🦈 Deal Hunter Deal Room – Daily Real Estate Call

catcher. Like, for whatever reason, they felt like I was the key to part of their success, and it was because I was their catcher. I wasn't their coach, you know. And that's what I want the Land Shark Mastermind to be, is the coaching, uh, aspect is removed and the catching aspect is what we do. We're all catchers for each other, right? One of us is going to be better at something else. And so if we just sit there and play catch, that's what makes a good pitcher a good pitcher. Is a good catcher. How do you become a good catcher? By dealing with a lot of pitchers, like not just communication. Well, being able to get pitched from many directions, right? That, like yesterday— and this is going back to what Tracy brought yesterday to the table, and Tracy handled it perfectly. Like nobody— I had somebody literally explode their brain, just split in half, and like they, they turned into a, a Ghostbusters, like, freaking animated character, over the fact that I told them that deal hunter was telling them that their deal was not good, right? Like, they had some sideways movement on their deal and they needed to take a look at it. They literally morphed into that thing that, that, that Rick Moranis changed into in Ghostbusters. If you don't know the movie, you know what you gotta do. Um, so if you don't know the reference, Homework. Um, so give it to yourselves, I don't care. Um, but the, uh, the point being is that, like, Tracy was told, you know, Tracy brought this deal sight unseen basically, and we ran through it and it had a lot of— we were able to punch a lot of holes in it, turn it into Swiss cheese, and say, hey, this is something we need to look at, work on.

That to me is the bonus.

That's the, that's the gift of the Land Shark Mastermind is it's unrelentless. Like Catherine, it has no— it's not worried about your feelings. It's not gonna be like, oh, sorry, sweetie. Like, sure, you got a good deal. Let's try to find an Arabian prince that'll buy this.

So it was really amazing. And when I went and had my 3 o'clock call with the whole team, one of them wasn't able to be there. It ended up being on a phone call because somebody, you know, you know, technology. Anyway, and I basically was able to just say, listen, you know, I appreciate this project that you have and I think it can be successful, but in order for me to raise money for it or to promote it, we've got to tighten up X, Y, and Z. Things have to match. Like, I went through all the things. I said, I want you to prove, prove your budget for me. I don't believe you can feed 10 people a week on $500. If you can, prove it to me. Like, you know what I mean?

All these things.

And they were super appreciative. Because I came at it with a value add, not a this the way it is sucks and I don't want to do it.

Right, right, right.

That's huge because it can be a really good thing. They just need to tighten up their numbers and improve everything, make everything match.

Yeah, right.

You know, that's why they seek us out, because they want expert Advice. They want to do it right. So we can appreciate that.

Yeah.

Yeah. So, and then, so again, to that, like, this is why, why we charge people, because we're trying to justify. We're bringing on salespeople to help us sell these positions in here. And so far, looking at everybody in this room, I don't see anybody else except the note takers.

Um, you all are what we would call the, the, the, the founding members.

Like, however you ended up in here is how you're here. Everybody moving forward is going to have to pay to be here, right? And they're going to have a membership because, um, of the fact that we are, we're trying to put forward all the right things to, um, uh, to do these deals, to start funding these deals, to advertise these deals, to get them in the right people's hands. And to pay some of you people that are working hard. Hold on.

You know what else? Another thing, um, is in the communities, if you have people pay, you know, people are more likely to, to show up. People are more likely to invest in themselves when they've actually put some money towards it. When something is free, they blow it off a lot. And we know, we, we know we're providing value, so it's good.

Yeah, it's really exciting and there's more and more people who want this and I think, man, if I had the opportunity to have this, yeah, it would have been awesome. Well, and it's part of how I, how and why I created, um, uh, well, the Flipping Females.

Yeah. Do I need to find a deal to run or do we have one today?

No, we got one.

That's cool.

The, uh, Katya is going to bring up real quick the email from Dallin. We're going to read that.

Yes. And I also had some discussions with ChatGPT about liens in the first and second position. And it was so funny because I was arguing with it. I'm like, is this how you do it? This is how I think. And it's like, you are confused with this approach. Let me explain. It was funny.

Okay.

That's awesome.

So who won the argument? You or chat?

The chat. But now I understand because I literally wrote— I think it's right here. I'm like, explain in third grade simple terms. Can you please explain the concept of liens, especially how it ties into our property? Yada yada yada.

Nice.

Okay, let me share. Ah, so this is the message that we got from Dallin, basically explaining that Let's see. There's significant concern regarding the new request for the seller to move into a second position lien. To maintain clarity, I want to reiterate the following based on your proposed LOI. So the agreed financial structure, $12 million total, $8 million seller note, um, and at no point in the LOI or the negotiations was a second position provision mentioned or agreed upon.

Upon.

Um, let's see. So, entitlement awareness. The LOI clearly states the buyer's intent is to pursue annexation and rezoning. It was communicated from the outset that existing documentation provided a proof of concept and that the rezoning process would need to be handled by the buyer starting at the beginning. Strategy versus execution. Your stated strategy in the LOI is to position the property for development and secure an interim income-generating use, including truck parking, rather than beginning the immediate vertical construction. So relying on the terms of the signed LOI, the seller has already invested significant time and money with their attorney in drafting a formal purchase and sale agreement that reflects on these terms. The seller is willing to carry the $8 million note. For the agreed 24-month period, but they must remain in first position to secure that interest. Happy to discuss further. So then I discussed with ChatGPT, and it actually sent an email to Tommy and Catherine, and it says, after reviewing more closely, I realized that we're not actually— and let me know if this is accurate or not— so we're not actually in second position in the current structure. We would be the owner and borrower, and the seller is simply the first possession lender on the $8 $1 million note, there isn't a second lien unless we place or introduce another lender. So the real issue isn't that we need to be in first position, it's that we need the flexibility to introduce senior financing or capital in the future if and when the business requires it. So from the seller's perspective, it sounds like they're focusing on maintaining the first position to protect their downside, which makes sense. From our side, the concern is making sure that we don't lock ourselves into a structure that limits our ability to execute, whether that's bringing in capital, repositioning, or exiting efficiently. So given that, I made a conclusion that we should and could accept the seller in first position, but negotiate very strict and clear flexibility around financing, operations, and exit so we still have control.

Okay, so here's where, here's where it gets hairy.

We have to raise, we have to raise the $4 million to get into the note, right?

Yes.

That person wants first position.

Yeah.

So the person that raises the $4 million.

Correct.

And that would be us.

No, no, it's the person we're raising using that money with—

with—

okay, the money. Okay, our investor wants first position for that $4 million.

Gotcha. Okay.

Okay, so they would—

they would want the first position and then the seller would have to take the second?

Okay, correct. And so in what we respond back to Dallin, it is going to be basically that we're not interested in any deal that has the seller in any kind of position where they can take away the property after we've done the work.

Okay.

And so we need to have a first position lien on the $4 million so that way after we get done doing entitlements or anything like that, that the seller cannot immediately invoke a position of superiority or dominance and take away the— and basically foreclose on us after we get all the work done.

Okay.

Gosh, literally giving them first position on that $8 million loan gives them the ability to wait until all the work is done and then say, oh, you guys missed a payment. And then take the land from us.

And we would have no way to fight that.

It'd be years to fight that in court.

Okay. Gotcha.

So I'll just say—

and while they had it, they could still do all the work.

Like, they could literally move on with all— they wouldn't be able to—

we would not be able to stop them from doing anything about it.

So let's run that in your deal hunter. Let's take a look at that real quick.

Is the property owned outright by the seller?

Yep. They don't have a loan on it or position on it. Okay.

Okay. Do you want to dictate?

Yep. I want to build out a case study scenario for the property in question without the first position lien available and the seller giving only agreeing to a first position lien. If the seller agreed to the first position lien, let's build out a case study of what it would look like if we did all of the work to the property to get it ready for vertical construction. What are the chances that the seller could then come back and exercise first lien position and do a foreclosure, uh, lis pendens, or any other action on the property that could forfeit or sacrifice all the work we've done to it. Under, uh, Arizona law, it is understood that a promissory note with a deed of trust for the seller on this in first position risks our position as developers and doing all the work. Is this or is this not correct?

Okay. Yes, the concern is real. If the seller holds a first position deed of trust, then if you default, the seller can foreclose and take the property, including all the improvements. That's correct. However, how it works in simple terms, imagine this: you buy the land, you spend the money, and the seller is still the first position lender. If something goes wrong, like you miss a payment or violate the loan terms or can't refinance in time, the seller can start foreclosure, take the property, and keep all the value created without being reimbursed. Does the Arizona law allow it? Arizona is actually very lender-friendly. Here's the important part. Arizona uses deeds of trust, not mortgages, which means that the seller doesn't need a long court process. They can do a trustee sale for fast foreclosure. So the timeline simplified is that you default, they record a notice of trustee sale, and 90 days later they can sell the property. There's no long court battle required, no redemption period after sale. What is it? I'm gonna butcher this pronunciation, so nobody laugh.

Lis pendens.

Lis pendens.

Okay, you did it.

That's just a public notice of a lawsuit. It doesn't take the property, it just warns others there's a dispute. The real power is the trustee sale. What's the real risk? Let's apply it directly to the deal scenario. You spend $1 to $3 million on entitlements, plans, and improvements. And the seller has an $8 million loan and remains in first position. If you default, the seller can foreclose, take the land, take all the improvements, and you lose the money, work, and upside. So yes, the statement is correct. A first possession seller lien risks our development position. But here's the important nuance: this is normal in development. This risk exists in almost every deal. The difference is professionals manage the risk through structure. What actually causes foreclosure? The seller can't just decide to take it back. They need a default. So common defaults include missed payments, not paying taxes, violating loan terms, and not paying off at maturity. The real risk is, can we meet the loan obligations and exit in time? The seller is not the enemy. They only win by foreclosing if you fail. So risk level: low risk if you structure the deal correctly, have a clear exit, and manage timelines. High risk if there are tight timelines, no refinance plan, heavy upfront spends, and restrictive loan terms. So how do we protect ourselves? Long enough timelines. We may want exit options. No monthly payments. Right now we have accrued interest, which is good. Cure periods. We want time to fix problems before the foreclosure, the ability to refinance and bring in new capital, controlled spending, um, and an exit strategy. So the biggest mistake to avoid is thinking that first position is the problem. The real problem is lack of flexibility plus bad timeline plus overinvestment. Is your concern valid? Yes. Is it a deal killer? No. What matters more? Structure, timeline, execution. Final takeaway: you are now thinking like a real developer. Risk control, downside protection.

Okay, ready?

Yeah. So go for it, Tracy.

I was just going to say, you know, you could also ask the seller if they wanted to just maintain an equity position.

We did that already.

They don't want to. Okay, next.

Number next.

The concern is that we will be needing to raise $6 million to get the project ready for vertical. This includes the $4 million down and $2 million for the soft costs in order for us to get the property correct.

This money will need to be secured in a first lien position by our lending partners. Um, the seller is, um, in a position that they've also said that any liens or any loans that we take have to be approved by them. So they have total control.

And so in order for us to, uh, make sure that there's an equal amount of pressure from both sides, having a first position lien and then Also, being able to restrict our execution with decision-making by the seller is what our big concern is.

So we want to use the first position lien for one of our affiliates that are giving us the money for the $6 million to begin the project.

If the seller's not comfortable with this, this is evidence of the seller wanting to have more control over the development than the developer is able or willing to do, which is probably why they've lost 2 deals already.

And so this needs to be taken into consideration. This is not a very doable deal.

And it is, uh, based on the email that Dallin sent this morning, it's obvious he forgot what we talked about when we were in person. And we can send them the video to remind them that we were not planning to do the standard development that the, uh, current—

the property is currently approved for. We need to do something bigger than what's there, or we need to do something different than multifamily.

And if they did not convey that to the seller, it's obvious that they are, uh, been misinformed. And we probably need to have a clear picture to the seller as to what we plan on doing, because based on Dallin's email, This is not the case because again, we talked to Dallin.

You—

did you watch the video?

Yeah, I told him that we need to do 2 towers or we need to do 1,500 containers. Doing a 6-story multifamily is not going to work. And if he forgot that, then he's, uh, he's going to make me mad and I'm going to cuss.

It's good that we have it on video because I can just reference it.

Like, hey, okay, we can actually turn the video into a transcript.

Yeah, he was, he was told.

So, okay, you're seeing the tension clearly. You need senior capital for $6 million to execute, while the seller wants first position and approval rights. That combo blocks your plan. Below is how to move forward, plus a ready-to-send email. Bam. That's so cool. Reframe the issue. Don't argue first versus second. Stay, we can work with the seller in first position or with senior financing. What matters is a structure that allows us to execute while protecting the seller. This keeps you credible. 3 structures. Structure 1, standstill slash step in. The seller stays first. When you use, use it if the seller is firm on the position, the seller remains first lien on the land note, your $6 million comes in as equity or unsecured junior capital, seller agrees to stand still and won't foreclose for X amount of days while you cure and refinance, seller agrees to notice and cure rights, no approval bottlenecks. And the pros are they preserve their security, keep your flexibility. And the cons is that it's harder to raise if your partners insist on being senior. Structure 2 is limited subordination, the middle path. Use it when there is a best chance to satisfy both sides. The seller agrees to subordinate only up to a cap, for example, a senior loan up to $6 million. Seller remains protected with encreditor agreements, secure rights and use restrictions. So the pros is that it lets your $6 million be in first position and the seller is still protected. Cons is that it requires negotiation, but it's standard in development deals. So finally, the Structure 3: split collateral. Collateral, when to use if subordination is sensitive. Split into A note, senior secured by land, your $6 million, and a B-note seller with defined protections and a clear takeout, or carve out a portion of the site, leasehold air rights for senior financing. This is creative and can preserve the seller's comfort but is more complex and needs careful documents. So non-negotiables: the seller stays first without subordination, we must have permitted financing, no monthly payments, standstill and cure periods, operational freedom, transfer entity flexibility, and clear refinance exit rights. And then here's the email to send to Dallin. Do you guys want me to read that or just, um, look into it after? I just don't want to take too much time. You want me to read it?

It'll take you like a minute.

Okay.

Okay.

Okay. Hey, Dallin, thank you for your note and for laying out the seller's perspective so clearly. We understand the importance of the first position from their side, and we want to approach this in a way that protects their position while still allowing us to execute the plan we outlined. After reviewing internally, the core point for us isn't changing the economics of Option B, it's making sure the structure supports the execution. To move the project through entitlement and positioning, we need to bring in approximately $6 million of capital. In most cases, that capital is structured as senior financing, which is where the tension around the lien position comes in. Rather than framing this as a first versus second position issue, we'd like to focus on a structure that protects the seller and still gives us the flexibility to execute. A few paths that could work include limited subordination, The seller remains protected but allows senior financing up to an agreed cap with intercreditor protections and cure rights. Standstill cure structure where the seller remains in first position with agreed notice and standstill periods. So we have the ability to cure or refinance if needed, along with clear operating flexibility. And finally, structured A/B approach where where we align the capital stack so senior funds are used strictly for entitlement and soft costs with defined protections for the seller. Our goal is to keep the integrity of Option B while aligning the capital stack with what the project actually requires to move forward. We believe there is a way to do that still, to do that, that still gives the seller strong downside protection. If help If helpful, we're happy to walk through how we're thinking about the business plan so there's full clarity on what we're trying to accomplish and why the structure matters. Appreciate your help. Best, Katya.

And so I also wanted to include, um, let's—

here, I'll dictate.

Uh, this email looks terrific. What I want to include is that, uh, I watched the video this morning of the walkthrough, and during the walkthrough, it was clearly described and explained that what it is entitled for currently with 64 units per acre is not what we plan to build because that is not going to be economical for the next 4 years based on our feasibility study of the saturation absorption rate.

Multifamily is not—

standard multifamily or affordable housing and multifamily right there is not a doable option.

So we will walk away based on that information alone and be happy with it. Because during the site visit, we talked about if we weren't interested in doing the deal unless we could build towers or we could do self-storage, a modified hybrid of self-storage with climate-controlled storage container. So I'd like the email to convey that information. And so, because Katya was not there, uh, the video, uh, clearly states this was the case, and, uh, we need that acknowledged. Let's add, uh, okay, never mind. I was also gonna add in there that, like, the site needs to be ran through an environmental study because it was industrial, and there's a high chance that if the environmental study shows that they— there's a site cleanup or that we can't have a family housing complex there, then what?

Do you want to redictate, or do you want me to type it in later?

No, we'll redictate it. Just go ahead and drop straight down to the bottom. The other condition that we are concerned with is that this site will need a Phase 1, Phase 2 environmental study to go from industrial to multifamily. And I want to make sure that the seller has considered the possibility that this site is contaminated in some way, shape, or form. And if it is contaminated, What is their remedy for it? Will they take on the cost of fixing it, and will they be willing to lower their price or, uh, release the terms if that's the case? Add that to the email.

What is it zoned for right now? You said heavy industrial. I think you said it backwards. That's all right, it'll probably pull it.

What'd I say backwards?

Did you say to go from multifamily to industrial is what I thought you said.

I said to go from industrial to multifamily.

Hold on. Let me see if we have that actually, the Phase 1 and Phase 2. I think we do. Give me a second.

Yeah, they would've needed one.

Is this what you're talking about? Phase 1 ESA? Okay. So yes, we have this information and we have Phase 2.

All right. So before you do anything with that email, let's run this information here and pull that information out of the email. But let's, let's look at what this information says.

We're going to take that over to Free Estimates right there. Have you ever used Free Estimates, Katia?

Say that again.

Have you ever used free estimates?

Yes, we used it once or twice, um, on the podcast.

Okay. No, you got to look for my name, so keep going down. The other day it was on page 2.

It's here.

Okay, so do you want me to download all of these and then put it in there?

Yeah.

Okay.

And phase 2?

Yes, because the other thing is, is if they, if they did have a contamination, it was a scrapyard. They had, they had cars on the ground out there, right?

Right. So it's a high likelihood.

There's a high likelihood they spilled fuel and fluid fluid on the ground, especially what we just went through with the data center. Yeah. So you know what I'd really like is I'd really like it if somebody, um, liked us enough here in Club Scottsdale, uh, since we're filming here every day, like, come by and bring us some food. Like, we'll, we'll, we'll talk great about you all day if you bring us some food.

I think that's called DoorDash.

I told you already to tell me where you were tomorrow, Tommy, that I would come by there.

DoorDash is money.

Are you coming to Club Scottsdale tomorrow?

I fly in at 9:10. Just tell me where it is in relationship to the airport and I'll be there.

Okay, where are you going? Where are you going from the airport?

Where are you going after the airport? Where are you supposed to be headed?

We have to pick up some, um, some, uh, some of our people have backpacks, like pre-packed backpacks that they're picking up. We're picking it up for them. And then we've got a little bit of time, then we're headed to Sedona. We're gonna do an afternoon hike in Sedona and stay up there.

You could swing by here. Yeah, come see the club.

Yeah, yeah. I just wanted to make sure you weren't like having to backtrack or go out of your way.

We're on our—

oh no, we're on your way to Sedona. So perfect.

Hey, everything is downloaded. So do you want me to dictate?

All right.

How were you able to slide back and forth like that?

You need to teach Catherine and I how to do that.

Oh, you just put two fingers and then you go like this. You just move it like that.

Oh, okay.

We actually have to delete stuff and go back and check.

Yes.

Oh, really? No, two finger, a two-finger slide.

All right. All right, so let's go ahead and run an analysis on all these reports so we understand what this is, what is the consideration here on this property with the Phase 1, Phase 2 environmental reports. Review all these documents and give me a breakdown, a solid breakdown, so we understand our position here on this property. And so it's going to take a little while to do that because these, these reports ain't little. Um, and I think it's going to take a little bit of a minute to get cutting through that. Um, so let's jump over to Laura. Laura looks like she's deep in thought.

I want to No, I'm working on other stuff. Go to somebody else.

Yeah.

Yeah. Yeah. Yeah. So, no, no, no. I was just wanting to know about the Avesta documents.

It's been sent back over to Avesta and they're doing another review and gonna send it back.

And I noticed you had a bunch of questions, so I don't know if you got answers to your questions. It didn't seem like it. But I sent you an email. I copied you on the email I sent over.

Okay. So yeah, I just wanted to see if we could jump on a call with them because I wanted to hand— I would like to hand Michael Hughes like a draft of that disclosure today, you know, and be like, here. And I've also got it set up where John Coletta is going to take a look at the Titan 23 EPM and the disclosures. But I want to have two disclosures for him so it makes sense.

Right, right.

So what do we got? It says that it went through it, the geotechnical report. Bottom line, it says right there, this is not a clean dirt, easy pad-ready site. The report supports a position that the property is developable, but it carries real environmental and geotechnical risk that should be underwritten in pricing, design schedule, and closing conditions. The biggest issue is that just, uh, just historic UST. It is that the Phase 2 found actual soil contamination and vapor impacts across the site, and the geotech found loose undocumented fill, collapsible soils. Yeah, there was a, there was a sinkhole on the site out there, by the way. Oh, the pro— the building in the back is sinking into the ground. So, um, so let's go ahead and Click on the bottom down there. I don't even want to read the rest.

Still going.

I'm pissed off. I don't even want to read the rest of it.

Okay, go for it.

We're gonna read, uh, we're gonna write an email to Dallin, the, uh, broker on this deal, and I want to reference this, uh, report and let them know that having a multi-family development here is going to be costly and expensive. So can you do a quick rundown of what all of this would probably cost? To be able to do development out there on this property. And then we're just going to put in there that based on our due diligence, we already know that there's an extensive amount of soil remediation that has to occur. We're going to go back and put that in.

Okay.

So wait till you see how much it's going to cost. Hey, how you doing?

Um, hey, it went through. They're set up. It's paid.

Okay. Who? What?

For what we talked about this morning.

Okay, cool. So look at that.

Vapor mitigation alone could be $800,000.

Okay, yeah.

So earthwork over excavation estimated cost $1.5 to $3 million. Foundation system upgrade, $2 to $5 million premium for a project this size. Soft cost environmental and engineering drag, $250 to $750K. Total would be around $4 to $10 million.

Just to do the remediation on the site. Wow.

So that's added.

So go ahead and let's, let's read what it said here to Dallin. And what I'll do is I'll have you just copy this, take it over to the other email, and we combine those two emails and send it back to Dallin and say we're not interested in anything with this that has the seller in first position. Based on this information.

Okay, you can dictate. Ready, set, go.

So we just did a short, uh, study on the environmental and realized that there's going to be between $4 and $10 million worth of remediation that has to occur, um, and that's not going to happen with the sellers being in a first position lien. Um, they're fully aware of the condition of the soil and it was never discussed in person So we're really surprised at how the brokerage handles this without conveying it in any kind of advertising. So at this point, we're going to rescind our letter of intent based on evidence found in the due diligence report that they knew full well of. And so let's write an email stating that this is the— this is why we're not willing to entertain a first position lien with the seller. And as a matter of fact, we're changing our mind and our price based on the information that we've discovered in our due diligence process. If they're interested in hearing our new price and new offer, they should give us a call.

So that's interesting. That now makes— that makes me wonder if that's why the other two sales fell out.

As a matter of fact, can you get me Galen's phone number right now?

I'm gonna call him right now.

That's so scary. Okay, take a deep breath first.

Everybody—

yeah, I did. I counted it. I counted to 10.

Do it again.

Just here to help.

Just here to help.

Done. Give me the number 1 through 10.

I'll do it again.

Um, so do we have— if you got that one's number, let's get that out. My ears are hot.

I just sent you that.

I know.

I just sent that ear turn red.

Let's do some cortisol rubbing of the ears. Bring it down.

Lord, put a watch guard over our mouth, lest we sin with you with our lips.

Tracy, you said ours. I don't know.

My brain don't know ours.

You better say Tommy D. Okay, please help Tommy.

Please help Tommy remember the the, uh, the devotional he read this morning.

Yeah.

Oh, you ready, you guys? All right, you guys ready for that one?

Because that one— that—

if you want me to remember that one, Trevor, you asked for the wrong damn thing because we're gonna find out right now.

Wrong devotional today, bro.

You have no clue what you just asked for on that one.

Mommy, it says the tone matters a lot. Factual and professional, not accusatory and emotional. It already knows. This is your brain. Listen, listen to yourself.

Wow, it's like it knows you or something.

Wow.

So preserve credibility and keep the door open.

That's right.

Good memory.

Who here knows the Book of Obadiah?

Obadiah, one of the forgotten books. I know, right?

Uh-huh. It's forgotten for a reason.

Yep, yep.

Okay, so if you don't know Obadiah, go read Obadiah 1 through 21 and you'll find out why God's okay with me being a little bit about it.

Speaking of that, I have the most amazing leadership Bible study that I've been doing. Oh my God, I can't wait to share it with you all. It's off.

I love how Kathy is gatekeeping this phone number.

I'm about to go find it myself.

I sent it. I texted you.

Where is the phone number?

Everybody's afraid. That should say something.

Do you want me to send it to your WhatsApp as well?

No, I'm good.

He's got it.

She's like, she's putting it everywhere right now.

He's available after 2 today.

All right, I'm gonna call him right now. It's 2 o'clock somewhere. That was a while.

Good news is that thing went through. You can turn on the salespeople.

We're doing it for all the leads. Send them the message already. Send them the message already.

Yeah, go ahead and read that out. Go ahead and read that out.

Let's take a look at it.

Dellen, hey, how you doing? This Tommy D. I'm doing good. How are you doing today?

Doing all right.

So, um, I got your, uh, we went over your email, and so I'm sure you guys are aware that the soil out there has got to be remediated, right?

Yeah.

Okay. Right, right, right. So, and this is where I'm kind of confused as to like, how does the seller anticipate us getting all that done with them being in first position? Does he want us to come up with our own $10 million to do this work or what?

Yeah, what it costs and what needs to be done. I mean, I, the, uh, I don't— I— yeah, yeah, they expect you to, uh, figure out whatever you need to there.

Well, that makes sense.

No, and that's, that's the offer that was received, and it's like, hey, yeah, no.

Yeah, well, it's got to be carried under the right pretense because I'm not going to put $10 million into it, um, just for them to receive the benefit from that.

So we're not available to that at all. Yeah, so yeah, we're gonna—

we're— go ahead, go ahead and scratch our LOI off. We're not interested, uh, if they're not willing to understand we have to raise capital to do the work out there they're not able to do.

Yeah, I mean, Tommy, you got to take some ownership here, bud. That should have been disclosed up front when you tell somebody, hey, I need you to carry the note And here it is. I mean, between first position and second position, that's a— if it doesn't say second position, there's no reason somebody's going to think it's going to be second position.

Well, and I think that there's— I think that maybe, maybe we can discuss this with the Arizona Realtors Board about the fact that you guys don't have any disclosure in your advertising. By law, you have to advertise that the site's dirty, and you're advertising it as multifamily. So maybe we can have a conversation with the realtor board about your lack of disclosure in your advertising.

Tommy, you got the environmental.

I know I got the environmental, but you advertise it as a site. Hold on, Alan.

You advertise it as a site for multifamily and that it has multifamily work on it, correct?

Yeah. And so you have to disclose the dirty. You didn't do that. You're advertising— your advertising doesn't do that, Dellen.

Tommy, we've done everything we can to be upfront with you guys and forward.

All right, so I've got the call. Listen, I've got all the calls recorded, Dellen. I'm just saying that I'm going to probably contact my attorney right now to go ahead and let them know that I want to file a legal charge against you guys for, for your advertising infraction. I'm going to file a, a formal complaint against you for having a dirty site and advertising it as a multi-family. Tommy, do you understand? No, this is— that is the way I'm going to go. You guys are dirty. You guys are dirty brokers. You guys are dirty brokers. And I'm going to reach out to the seller over the head, above your head, and let them know you guys are doing a disservice and you need to find new brokers because you guys are trash. You're trash, Alan. Now in your trap— no, I'm 100% going that direction because this is— this has been a huge waste of time and it could have been resolved with a very one simple line. This site needs soil remediation and you fail to put it in there, and that's, that's an infraction, okay? So don't tell me that my, my LOI was missing information about first and second position liens when you flat out broke the law, sir. Tommy, but you flat out broke the law. Don't be a hypocrite. You flat out broke the law, Tommy. Yelling, yelling. We reviewed it and that's why we structured it. We structured it in a way for us to get, get the, the soil clean and the dirt clean. This is what we structured it for, was so that we could first position, lean our, our way into cleaning up the site and getting it ready for what you positioned it for. So again, it's, it's not abnormal for the, for the note holder to be a subordinate lien holder, especially when there's $10 million worth of dirt work to be done.

Yeah.

Okay. And so your seller is either, either not being, uh, fair, or you're being very, uh, very unprofessional in not having direct conversation with them and speaking on their behalf. And, and to be honest with you, Dallin, You pissed me off when you, when you sit there and tell me that we did something wrong and I need to take ownership. You didn't disclose shit in your advertising that needed to be in there, and I'm going to pursue making sure you do that because I'm teaching people how to do good real estate, and you're an example of a real shitty case of lying and cheating to try and get a deal. Okay, so again, the environmental— you knew fair— you knew farewell that there's over $5 million worth of work that needs to be be done. You know it very well, and it should be in your advertising. By law, it needs to be. You most certainly do know what it costs. You had two other people in on this deal. They would have told you. And so again, with the fact that you're declaring you don't know the price of, of dirt work, declares to me that you're a horrible broker. You don't know what the hell you're doing. You say you're a multi-family syndicate. You can't build multifamily on a dirty site, sir.

Is there anything productive you'd like to get done?

Absolutely. I'd like for you to quit your job and go work at McDonald's because that's the amount of education that you portrayed to me in the ability to do any kind of land brokering. You suck at being a land broker, Dallin. Go quit your job and go find a job at a kiosk in a mall and sell fucking sunglasses, sir. Done. He messed up when he told me I needed to own something, did he or did he not?

No, he did. Yeah.

Okay, good.

That was in— that was uncool.

So this, this legally—

so legally they have to legally—

and I'm, I'm a licensed real estate broker, retired. If I put— if I put advertising out there that I can do multifamily on something and it was an industrial site with dirty, dirty results, 100% my responsibility as a broker to put that in. And you can, you can go type it up, go, go put it in ChatGPT right now and say, is it legal to not disclose contaminated waste on a, on a site in the advertising of it for sale?

Contaminated what?

Contaminated soil.

Here, do the dictation. And yeah, there you go. Go ahead.

When trying to advertise a property for sale to multifamily.

In it. There you go. Boom.

Because again, this is, this is where you have to know the rules, right? Short answer: sometimes yes, sometimes no, right? What counts as material fact? Contaminated soil is 100% material fact because it affects value, blah, blah, blah, blah, blah. Okay, and it says right there, the seller knows about contamination, they generally have a duty to disclose it. But here's the important distinction, okay? Legal reality, especially in commercial deals— commercial real estate is treated differently than residential. In commercial deals, buyers are expected to do their own due diligence, which we did. Disclosure requirements are less strict than residential, which is true. Potential legal action? None. Like we can't do anything legally, but I can go into what is known as the court of public opinion, and I can say these people claim to be multifamily experts and now are selling property that has contaminated soil and sinkholes in it, and they are unable to convey that to the seller in their, in their, uh, ability to negotiate price. There was two bad deals right there. Like, so we found I guarantee this is why the other two deals walked away. And I asked both of them, why did they walk away? Oh, COVID.

Yeah, so we— yeah, right, they're lying.

So again, this is how you find liars and bullshit, uh, bullshit artists. Okay, so, um, we, we went through— it was so— I'm so glad that we did have that. We went through it and we found it. Because again, like them getting hung up on first position lien was a red flag. Like if they're so secure, this property's in that great a position to move, why would they not take a second position lien?

Yeah.

You know, the first position lien. Yeah. It's, it's traditional, but that's if we're bringing only having to bring $4 million. I knew we needed to bring money to clean up that site and get it ready.

So this is why it's super important to have the who's that know how on your team who have been there and done that before. Because this, again, had we not caught this, this easily would have been a $10 million mistake.

Huge.

And, and we would have had to eat it. Like, they transferred all the responsibility to us on that environmental.

Boom.

Ready for this? Go click that button down there. Here's another thing. With the site being contaminated as it is, is it possible to get financing on it through the EPA's rules about financing property with dirty soil?

No, we just went through this, um, but I'm pretty darn sure that there's not one bank in the world that'll finance it.

But the way that most people think, yes, but the finance— how many land— but you must structure it correctly, and traditional lenders alone usually won't do it.

Oh, I could mess them up right there. I could declare that a brownfield site and they'll never be able to build on it.

So we'd need to get grants, have cleanup program. We would never get the money for this.

They would never raise the money for this.

That's, that's—

so this will never— this site will never be—

it will never be—

it will never be a multi-family development.

Ever, ever.

So, wow, wow.

And the advertising everywhere is multifamily, multifamily ready.

Yep, yep, yep.

And so this, this is why I want to put videos out for people.

Like, I was thinking about this on the way in and this solidifies it because I really, I was really excited about doing this deal.

I was really excited about it.

Here's what I know.

I just discovered that somebody that went through the Grant Cardone 10X program Um, went out of business.

So Grant Cardone has his 10X program, and this guy was a, um, trades, trades company, a service company.

I'm not going to say which kind because, you know, it gets into too much that way. I'll say this, he was a plumbing, plumbing.

I won't say the company.

He's a plumbing company.

Plumbing company was making between $3 million, $4 million gross revenue a year. And this goes to my Contractor Scale Up, right?

Contractor Scale Up is set up to go from $100,000 to $1 million, $1 million to $3 million, $3 million to $10 million, $10 million and above, right? And this is the plan that I gave Brandon Dawson and Grant Cardone's team in the Cardone Ventures building during a private closed-door meeting with them. And they turned it around and turned it into 10x plumbing, 10x HVAC, 10x whatever, right? So somebody I know in the plumbing industry went and paid for the Grant Cardone 10x deal and he paid $500,000 and he was supposed to 10x his 3 or 4 million gross revenue to get to a $30, $40 million gross revenue. It's been 4 years.

I've known the guy 6 years, but in 4 years and he's out of business, 100% out of business, lost everything.

And I was like, what happened, dude?

And he's like, when I got there, they told me I was doing everything wrong and how I needed to forget everything I learned to get here, and they needed me to do all these other things—

become a social media guy, become a content provider, do all this, do all that, and, and fire these people and hire these people.

And my quality went down and They blamed it on me. They kept blaming me for the things that were happening instead of saying their system sucked.

And I go, goddamn, man, that sucks. I'm sorry to hear that.

And what I realized was they were trying to 3x or 10x a $3 million, $4 million company, like when the guy just simply wanted to get above $10 million. But they painted the picture to him, oh, we'll get you $30 million for plumbing. Do you know what you gotta be to do $30 million, $40 million in revenue a year as a plumbing company. You know how many toilets you gotta swab? Like, you— and that's the other part, like, they told him to take on like pump trucks and, and do stuff he was not an expert at at all. And they're like trying to convince him to consume other companies that are doing it so that he could just be the dominant— just dominate the entire market. And it's like, yeah, you can— you gotta have a lot of money though, like You got to have a lot of money to dominate a market, right?

And it's important.

Anyway, he got sold a bag of goods and it ended up costing him his entire business and his marriage.

Divorced now.

Um, and it's sad, but I blame, I blame Grant Cardone. I wish there was legality for that.

I wish somebody could say, I'm suing you for the damage that you caused my life.

But it, it, again, this comes back to do your due diligence. And so that's why I almost want to start a YouTube channel or something that's like calling people out on their shit.

Like, we had this, this crew, uh, Monday's podcast was interrupted because of some jackass that had a party here on Friday night, trashed the place next door.

The owner from next door came over here and interrupted our podcast and cussed us out. Do you think I let that guy Friday night off the hook? No, I called him straight out. I'm like, bro, we're good. I don't need no more of your shit. Don't invite me to none—

no more of your stuff. I ain't interested.

Oh, well, I didn't take you as a judgmental person. Listen here, crackerhead, like, you got salt for brains because literally, like, I had my podcast interrupted by the event you threw on Friday night. And then he immediately went to, well, that wasn't my event.

Even though they invited—

even though they invited us and said it was their event, and on social media they're declaring the event was there. So like, again, how do you say it wasn't your event when it's all that? So again, backpedal, backpedal, backpedal, right, right, right. And then not only that, he's like, well, we still feel like there's an opportunity to do business with you guys, we can boost you guys up. I never went and looked at their social media accounts to understand that I have more friends on my Facebook, third Facebook account, than they have across all their social media.

And they're, they're supposed to be the ones that bring the experts, the, you know, bring—

they're the experts in bringing people to social media. So it's like, what? How's that possible? Anyway, Katya, I'm sorry, I, I had to rip Dallin a new one, especially after he said I needed to own something. Um, these are boundaries that I have. When people backpedal and don't take their business seriously, I will climb all the way up in you and, and, and force you to think about your life.

Like, do you understand this was a $10 million nightmare that we literally saved from?

But again, I think it's also important that if you don't call—

again, I think go read Obadiah. That's all I can say.

I read Obadiah this morning.

It flat out doesn't put— it's like God's fury.

You think you can be safe on top of a mountain and living with the eagles?

Not when the thieves come, baby. Not when the thieves come. So thieves leave grapes for the poor.

What God did to Obadiah— or, or not to Obadiah, but to Edom—

And on behalf of—

oh boy.

Yeah, so I believe God's got me here, gave me this tongue, and I appreciate the prayer this morning, Tracy. I apologize, God didn't listen, um, but he did his best.

He tried. And I did, I did my best not to cuss.

I let one half-word fly and then I knew I had to hang up. Yeah, so, uh, one half-barn was all I could handle. But again, I think it's important that we call people out just as much as we show people how to get into good deals.

You got to show people how to get out of bad situations.

Yeah.

And when you got a broker that's like that, here's what I know. Dallin's never going to call me again. And the other thing I know, Dallin's never, ever going to treat me that way again.

He's never going to walk a site with me and be a dumbass.

That guy was flat dumbass. He walked that whole site with us. The video was there.

Did he mention anything during the walkthrough?

Not a word.

None.

Nothing about—

no, no, no, no.

That's unethical. It may not be illegal, but it is 100% immoral and unethical.

Okay.

And so I will be filing a formal ethical complaint against him with the— with every association known to man when it comes to real estate and business. I am actually going to call his boss.

And let him know that he's being unethical.

Well, the seller needs to know, and I'm going to call the seller and tell them they're out. I want to do a deal. If you'd want to do a deal, you got to fire your broker because I'll challenge Dallin and his brokerage to a damn court battle now, 100%.

100%.

Take me to court for going over your head.

I dare you.

So your homework now, Katya, if you want to do this deal, fire find that seller and get his phone number.

Okay, I'll do it. I'll do it tomorrow.

Sounds good.

His daughter's running the deal. I do remember them saying that the daughter— so the daughter is running the—

the daughter is involved. And you can tell them that Dallin lied to us. This is why we're backing out of the deal. It's not because we don't have the money or the time.

It's 100% that Dallin and his people lied to us.

I'll do the talking. If you want.

But Dallin has 5 kids.

I don't—

I— you know what? Here's what I know about brokers. They're brokers because they're broke all the time. Okay, I quit following brokers. No, they are, because the only way they know how to make money is by hiring people to do their job. If a broker could do their damn job, they wouldn't need agents. So they hire agents to do their job because the broker likes to sit back, play, play his computer and go play golf. He likes to play his gambling machine on the computer. They don't sell land anymore. Once they get over 10 agents, they never sell a piece of real estate ever again. Why would you? Why would you need to? You have 10 people supplying you with a pick every month. I might be a— I might be a retired—

I might be a retired agent, and I know some brokers, but I know good brokers.

I know brokers that go the mile.

They will 100% never let, like, let this happen.

So, because they won't, they won't advertise something as multifamily when it's not, especially if the deal fell through twice. I need to find out who had those deals too. I'd love to find out who had those deals so I can contact them and see if they quit for the same reason we did.

Anyway, okay, anyway, good to know. Okay. Prayer. Oh, given this is like heated, I'm gonna say that was interesting and entertaining and learned a lot. Uh, if we had the information up front, it would have been a very different conversation. Oh yeah, the whole thing.

And I said, this ain't multifamily, guys. We're not doing $10 million. If we're doing $10 million worth of dirt work, we're gonna do that, and then your seller can have clean. Like, because I would have never even offered to do $4 million. I'd have said, I'll come out and do the dirt work and we'll do an Ovation loan.

It's the only way I'm doing it.

Yeah.

And we would be responsible for the work, they're responsible for the land.

Done.

And if geotech said that we couldn't do it because it was too soft—

I mean, I knew I was by the river, but I assumed it was pretty solid, you know. So, but it isn't. It's got a sinkhole up in the top corner where they built the one building. So again, these are just—

I'm— I—

he should have disclosed all of this, even at like— especially during the walkthrough.

At the walkthrough is the best place to say it, because like, again, you don't go to— and, and they're relying on the fact that this is commercial property and they don't—

they're, they're saying they don't have to because you have to do your own due diligence.

Absolutely.

But when it affects the value of the property, it must be disclosed.

It's an ethical concern. Yeah, so a dirty site is not— you cannot sell a dirty site, okay? But not for full price.

We need to go, so we got to get Michael on the leads and stuff down.

Yep. All right, everybody, thank you for coming in today. Heavenly Father, we thank you for the blessing of this day.

Uh, bless Dallin and his children. May they grow up to not be his retard. In your name we pray. Amen.

Amen.

That's all I got.

So, so, oh my word, mad.

God knows I'm mad.

Oh yes, uh, yes, righteous anger is good anger.

So, uh, and, and again, homework now, Katya. Find that— find us that seller. Find us that seller and we're going over their head. We're going through the back door.

Find more deals.

No, I want this one now. I want this one though.

Wait, you still, you still want it? What do you mean you still want it?

Yeah, because again, well, it could be industrial. Hold on, it can be industrial. It can be 100% industrial. It doesn't have to be multifamily, but it isn't worth, it isn't worth $12 million, ain't worth $9 million, ain't worth $6 million. It is literally worth $1 million dirty. Yeah, if they're lucky. Yeah, it's $1 million if they're lucky.

Yeah.

So there's, there's between $6 and $10 million worth of work that needs to be done to the site to get it ready for sale.

So that's why they haven't done it yet.

Right. So again, if we offer to do the work for them and then sell it clean or convert it in, because we don't have to clean up the site if it stays industrial.

Okay.

We don't, but we can't, we won't be able to get a loan on it.

Yeah.

So we won't be able to get a loan on it until it's clean.

Gotcha. Okay.

Okay.

Sounds good. Sorry about bringing the additional tension to the pot.

Oh no. It's perfect.

No problem. Ain't nothing to be sorry about. You don't have to apologize for nothing. I, I get this way over thieves and criminals. I just do. When you're, when you're, when you're, when you're a liar, cheater, or thief, God has put it in my body to, to flare up. I don't know why.

It's not, it's not me. I don't ask for it.

So I can see your ears from the camera.

Yeah, they're hot. They're like, they're probably up.

Here's the deal, like, this is the importance of due diligence. This is why we dig and dig and dig and dig and dig. We turn over every single stone because you never know what's under every stone.

We—

you, you must, must, must. We trust and verify, verify, verify, verify, verify, like everything, because otherwise it becomes your problem. Yes.

Yep.

Okay, it's your fault, you didn't figure it out.

They're like, so yeah, peace out.

Again, This is why the value of Deal Hunter free estimates. We keep digging and digging and digging every deal we do this because at the end of the day, when it comes to the whole thing, we protect the investor's money. And if we had not caught that, and the investor's money was gone, like, that is 100% our fault.

Well, that The other side of this is protecting the investors' money.

The investors are also the landowners. The landowners are currently holding on to property they don't know has no value.

Dallin has lied to them and said, oh yeah, this, you know, we'll get it sold for you. Don't worry about cleaning it up. And that's a lie.

So I, again, I have to call them out on that.

So it's not so much that I want to continue to try to buy the property. I need to inform the landowners that they're dealing with somebody who's lying to them, because you cannot sell that property in the condition it's in.

So that's what I'm after.

Anyway, we're wrapping up.

She's got most of this stuff closed up. Everybody, I'll see everybody tomorrow.

It's Friday, guys.

Bye.