigantic industrial centers, and then leasing it out to other people. So this whole area right here is just blowing up with industrial property. So living close by to that or developing close by to that is the important part, right?

Yeah.

So, yeah, all these dairies are going out of the way. You've got these distribution centers, you've got Walmart coming in, you've got Amazon in there. So, and it's just going to expand. So they, they again, they're bringing in that highway. SR 30, and it's going to come down here a little bit more because it's going to connect over here to the 85 corridor. So it'll come through here. Truck Parking Club. Interesting.

Truck Parking Club.

Yeah, this is a piece of— this is out by a piece of land I used to own. All this right here.

But it's a club. That's hilarious.

Well, Truck Parking Club, it's a— it's kind of like an Airbnb for truck parking.

Huh.

So you want to know where to go park your truck?

Yeah, more renting dirt, my favorite.

Yep. So you can pay $10 a day, $40 a week, or $75 a month. Wow. We'll leave it at that spot out there. So, and this is their ad for it. So kind of like what we're looking to do out there in Oklahoma, which we got to get with Tracy on that one. I want to talk to her more about it, see what we can do. Yeah. Oh, but yeah, that's all I got for today. The land hack, you know, figure out how to do the land hack. It's important.

Does have anybody have any questions about land hacking? Apparently you explained it well enough.

Probably. So it's another land hack. People out here, they're like, you know what, instead of building a house, let me just park a bunch of trucks. If I bought two lots, that's what I might do. I might build my house on one and have my truck parkers on the other. If I'm a truck driver, I'm gonna park my own truck there. I'm gonna end up offering it to other people too. So, but it's pretty interesting how popular that area is out there for truck parking. So, but anyway, I'm gonna stop my share. Um, oh wait, no, I see Ashley's in here. Let's talk about that deal she brought to the table. Yes, was it yesterday?

Yeah.

Where is that thing?

So I got a hold of the seller. They said they would be open to chatting if you guys wanted to after 2 o'clock today, um, and that those permits have expired.

Yeah, yeah, um, understandably. Um, if they were already in place, uh, that's perfect because then we can always get them re— you know, restarted and, and, and crank it back up again. So, um, well, we can discover a lot of that when we get into the conversation more.

Um, okay.

We've looked at it pretty thoroughly and understand where it's at. So kind of trying to come up with an idea of what they want to do is, is going to be best. So yeah, I appreciate that. Catherine, do you want to work with Ashley on getting that set up?

Yeah, we can coordinate that.

Perfect. So let me jump real quick over to Michael's deal. Or Ashley, did you have anything else to add to your, to your deal? You want to just save it till 2?

Uh, yeah, we can just talk about it then. I was just, you know, they presented it to me as shovel ready and it's not, so I'm a little confused about how that happened. But, and then I'm wondering if the, if it's overvalued without that, you know, getting permits still reinstated and everything takes time. And, you know, so I just want to get some clear answers on it and make sure that everyone's getting a fair deal.

Yeah. And again, like, because the— like I had explained to you yesterday, with the fact that it's not shovel ready, it's, it's technically only, only dirt, right? Since there's no permits, it's just dirt, right? And so without insulting anybody, I mean, there is, there is a lot of significant work done already That has value, no doubt, but it's kind of like there's no value to a birthday cake unless you put the frosting and the candles on it, right? It's just Grandma's shoe leather at that point. Come on, like, we all know the frosting is the good part, right? Um, so yeah, getting them to frost it for us would be good. All right, cool. So we'll hook on to that at 2 o'clock. Uh, this is the, uh, project that I was just sent over this morning. It's a multifamily deal. And I don't typically get into multifamily deals because to me they're boring. And that's just me. Land to me is more exciting. I mean, we just went through talking about how I did that project over there in Buckeye and what that was like for me as a developer. I left out a lot of the good parts. About it. Um, because actually there was, uh, there was a significant amount of drama over there. I got shot on that job. I got ran over by a truck. I killed my dog. There was a lot of bad things that happened out there on that project.

No, no, no, no.

Um, and so yeah, I'm not afraid to talk about it because again, it's like, how do you, how do you recover, or how do you How do you sustain through, through trauma and drama? Um, that job was a significant, uh, a significant trauma drama that you had to survive. So here we go. This is over on 32nd Street. Uh, it's near the 101 and 51. So, uh, it looks like it's a brand new construction out of the ground in 2022. Um, it shows here that they have some, uh, price per unit is about $425,000. It's kind of high. I mean, it is positioned close to Paradise Valley, but it's still a Phoenix, Phoenix address. So until you got that Phoenix vibe, you're— or Scottsdale vibe, you're not quite in that. You're not able to go that route. So it shows here that there's a total of 12 units. So a total of 12 units. Um, and see, shows that their, uh, price per square foot still kind of high, etc. Pro forma cap, uh, year 1 was a 4.9, so they got some financials in there about that. Built in 2023, they're saying. So, and all right, let's roll through it. I didn't see anything else about incomes there yet. So, um, look like clean units, look like big units. Very cool. Now the private patio thing, uh, the cool thing on private patios is now is having your landscaping built right into your patio. Um, I don't know if you've seen anything like that, Michael, but, um, if you come out to Arizona, we'll show it to you. Freaking amazing. Like, they, they're just so— Ashley, you know what I'm talking about? You out here, you seen, you seen like over by Curlin Commons where they're, they're literally landscaping all the way up to the 22nd floor. It's just what the hell.

It looks beautiful.

It's crazy. It does.

Like, uh, like up in the Northeast here, we'll see ivy growing out the, you know.

Yeah, yeah, the ivy. But like, they have full-ass palm trees sitting out their back door. It's like they got a, they got a whole Asiago palm standing next to the back door, you know, 14 stories up. You're like, what if that tree falls? Did the tree want to grow that tall? You know, so, um, let's get through these. Pretty pictures, pretty pictures, pretty pictures, pictures, pretty pictures. Exactly, pretty pictures, pretty pictures. Here's where we're at. So the 17's over here. 51's right here, the 101's over here. So if they were actually on the other side, if they're on the eastern side of the 51, that's the, that's the chosen side. You're not on that side, you're, you're still kind of like you're on the wrong side of the highway, basically. So here's what they're looking at inside of, you know, doing this deal, um, is that they're saying that we'd end up Basically, I don't know why they would run the numbers like that. They're saying that the 2025 cap rate is a 5.6. The NOI is $288,000. Sounding kind of rough to me.

Yeah, it's a little too high. I mean, I don't know that market very well. You're the expert there, but that's Right. Generally speaking, a little on the high side.

Yeah.

Yeah. And so your net income is only about $88,000 a year for a lot of work to keep this thing afloat. So let's go see what Deal Hunter said. Right. We looked at that.

These guys probably built this or bought it from the developer. They're now in their 4th year or so of their loan and have to—

they're trying to unload. So here is the initial verdict: it's a conditional no-go at 5.1. Yeah, the only way to really look at it as, as it appears is a 4.25 to a 4.5 asking price, right? Yeah, um, because the, the financing at 6.5 interest only is just— it kind of kills the deal.

Yeah.

So seller reported DSCR is 1.45. Eh, maybe.

Why would I— wouldn't do that. I mean, that's, you know, use— you want to put as much, right?

Well, your debt service is only 60% of the deal. They got you pulling 40%. Like, put the debt service where it really exists at 90% equity, not 60% equity.

Right.

So if you put that up where it belongs, totally different ballgame on this deal. Right. So because you're not going to come with 40% equity to this deal and take it down like that, you're not.

Right. Yeah, that's always cheapest, but to a certain point.

Yeah. Again, well, to a point that it makes sense to like, why would you, you know, you're going to double debt on it. It's still you're, you're, you're not going to get the right DSCR on it.

Right.

So they're making it work with the NOI. That's the problem. They have to have a higher equity slug to make it.

Yeah. Because you can see here, like the conventional commercial loan, 55 to 60%. Most of the people that do DSCR loans that I know do 80%. Yeah, right. So at that point, that's where I'm at. Like, it needs to be set at 80%. So work the numbers at the current asking price, but at an 80% loan and 20% equity to the Dale and see what the DSCR score is then so that we can negotiate this properly. And this is the beautiful part about Deal Hunter. Go ahead, Catherine.

I was going to say this is the perfect example of being able to do the numbers and the numbers tell you what to do.

Exactly right.

Like, this is really important.

Well, any DSCR score over 1.2 or 1.25 is going to be a green light, but deal hunter's already smart enough to know, like, wait a minute, you're, you're not getting that great a deal even at a 1.45. It's only 1.45 on 60%, so not good.

Tommy, is it using the financials that the— that's in that offering memorandum? Yeah, probably, which is always suspect.

Yeah, and but they did send me, they did send me a full set of financials, and I do have entire I do have an entire breakdown, which is great because then I'm like, here you go, you know, I can show you. You got a 2.3% COC, cash on cash. That's not worth it. It's, it's a 1.09 on your debt service, which when you're talking to commercial lenders, they want at least a 1.25, right? And so What price supports an 80% more like down here at the, you know, at the, the, the price that we were originally talking about, more like a 4.4, not a 5.1. And so it allows us to come back and negotiate with the guy and be like, at 4.0, at 5.1, it's not doable.

Yeah, no one's going to get a loan for that. But if you brought it down to probably around 70, 75% LTV, you'll probably hit that DCR.

That you need that 1.2, right? At the 4.4 or at the—

I'm curious to see what it would do. I think at the 4.4, that might be a stretch.

Let's do, let's do a 70% LTV. Let's see where it lands in the DSCR range with the $5.1 million asking price. I think there it's probably going to land at your 1.25. But again, yeah, I think that it's still, still an issue based on the fact that the net operating income is still under $100,000 a year. You know, and you don't have enough to pay fees inside of that.

So what's their expense ratio on their financials?

I'm curious. We can find out real quick. And that's the beautiful thing about Deal Hunter is that if you were doing this with just regular ChatGPT, no, no Deal Hunter brain attached to it, we studied this. It does answer some of these questions correctly, but it takes you 5 or 6 prompts to come up with the right answer. Right. And so if you're not an educated investor, you're going to go with what it first told you, right? So this thing actually knows, do not pay more than 10% of ARV on raw land. But if you ask ChatGPT, it's going to go with what it finds out on the internet, which is You want to pay about 50 to 70% ARV. And so if you use an un— you know, an uneducated GPT, that's what you're going to get. So, um, go ahead and build out a, uh, a structure of this at a $4.4 million asking price so that we can make it make more sense. And then we'll see what it comes up with on that side of it. You wanted to know what their expense ratio was.

Yeah, I'm curious. I mean, it's a new property, should be below 40%, right? So that's where they fudged the numbers a little bit to make it work.

Yeah, the DSCR score worked out better that way. Yeah. And it's starting to give us some stress test results and stuff like that. Recommended deal structure. So raising 30% of the equity, pulling 70% of the debt forward. Yeah, so I like that it, it's coming up with all this now. Got a lot of, lot of resources, a lot of value right there. What is the, uh, can you tell from this flyer what the expense ratio is based on, um, the documentation you currently have? What is the cost of, of, uh, operating this business?

And so if it's below 30%, I don't buy it. It's too low.

Yeah, expense ratio 10%. Come on, that's bullshit. Come on, man, are you serious now?

Yeah, come on, man, that's the first numbers I look at because I know they're just— they're—

that's—

you can see.

Yeah, okay, so see, now there's, there's, there's an expert telling you right there. Like me, a land guy, I'm like, I don't know, I don't know what to look at to see if they're full of shit or not, you know. Um, and, and Michael knows exactly how to lift the tail. He's like, hold on, nope, that's full. Good way to put it. I never thought of it that way, that analogy, but that visual was pretty good. Well, Grandpa said you could look a horse in the mouth, but somebody could have brushed his teeth. If you go lift his tail and see if he's full of shit, that's how you figure that out.

Love it.

Yeah, that's, that's Bo. I've never—

that's ridiculous. Grandpa had some crazy ones, man. Knee-high to a short duck. You ever seen a short duck?

A what?

Yeah, my grandpa said— would say, oh, I haven't seen you since you were knee-high to a short duck. Seen you in a while, meaning that like he seen you when you were littler, and he'd say, you— we ain't seen you since you was knee-high to a short duck.

That's funny.

The visual of that, like, leaves you suspended in air for a long time, giving him plenty of time to figure out, like, what you want, what are you doing here. Like, he's gonna come up with his own, you know, his own talk after that. So he's controlling—

Grandpas are funny.

But visualizing a short duck and then where is his knees and like how tall is that and yeah, so But for educational purposes, I mean, if they're calling this a Class A property at a cap of, you know, around 6 or less, they should be— this should be— that expense ratio, I would expect to be somewhere 35 to 40%, I think.

No, absolutely. And then here's the thing, we can— we can— here's the beautiful part, we can put Deal Hunter to work in doing that. It's a, uh, normal expense ratio. It shows right here that the bottom line says a conservative normalized expense ratio is between 25% and 30%. Work the numbers based on that and come back with the fact that it's saying it's a Class A property, but we feel like it's more of a Class B property even though it's brand new. So bring us back an actual offer that makes sense based on the numbers and put it into a format that we can send to the listing agent, because at this point we're not agreeing on very much. 10% expense ratio is way too low. And so now I can prepare myself to go back and negotiate, not only like educated, but like in a proactive way, be like, look, we really want to work together, but here's the, you know, here's where the problems lie. So it's a newer Class B, not a Class A. It's a, it's a 30% operating expense, not a 10%. And so when you start moving these numbers around, the most we can pay for this property is about $4 million. And, and so here's, here's where it also gets, gets kind of funky-dunky is that because they're asking $5.1 and we're going to $3.8, they're going to probably just go with a not even respond. But here's what I want to look at, because I, I want to kind of trip them by the toe. They said, you know, they, they said, how do you catch a tiger by the toe, right? You use a piece of dental floss. So I want to find a little trick here.

What?

How do you catch a tiger by the toe? You use a piece of dental floss.

Okay.

Yeah, you catch a tiger by the toe, he can't do nothing to you. So, um, So what I want to look up here though is this building was built in 2023, so it's had a loan on it for 3, at least 3 years, right? And so their loan's coming due. So let's go see if we can do a little record searching. I want to do a little bit of public record searching and see if there has been anything recorded under the name of the owner of this property in regards to any kind of deed of trust or any kind of, uh, promissory note that was recorded, and when was it recorded. And so even if I can't, uh, if I can't get, um, uh, ChatGPT to produce that, I do know where to go get it.

Um, so, um, I have another call I've got to get on with the account.

We got, we got stuff to get into. This is where I would go. I'd go into the recorder's office and start looking at documents here. And I'm going to pull that owner's name up and I'm going to look for warranty deeds and try to figure out how do they own this property. Right. So anyway, we can deep dive that more later or tomorrow. Ashley, thanks for coming in today. Everyone else, thank you for coming in today. Laura, Michael. Um, Amor, thank everyone for— and Amor, God, you like scared the hell out of me jumping in like that and then see you jump in. Um, but I want to thank everyone for coming in and, and pray that everyone has a wonderful day. So, uh, Heavenly Father, we thank you for the blessing of this day, the blessing of this life, and all the things that we do. And we ask that you continue to take us out into your world to do your will. We ask this in your son's name, and we pray. Amen.

Amen.

Thank you.

Thank you.

Please, everyone was able to come by, and we will see everyone again later on today. We have a 3 o'clock meeting. Hope to see everyone