A Quick Guide to Land Use, Planning, and Developments with Mike Marshall

You're listening to Crazy Shit in Real Estate. You'll be amazed at all these wild but true situations that others have found themselves in, because on this show you'll hear uncensored, unbelievable stories from the world of real estate. I'm Leigh Brown. Let's dive right in. I'm Leigh Brown. This is Crazy Shit in Real Estate. Today we're going to talk to Mike Marshall. We'll talk about land use, land, and oddly enough, the McRib sandwich. Enjoy the conversation. I'll see you on the other outside. Hello, Mike.

Hi, how are you?

How are you doing?

Very good, thanks so much.

Hello, thank you for coming on the show, even though I think I see a Notre Dame sweatshirt there.

Yeah, I'm sorry if it's offensive.

They're just not committed. I just have an issue with the fact that the ACC let Notre Dame in, but only for basketball and not for football. That was a terrible decision.

Yeah, I know what you mean. I actually agree with you.

But also, I went to Florida State, so I've got a little bit of a beef because back in the day, that was the Bobby Bowden, Lou Holtz rivalry. Yeah, wish we still had some good rivalries, but they're fading in the NIL world. But that's a whole different podcast. All right.

Well, hey, thanks for having me. I really appreciate it.

You got it. So tell my audience a little bit about Mike Marshall. Where are you located? What do you do in and around real estate? Give them a little bit of background.

Yeah, absolutely. It's really not terribly exciting in some respects, but I really came up in the land use and zoning space. I worked in like the zoning departments for multiple jurisdictions, both in California and Texas. And I did that for about 15+ years. And during that time, I worked on everything from like custom single-family homes to 1,200-lot residential subdivisions, medical office buildings, a TV and movie studio campus, all sorts of stuff. But it was all within this space of land use entitlements, you know? And so just like the initial phase of the development process. And so I did that for like 15+ years, started consulting with developers doing different projects around Southern California, eventually moved back to Texas where we're doing the same thing, but we actually have students that we work with as well, trying to help them really capitalize on this whole entitlement process.

And I'm going to guess, just a wild and crazy guess, it's slightly more friendly environment for your work in Texas than in California under today's rules.

Yeah, absolutely. That's so true. I mean, like I tell people, you know, if you can make it in California, you can make it anywhere kind of thing. I think that's fairly true. So yeah, for the most part, it certainly is a lot easier. So nothing really trips me up these days. And they're not going to tell me anything that I haven't heard from California.

I mean, what would you say, in looking at the current climate of land use, and not being in California right now, but I know you keep an eye on it, having been there, what do you think is the least productive rule they're putting in place? And what should they be fixing to do something about the inventory situation, the land use, the water rights issues? There's so many things that are starting to simultaneously happen. Where should California get out of the way, do you think?

I think a lot of it's in, in the regulation, which is really interesting. I mean, I come from that space in that world, but I see both sides of it, and I just think the regulatory aspects of everything is really where it's at. So California specifically, you could look at things like the California Environmental Quality Act that really slows down the processing of projects. If you look at California and other places around the country too, there's such a huge shortage of housing and especially affordable housing that the government needs to get out of the way so they can get units on the ground. In these states, the regulations make it very, very difficult and time kills all deals, right? And so that's what ends up happening. And so they need to be able to do things to streamline the process. And now they're in a reactionary mode rather than a proactive mode. And the regulations that they're putting in place have the potential to really significantly impact existing neighborhoods and communities in really negative ways. And so they're really in a tight situation.

It is kind of fascinating to me how many people have a loud mouth on the internet about the cost of housing and they want somebody to address it, but they look at D.C. and that's not the answer. The problem is at the boots-on-the-ground local level and these regulatory burdens, these permits, all these new overlays, they add so much cost and the public just doesn't understand that it's not greedy developers and greedy builders. It's greedy local government that's causing these problems because the time cost of the money involved in that. I have one parcel under contract here. It's been under contract for 2 years with the builder, and he's been trying to figure out how to get the city of Charlotte to say yes. While the city of Charlotte's in a housing crisis, they cannot figure out how to say yes. And it's astonishing to look at because it's not some oddball infill place. It's not like it's in a sea of concrete. It's a well-placed area at the public municipal water and sewer on good land. And Charlotte's just a regulatory nightmare. And how many families could have gotten in home ownership at the old interest rates if Charlotte had gotten out of the way? And so now you've further driven the gap. So anyway, moving on to Texas, you bring that to one of the hottest growth states in the country. What are you seeing in the trends for development in Texas? Is there an appetite or a movement that's looking to pull to pull the development back? Are you seeing some pushback at this point because of the sheer volume of growth?

Yeah, it's interesting. You know, I happen to live in East Dallas or east of Dallas, and that's probably one of the highest growth areas in DFW. And so it's like if I look at right out my window, what I see is the world is really not what I read about in the newspaper and everything like that. So I see it a little bit differently in that respect. But I think the things that I start seeing as far as what's being successful is really anything that's affordable. There'd be manufactured homes, in some cases even mobile home parks, or even the whole build-to-rent model is really popular here in Texas as well.

I do not like build-to-rent.

I'm not a fan either, truthfully.

If you're not aware, friends, depending on where you are in the country watching this, or if you're a consumer, build-to-rent, we call them BTRs. It's essentially a community that looks like single-family homes, but they're not for purchase. They're only for rent. And one that we have right here in Concord has about 100 homes in it. They're very lovely, traditional two-story houses with little vinyl, a little bit of stone, a little bit of color variation, little cul-de-sacs. And you would never know they're rentals. The problem that I have with them is that, first of all, people who live in a rental just don't have roots in the community. And it's not that they're bad. It's not that when you rent, you're something less than. It's just different than a BTR community is not allowing those people to dial into the community. And second of all, they're not building any financial future for themselves. They are paying rent and the person who owns a whole community is building up the equity. So you find somebody that doesn't feel like they should go buy a home because this rental feels like single family. And I think there's an erosion of the desire for homeownership because of these neighborhoods. And that's just the Leigh Thomas Brown opinion on things. But it's a growing space, I think. I'm, I think it started in Texas or Georgia. Those were the two big states where we've seen it crop up.

Yeah, I'm not sure which one it was. One of those two, though. You're right. It is really popular and for all the reasons that you mentioned. And then at least what I see out here in Texas, I do see a little bit of downgrade of quality of construction or quality of at least the facades and everything like that. So if you're in the business, I think you can look at the two different products and go, okay, that one's BTR and that one's actually fee-for-sale. You can tell the difference. And I think that does have an impact long term in terms of the quality of the community?

I guess I would look at that as the people who build to the code are not necessarily the buildings you want because they are looking where the code is their line, right? To me, code should be the baseline and you want somebody builds above code. And one of the easiest ways to look at that is the sheathing on a new house. Code requires some kind of sheathing. So a cheap, cheap builder will use green board. A good builder looks at green board and says, what? Never. And then they use some kind of good OSB. And so it's just an interesting difference in quality that I don't know that the public is trained to look for. And frankly, I think a lot of real estate professionals are not trained to look for that either. Mike, it's a little frustrating, but the longer you stay in the development and building side, the more you see these differences and they really play out 10 to 20 years into the future.

It's very, very true. You have to have that foresight. You have to be able to look forward. And unfortunately, that's just probably not human nature to begin with, but you have to train yourself to be able to do that.

Oh, I like that perspective, to train yourself to look forward. I think that's something we need to do in 2024 since the year is starting off. I mean, it's January and we've got all these crazy things already happening. Woof! All right. So talk to us a little bit about what you're doing right now, Mike. You said that that is a lot of your past history and you're in a whole new space now. Talk to us a little bit.

Yeah. So a lot of what I do right now is I kind of work with land investors and then also developers. And so people that are really needing to connect, right? So we have people with actual existing assets. That's our land investors, our landowners. And they're oftentimes looking to be able to maximize the value of their property, oftentimes by selling to a developer. But there's a disconnect there. It's an educational disconnect. Then it's also just a networking connection kind of issue too. So a lot of what we do is we go to developers and we determine what their criteria is for what they're looking for. And then we use these folks that we work with, the land investors, to go out there and actually acquire those properties and deliver it to the developers. And so that's a lot of what we're doing right now. So for example, like we have a 200-unit multifamily project in Florida that was a rezoning project. So we'll go in with the land investor, we'll actually rezone the project, and then we'll turn that over to a developer. So our whole model really is bringing it through the entitlement process and then selling it off to a developer. We're not developing it ourselves. We're just basically bringing it just a little bit before that and selling it off to the developer.

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Yeah, absolutely. So we start looking at, okay, well, what markets are going to be favorable for you to be able to endeavor in this? And really one of the things that we look at, and this is with all real estate, everything follows job growth. And so we're looking at job growth first, then we're looking at housing shortage is probably the second thing that we look at. So there's obviously online resources to be able to kind of hone in on those markets, but then we also start looking at the regulatory environment as well. So what areas are going to actually be more in line or more favorable for us? So again, we talked about California, not so much, maybe New York, not so much,. But if you look at like Texas throughout the South, all the way over to the Carolinas, if you're looking at it, just generally speaking, that's a really good place to start to regionally. Then we start narrowing down a little bit further, like I said, regarding job growth markets, housing shortage, etc.

So when you're looking at the land market, where do you see— and obviously you're working in a lot of different areas— where do you see the best opportunity? Is it in buy and hold and large parcels? Is it infill lots? What's your sweet spot right now?

I personally love infill lots for a lot of reasons, just because you have existing infrastructure in place. The lots are already graded out. You have a known quantity. You don't have as much of issues with capacity, delivering utilities. A lot of the stuff that is associated with raw land development, you don't necessarily have all of those things. Now, it's not to say it's all peachy. There are issues for sure. But if all else is equal, I would probably lend more towards that kind of situation. Then also because the zoning will allow for more dense development as well. And so for bang for the buck-wise, you're going to get more out of an infill lot a lot of times than you will out in the other areas.

So where do you find people that are willing to sell their land? Where are you finding these opportunities?

Yeah, we have a few different things. Obviously, a lot of it's broker connections and networking that way. That is certainly the case. But then there's also just new and upcoming platforms that are coming out too. A lot of these AI-backed platforms that are coming out to be able to help us really rein in on really where the development opportunities actually are. So we'll use some of those tools sometimes too, but it's not used predominantly. Predominantly, we really rely on relationships and networking. That's our prime thing that we do. And this takes a lot of time to be able to build that up, but it's about consistent effort. And that's really what we typically go about doing. We're not doing the AI-backed stuff as a means to like try to shortcut anything. It's just more about we want to be able to be informed so that way we're not left out of anything ultimately, I guess.

Okay, well, I mean, I'll take that as an excuse. I can't stand the I and I am not a fan. No, I agree. Okay, so tell us, obviously my show is built around interesting angles of real estate and crazy stories. So I'm dying to know in all your history around real estate and land and land use and being in, of course, Commiefornia, now you're in the free state of Texas, unless you're in the blueberry of Austin, which is not— that's a whole different ballgame there. I'd love to know what you've seen that was just a moment of What exactly am I doing here? Holy crap, I've run into this. We'd love to know the inside Mike story.

Yeah, the best one that I could come up with was I'm at public hearings, so my planning commission, city council hearings, and I'm presenting development projects. And so this was when I was still working for the jurisdiction. So I'm there and I'm presenting a project. Truthfully, don't even remember what the project was at this point. But then there's the public participation section of the whole thing. And at that, you'll get people that'll come up and they'll comment one way or the other about the project. But then you also get some people that are just looking for a place to talk, for lack of a better term. So this lady, this not lady, this girl comes up and she has pink hair cut down to her shoulders and she starts talking about her plight as a family because McDonald's no longer has the McRib offered as part of their menu. So I guess there's this McRib sandwich that they have at McDonald's that's like a seasonal thing or they bring back once in a while or whatever. And I'm sitting there in this mindset of like, okay, I'm thinking about my project. I want to answer questions that people have. I want to be prepared. And this girl starts coming up and talking about how her Thanksgivings with her family are ruined because the McRib sandwich is no longer available. And she's really pleading with the planning commission to do something about bringing this whole thing back. And I just couldn't believe what we were watching. We've never seen anything like this. And this is really at the advent of YouTube becoming really popular. So we weren't really keen to the whole concept that she may be setting this whole thing up. And so she ends up having this 5, 10-minute dialogue about wanting the McRib back. Anyway, it kind of falls on deaf ears. Obviously, nobody knows what to do about it, but it set the whole conversation off where nobody else came up to speak about it again. The whole thing was done, and the project got approved, which was great. But in the meantime, you're sitting here looking at this whole situation like, what world am I in right now? Come to find out, it was kind of like a prank type of thing. Before we knew that, she came back at the next meeting and actually had a song that she sang. You can actually see the video on YouTube. I just checked. It's still up there, the McRib Girl. It's just hilarious. It is one of those those things that you're in the wrong place at the wrong time.

I mean, it's astonishing how far the young people will go for a moment of notoriety on the internet.

Yeah.

And it just irritates me because your Planning and Zoning Commission is primarily volunteers from the community and a couple of pros. They're trying to make thoughtful decisions, and then this idiot walks in the room to get some clicks on the internet and waste your time and energy. And frankly, could derail an opportunity for housing to come into a community. That's insane.

Yes, it's thoroughly disrespectful without any doubt. And just to see how the elected officials are dealing with that, you know, they have to listen to it. They have to give them their 2 minutes or whatever. But they didn't, you know, comment either way about it at that point. But you're right, you know, the absolute disrespect, not really recognizing the significance of the moment. And so, yeah, that was concerning for sure. Well, needless to say, though, they had a sheriff that started coming to the meetings from that point forward to help mitigate those kind of issues.

But they did. And you know what? The fact is we have a mental health crisis in this country and we need to address that.

Yes, ma'am.

But we also need to think about— there's just so many impacts beyond. It's crazy. Plus, I can't wait to go home and tell my husband this because he loves the McRib. Yeah, I don't think he should eat it because it ain't real meat. It's some factory processed crap that's probably killing him. But he'll listen to me when he realizes the McRib could cause your hair to turn pink and cause you to go to planning and zoning and disrupt a hearing.

Have them look it up on YouTube, man.

I'll show them. Oh, I'm totally going to.

Yeah.

I'm not going to do it on my phone because I don't want my phone to think that I'm interested in people that go to prison zoning to talk about Mary. I just can't imagine that you sat there with anything on your face except—

Yeah, that's what it was. I just like, is she going to get to a point? Is this coming to some point or is she just really concerned about this? And she played it off, I guess to her credit, to a degree. She acted it out fairly well, but it was disturbing.

God help us all. The pink-haired, purple-haired, blue-haired people don't generally bring the best and brightest ideas to the table.

No, ma'am, they do not.

Although one of my agents, she did just dye her hair a beautiful shade of lavender, so she's exempt from this because it's very classy looking. So I guess there's different levels of colors there. So Mike, if somebody's interested in learning about the program that you have, finding out more about the land side, some good questions to ask and basically get coached and mentored by you and your company, what's the best way for them to find you on the interwebs and follow up?

Yeah, absolutely. Our website is tolosapropertygroup.com. It's tolosapropertygroup.com. You can find us on Facebook as well. Our Facebook group page is called Forced Appreciation Strategies, and those are the two best places to find us.

Well, that explains the TPG behind you. Now, I was sitting here wondering what it stood for, but obviously it's just your company name. It was nothing really interesting.

No, it wasn't. I've had people guess and stuff. I've even told people it's the name of my kids, and now you just have to kind of guess what those are. But no, it is the company name. You're right.

Well, because I'm middle-aged, I was going to say Thomas, Patricia, and Grayson, but that would obviously not be it.

No, ma'am.

Mike, thank you so much for coming on the show. And by the way, thank you for serving the community through one of the driest but most important areas, which is land use and planning and zoning. I think that's where all of our answers are going to be coming from in the next few years when we have this historic shortage of housing and solutions have to be done by good, smart people who don't eat mac and cheese. So thank you for being here. Those people.

Thank you so much. I appreciate it.

All right, guys, tell Mike something in the comments. Preferably tell him not to ever eat McRib because it's terrible for him, and my husband will have to read those comments too. Subscribe for more, and we'll see you next time over here on Crazy Shit. As always, I'm so super thrilled that you joined in for more crazy shit. And if you're a realtor, investor, inspector, lender, or just a regular human being who happens to have an unbelievable story that you need to tell the world about, or frankly you just need to one-up the story you just heard, then make sure to DM me on Instagram @leithomasbrown or tweet me @leighbrown, or frankly any social network where you hang out. I'm there. And if you had some fun, then you totally want to subscribe so you don't miss out on any future episodes.