WEBVTT 00:00:00.000 --> 00:00:02.220 That's a wrap on season one of Trust the Process 00:00:02.220 --> 00:00:05.160 podcast. Thank you for listening, sharing, and 00:00:05.160 --> 00:00:07.679 sending us your questions and comments. We've 00:00:07.679 --> 00:00:10.060 enjoyed sharing our takeaways with you. The final 00:00:10.060 --> 00:00:12.160 episode of this season is a mashup of all your 00:00:12.160 --> 00:00:14.980 favorite clips from the past year. See you in 00:00:14.980 --> 00:00:20.780 2026 with more builds, stories, and lessons from 00:00:20.780 --> 00:00:29.030 the field. Ever wonder what really happens behind 00:00:29.030 --> 00:00:31.510 the scenes in construction, real estate, and 00:00:31.510 --> 00:00:33.890 development? We pull back the curtain on the 00:00:33.890 --> 00:00:36.329 new home construction industry, the real estate 00:00:36.329 --> 00:00:39.130 market, and the trends shaping it all. Discover 00:00:39.130 --> 00:00:42.109 the stories, insights, and expertise behind the 00:00:42.109 --> 00:00:45.030 process of building a new home. Join us for Trust 00:00:45.030 --> 00:00:47.450 the Process Podcast, and let's build something 00:00:47.450 --> 00:00:49.840 great. together. All luxury homes are custom, 00:00:49.859 --> 00:00:52.159 but not all custom homes are luxury. And I say 00:00:52.159 --> 00:00:54.179 that, I mean, there are some really nice production 00:00:54.179 --> 00:00:56.280 tract homes that you could consider luxury, especially 00:00:56.280 --> 00:00:58.679 in some higher cost markets. Sure. But for the 00:00:58.679 --> 00:01:01.020 most part, you don't have to be in the luxury 00:01:01.020 --> 00:01:02.820 space to be a custom home builder, some rural 00:01:02.820 --> 00:01:05.560 areas and some rural states. You could be building 00:01:05.560 --> 00:01:07.560 in Kansas and maybe you're a custom home builder, 00:01:07.700 --> 00:01:11.040 but your average sales price is $450 ,000. So 00:01:11.040 --> 00:01:13.060 I look at it that way. Something that is not 00:01:13.060 --> 00:01:16.599 being replicated at scale, irresponsible. Water 00:01:16.599 --> 00:01:19.359 management is what equals more water usage. Agriculture 00:01:19.359 --> 00:01:22.379 in an arid, dry climate equals water usage. So 00:01:22.379 --> 00:01:24.500 as long as we know what we're dealing with, I'm 00:01:24.500 --> 00:01:26.500 not advocating to get rid of every farm west 00:01:26.500 --> 00:01:28.099 of the Mississippi, I'm just saying we have to 00:01:28.099 --> 00:01:32.140 acknowledge that the Colorado River is an agricultural 00:01:32.140 --> 00:01:35.099 water supply more than it is anything else. And 00:01:35.099 --> 00:01:38.200 then after that, it's its own vegetation, then 00:01:38.200 --> 00:01:41.540 every city on the Colorado River, and then evaporation. 00:01:41.900 --> 00:01:43.620 It's just crazy to me that that's where the water 00:01:43.620 --> 00:01:47.730 goes. Another kind of Interesting thought and 00:01:47.730 --> 00:01:51.469 this is way down the rabbit hole, but the city 00:01:51.469 --> 00:01:54.390 kind of owns your property too. You're basically 00:01:54.390 --> 00:01:57.209 in business with your city. And if you don't 00:01:57.209 --> 00:01:59.650 think that just stop paying your property taxes 00:01:59.650 --> 00:02:02.689 for a while and that house becomes theirs. So 00:02:02.689 --> 00:02:05.510 really every home that's built the city might 00:02:05.510 --> 00:02:07.629 see as their home. They have a vested interest 00:02:07.629 --> 00:02:10.930 in that home as well. It's their tax base. So 00:02:11.000 --> 00:02:12.800 They might own that house one day, if you're 00:02:12.800 --> 00:02:15.400 not careful. Welcome back to Trust the Process, 00:02:15.819 --> 00:02:19.139 podcast where we talk about real estate, new 00:02:19.139 --> 00:02:22.340 home construction, the housing industry, and 00:02:22.340 --> 00:02:26.300 everything in between. Today, we are going to 00:02:26.300 --> 00:02:30.400 talk about a topic that's a little controversial, 00:02:30.659 --> 00:02:35.789 especially here in the desert, water. I know 00:02:35.789 --> 00:02:38.030 that just stirred a lot of people up right away. 00:02:38.050 --> 00:02:40.590 I can hear them. I can hear the trolls in their 00:02:40.590 --> 00:02:42.289 comments right now. All builders taking all the 00:02:42.289 --> 00:02:44.669 water, building so many homes. And so wanted 00:02:44.669 --> 00:02:47.389 to do a bit of a deep dive on this just so that 00:02:47.389 --> 00:02:51.810 we could sort of lay the foundation for the awareness 00:02:51.810 --> 00:02:54.509 of the water. Obviously there is a conservation 00:02:54.509 --> 00:02:57.150 effort, but some of that and then maybe answer 00:02:57.150 --> 00:02:58.909 some of the questions that we get from people 00:02:58.909 --> 00:03:01.469 about water and about building as how it relates 00:03:01.469 --> 00:03:05.009 to water. So I'll let you. I'll let you take 00:03:05.009 --> 00:03:08.590 our resident expert. I'll let you take... And 00:03:08.590 --> 00:03:11.550 this is not one I'll claim full expertise on 00:03:11.550 --> 00:03:13.819 because it's a... I mean, there's geologists 00:03:13.819 --> 00:03:16.020 that study this and there's a lot of things that 00:03:16.020 --> 00:03:19.159 go into it. So I don't proclaim to be an expert, 00:03:19.340 --> 00:03:22.020 but it is something that's relevant to the industry 00:03:22.020 --> 00:03:24.580 and it's relevant to being a citizen of the Southwest. 00:03:25.360 --> 00:03:26.840 You know, none of us are probably supposed to 00:03:26.840 --> 00:03:29.259 be here. Yeah. I pretty much took some of the 00:03:29.259 --> 00:03:31.080 most hostile land in the country and said, let's 00:03:31.080 --> 00:03:32.919 put a couple more people. Right. Right. You're 00:03:32.919 --> 00:03:35.919 creating something that's deeply needed. So I 00:03:35.919 --> 00:03:37.759 think that there's a resentment that comes with 00:03:37.759 --> 00:03:39.620 that, just like you might present oil companies 00:03:39.620 --> 00:03:41.900 because you feel like, well, we need them. we 00:03:41.900 --> 00:03:44.879 need gas right we need gasoline for our car and 00:03:44.879 --> 00:03:46.520 you're charging this and your profits for this 00:03:46.520 --> 00:03:49.020 and you're right yes i get it they're making 00:03:49.020 --> 00:03:51.860 something that is a necessity but they do they 00:03:51.860 --> 00:03:54.879 are a business and it's not It's not a builder's 00:03:54.879 --> 00:03:56.699 responsibility. I can have a mission in my life 00:03:56.699 --> 00:03:58.560 that I would love to put more homes into the 00:03:58.560 --> 00:04:00.120 ground or change the way home building is done. 00:04:00.580 --> 00:04:03.080 But at the end of the day, it's not my responsibility 00:04:03.080 --> 00:04:05.659 to make the real estate market affordable. We 00:04:05.659 --> 00:04:07.379 thought it would be fun to invite you into that 00:04:07.379 --> 00:04:09.580 behind the scenes process, seeing how we get 00:04:09.580 --> 00:04:12.740 from raw land to finished product where we're 00:04:12.740 --> 00:04:15.199 handing off the keys to a happy homeowner and 00:04:15.199 --> 00:04:18.050 how all of those pieces come together. As you 00:04:18.050 --> 00:04:21.129 can imagine, it's not always a seamless process. 00:04:21.490 --> 00:04:24.269 So there's a lot of ebb and flow and highs and 00:04:24.269 --> 00:04:26.509 lows, and we'll take you through the successes 00:04:26.509 --> 00:04:28.850 of the journey. And I'm sure there will be a 00:04:28.850 --> 00:04:31.769 lot of surprises that we don't even know are 00:04:31.769 --> 00:04:33.550 coming. Wouldn't be new construction if there 00:04:33.550 --> 00:04:35.949 were surprises. Everyone is an amateur economist 00:04:35.949 --> 00:04:39.089 when it comes to their home purchase. And I think 00:04:39.089 --> 00:04:41.290 that you're 100 % correct in that they don't 00:04:41.290 --> 00:04:42.910 know how to feel about the interest rates. They 00:04:42.910 --> 00:04:46.990 don't even know what a 7 % rate translates to 00:04:46.990 --> 00:04:49.449 in a pain they don't realize that it's true that 00:04:49.449 --> 00:04:52.050 is a huge when most of your amortization on the 00:04:52.050 --> 00:04:55.060 front end is interest Seven percent versus three 00:04:55.060 --> 00:04:56.980 and a half percent is a doubling of your mortgage 00:04:56.980 --> 00:04:59.800 payment because so much of it is interest So 00:04:59.800 --> 00:05:03.100 it is a is a really big deal proves that each 00:05:03.100 --> 00:05:07.259 one is really a labor of love and get air You 00:05:07.259 --> 00:05:09.040 know people don't always know how much emotion 00:05:09.040 --> 00:05:11.699 has gone into that or how you know How much you 00:05:11.699 --> 00:05:13.800 have learned to love that project because you 00:05:13.800 --> 00:05:16.079 could have bailed on it and you didn't exactly 00:05:16.079 --> 00:05:18.639 by the time you're going vertical you've You've 00:05:18.639 --> 00:05:20.560 passed on several off -ramps. You know, I don't 00:05:20.560 --> 00:05:21.779 want to do that. I don't do that one I don't 00:05:21.779 --> 00:05:26.120 want that one. I want to see it through So need 00:05:26.120 --> 00:05:29.480 a third party an adult in the room I even government 00:05:29.480 --> 00:05:33.540 that regulates it for you because I can't go 00:05:33.540 --> 00:05:37.160 start a Jetliner company tomorrow, although don't 00:05:37.160 --> 00:05:44.939 put it past me But I think don't give me any 00:05:44.939 --> 00:05:48.730 ideas you also look at back even just a few generations 00:05:48.730 --> 00:05:51.569 ago, my grandmother, still going, never rode 00:05:51.569 --> 00:05:53.910 a bike and never had a driver's license. So she 00:05:53.910 --> 00:05:56.990 lives in New York. She walks everywhere, takes 00:05:56.990 --> 00:06:00.709 the city bus, or my cousins bring her, my uncle 00:06:00.709 --> 00:06:03.589 brings her, they all take care of her. So the 00:06:03.589 --> 00:06:06.129 idea of her living out in a suburb would just 00:06:06.129 --> 00:06:08.310 be anathema to everything that she's ever grown 00:06:08.310 --> 00:06:12.069 up thinking. It's just, no, why would I do that? 00:06:12.110 --> 00:06:15.009 So it's as crazy as putting one of us in a... 00:06:15.040 --> 00:06:18.459 you know, 4 -4 walk up. Yeah, that's public transportation. 00:06:18.779 --> 00:06:20.579 She gets on the bus. She's 92 years old. She 00:06:20.579 --> 00:06:23.079 gets on the bus. Yeah. Wow, Grandma, that's amazing. 00:06:24.899 --> 00:06:26.860 It just doesn't happen much in Vegas. It doesn't 00:06:26.860 --> 00:06:28.639 happen here as much as it does in other cities. 00:06:28.920 --> 00:06:31.540 How do you decide what's going to go on any specific 00:06:31.540 --> 00:06:34.779 lot? It's kind of a catch -22 because you're 00:06:34.779 --> 00:06:37.240 building out to a product that you're going to 00:06:37.240 --> 00:06:40.220 market. months from now. So it's anticipating 00:06:40.220 --> 00:06:42.920 what's going to what there might be an appetite 00:06:42.920 --> 00:06:45.720 in that area for and how you put that pricing 00:06:45.720 --> 00:06:50.360 together. And now this year in 2025 will deliver 00:06:50.360 --> 00:06:53.639 around 30 to $32 million worth of new homes. 00:06:54.829 --> 00:06:57.949 Yes, so it's quite a ride. And today we're going 00:06:57.949 --> 00:07:01.250 to talk about... What are we going to talk about? 00:07:01.589 --> 00:07:04.110 Oh, bright spots and headwinds. Oh, bright spots 00:07:04.110 --> 00:07:06.370 and headwinds. Which sounds like an 80s punk 00:07:06.370 --> 00:07:09.509 band. It should be. A hair band. It isn't, it 00:07:09.509 --> 00:07:11.910 should be. Right, I like it. So if the imported 00:07:11.910 --> 00:07:13.610 cost is roughly half of that, usually every person 00:07:13.610 --> 00:07:15.550 that touches it, it doubles, right? Generally 00:07:15.550 --> 00:07:18.290 speaking. So that means that $40 ,000 package 00:07:18.290 --> 00:07:21.389 may be a $20 ,000 import, but I already had a 00:07:21.389 --> 00:07:24.129 14 % tariff on it at that time. So maybe the 00:07:24.129 --> 00:07:26.829 raw cost was 17 ,000. So if we add 60 % tariff 00:07:26.829 --> 00:07:30.069 to that, that's around $8 ,500. Let's call it 00:07:30.069 --> 00:07:32.889 9 ,000. So instead of 40 ,000, I'm at 9 ,000. 00:07:32.889 --> 00:07:35.870 And that's if they went all the way up to 60%. 00:07:35.870 --> 00:07:38.509 As a builder, I fatigue much quicker because 00:07:38.509 --> 00:07:41.769 even though this is my business, I already, you 00:07:41.769 --> 00:07:44.209 know when you have young kids and you know they're 00:07:44.209 --> 00:07:46.250 going to freak out over one thing and you're 00:07:46.250 --> 00:07:48.750 so tired of that friction point, whether it's 00:07:48.750 --> 00:07:50.350 brushing their teeth or whether it's going to 00:07:50.350 --> 00:07:52.709 bed. Sometimes this business feels like that. 00:07:53.129 --> 00:07:55.389 Can we change this refrigerator to the other 00:07:55.389 --> 00:07:57.670 side of the kitchen? No. And when you say no, 00:07:57.930 --> 00:07:59.750 you're waiting for the tantrum. You're waiting 00:07:59.750 --> 00:08:01.170 for the buildup. You're waiting for the four 00:08:01.170 --> 00:08:04.069 AM email or three AM email where they're fired 00:08:04.069 --> 00:08:06.110 up and they're got a bunch of things to say to 00:08:06.110 --> 00:08:10.149 you. And it's those, that's right. When you think 00:08:10.149 --> 00:08:12.709 about, I have to explain this so many times. 00:08:12.810 --> 00:08:16.310 That's why I wanted to make an episode. So number 00:08:16.310 --> 00:08:19.500 one zoning. So the zoning is you would have to 00:08:19.500 --> 00:08:22.300 have a lot of political will to change that zoning 00:08:22.300 --> 00:08:25.019 because not only do we have minimum lot sizes, 00:08:25.199 --> 00:08:27.199 we have minimum setbacks, many times we have 00:08:27.199 --> 00:08:31.360 minimum structure sizes too. So it would be illegal 00:08:31.360 --> 00:08:33.940 to build a 400 square foot home on that lot. 00:08:34.480 --> 00:08:36.299 There are certain size requirements. Maybe it's 00:08:36.299 --> 00:08:38.480 1 ,500, maybe it's 1 ,000. And that's saying 00:08:38.480 --> 00:08:41.059 the land's not in any kind of HOA or has any 00:08:41.059 --> 00:08:45.169 kind of special conditions that way. That's strike 00:08:45.169 --> 00:08:47.110 number one. I'm doing usually one -off. I mean 00:08:47.110 --> 00:08:49.590 we have a batch running through four in that 00:08:49.590 --> 00:08:52.269 in South Shore So those I had the lots and I 00:08:52.269 --> 00:08:54.210 was able to put the same plan on two of them 00:08:54.210 --> 00:08:55.809 and then a similar plan on the third and then 00:08:55.809 --> 00:08:57.490 a single story another just to mix up my product 00:08:57.490 --> 00:08:59.590 offering But once I had all the architectural 00:08:59.590 --> 00:09:02.889 design now we're pouring those foundations this 00:09:02.889 --> 00:09:04.909 week. So I have to order windows So I ordered 00:09:04.909 --> 00:09:07.110 windows on one all over windows, you know, so 00:09:07.110 --> 00:09:08.730 this week I have to have all the windows order 00:09:08.730 --> 00:09:10.149 because they're six weeks out. So as the lead 00:09:10.149 --> 00:09:13.220 time Item starts to come to where I need to have 00:09:13.220 --> 00:09:15.200 a mortar so that they're here on time That's 00:09:15.200 --> 00:09:17.340 when I start making decisions Aluminum thermally 00:09:17.340 --> 00:09:19.980 broken bronze aluminum windows bronze color aluminum 00:09:19.980 --> 00:09:23.379 windows are roughly twice as much as the same 00:09:23.379 --> 00:09:25.679 product and vinyl and then fiberglass somewhere 00:09:25.679 --> 00:09:28.259 in between Efficiency and yeah, there's some 00:09:28.259 --> 00:09:30.899 do I buy a name brand and with that one when 00:09:30.899 --> 00:09:32.580 you're building in South Shore? You're limited 00:09:32.580 --> 00:09:34.720 by the HOA to they have criteria that you have 00:09:34.720 --> 00:09:36.940 to meet for the exterior. Oh for sure Yeah, yeah, 00:09:36.980 --> 00:09:38.639 you just can't I can't change anything on the 00:09:38.639 --> 00:09:40.710 outside. Once I Submitted it to the HOA, submitted 00:09:40.710 --> 00:09:43.289 my design and my elevations. That's it. I can 00:09:43.289 --> 00:09:45.649 change windows, but I have to reapply. So this 00:09:45.649 --> 00:09:47.830 one, I'm deciding to do a bronze window. I just 00:09:47.830 --> 00:09:49.330 have to send it in. That's an approved window. 00:09:49.590 --> 00:09:51.509 So that's something I've never been afraid of. 00:09:51.509 --> 00:09:53.629 I'll jump. I don't even need to know there's 00:09:53.629 --> 00:09:57.269 a parachute there. So I'm good with that. That's 00:09:57.269 --> 00:09:59.649 entirely true. You will learn throughout the 00:09:59.649 --> 00:10:02.309 course of this podcast. Michael is fearless about 00:10:02.309 --> 00:10:04.690 moving into your territory. It's a blessing. 00:10:04.889 --> 00:10:08.870 It's a gift. Absolutely. remains to be seen, 00:10:09.090 --> 00:10:12.509 but it's so far been a blessing. Let's find that 00:10:12.509 --> 00:10:14.570 price. Let's find that product that will, that 00:10:14.570 --> 00:10:16.929 will carry that sales price because we think 00:10:16.929 --> 00:10:18.970 the neighborhood and the lots can carry that 00:10:18.970 --> 00:10:21.610 sales price. What kind of designs finishes and 00:10:21.610 --> 00:10:23.850 square footage and amenities are people going 00:10:23.850 --> 00:10:25.750 to expect for that sales price? And that those 00:10:25.750 --> 00:10:28.120 are knowables. I can get an idea of where the 00:10:28.120 --> 00:10:29.879 market is a lot those can change a little bit 00:10:29.879 --> 00:10:32.159 the finishes the yeah you know and probably we're 00:10:32.159 --> 00:10:34.779 gonna use this quality of a product yeah we can 00:10:34.779 --> 00:10:37.019 do whirlpool versus genera if we find that oh 00:10:37.019 --> 00:10:39.940 we kind of we've kind of mixed it or if heaven 00:10:39.940 --> 00:10:42.240 forbid anything should happen or something opens 00:10:42.240 --> 00:10:44.019 up and then you realize you want to build a little 00:10:44.019 --> 00:10:46.659 bit higher which i'm doing on my serene project 00:10:46.659 --> 00:10:52.960 las vegas recycles this sounds hyperbolic 99 00:10:52.960 --> 00:10:56.960 % of its interior water usage. So you could run 00:10:56.960 --> 00:10:59.779 every faucet all day long, flush every toilet 00:10:59.779 --> 00:11:02.620 consistently, and as long as it's hitting a drain, 00:11:03.700 --> 00:11:07.860 99 % of it gets recycled back into the water 00:11:07.860 --> 00:11:12.659 supply. So an apartment complex with 99 % of 00:11:12.659 --> 00:11:15.440 its water use being used indoors, maybe a little 00:11:15.440 --> 00:11:17.039 bit of the desert landscaping in the perimeter, 00:11:17.240 --> 00:11:21.590 and then 99 % of that being recycled... That's 00:11:21.590 --> 00:11:23.470 not where we need to worry about our water. And 00:11:23.470 --> 00:11:27.009 to give the viewers or listeners kind of an insight, 00:11:27.509 --> 00:11:30.370 in 2025, trust homeowners will build and sell 00:11:30.370 --> 00:11:34.169 about $35 million worth of homes. So going from 00:11:34.169 --> 00:11:37.370 one little house nine years ago, not even nine 00:11:37.370 --> 00:11:39.450 years, barely nine years ago, going from one 00:11:39.450 --> 00:11:45.669 little house for $280 ,000 to $35 million worth 00:11:45.669 --> 00:11:48.029 of real estate. And that's just what's on the 00:11:48.029 --> 00:11:51.990 books now. And there's always more. My ears are 00:11:51.990 --> 00:11:54.570 always turning. And for sure. So I don't proclaim 00:11:54.570 --> 00:11:57.769 to be an expert, but it is something that's relevant 00:11:57.769 --> 00:12:00.190 to the industry and it's relevant to being a 00:12:00.190 --> 00:12:02.809 citizen of the Southwest. You know, none of us 00:12:02.809 --> 00:12:05.490 are probably supposed to be here. I pretty much 00:12:05.490 --> 00:12:07.470 took some of the most hostile land in the country 00:12:07.470 --> 00:12:09.350 and said, let's put a couple million people here. 00:12:09.490 --> 00:12:11.870 Sounds good to me. But we do live here and we 00:12:11.870 --> 00:12:13.950 are realtors. And you've been a broker and now 00:12:13.950 --> 00:12:17.860 you're a builder. perspective that overlays. 00:12:17.980 --> 00:12:19.720 And we've answered these questions and have these 00:12:19.720 --> 00:12:21.820 conversations with so many people over the years 00:12:21.820 --> 00:12:24.299 as it relates to housing. So while you maybe 00:12:24.299 --> 00:12:26.220 aren't an expert in terms of the geological sense, 00:12:26.379 --> 00:12:28.320 I think in terms of the housing market and the 00:12:28.320 --> 00:12:30.179 Las Vegas trends and what we understand about 00:12:30.179 --> 00:12:31.639 the water conservation. And the greater southwest, 00:12:31.840 --> 00:12:33.639 yeah. Exactly. I think there's definitely an 00:12:33.639 --> 00:12:35.259 expertise that follows. So you can wear the hat 00:12:35.259 --> 00:12:37.779 on this. OK, you're right. And I did get grilled 00:12:37.779 --> 00:12:40.340 a lot on this even before I was a builder and 00:12:40.340 --> 00:12:42.710 developer and now in a... I definitely get grilled 00:12:42.710 --> 00:12:44.789 on it now, but I remember as a broker, people 00:12:44.789 --> 00:12:46.509 would ask, well, were you worried about water? 00:12:48.409 --> 00:12:50.330 The bottom line is that we're here. We weren't 00:12:50.330 --> 00:12:51.690 probably not supposed to be in the middle of 00:12:51.690 --> 00:12:54.970 the Mojave Desert or in the middle of Arizona 00:12:54.970 --> 00:12:56.730 or in the middle of the Inland Empire. A lot 00:12:56.730 --> 00:12:59.190 of those, a lot of California's desert and a 00:12:59.190 --> 00:13:02.529 lot of population lives in desert or even arid 00:13:02.529 --> 00:13:05.210 climates like Denver. Just really anything west 00:13:05.210 --> 00:13:07.629 of the Mississippi is kind of technically arid. 00:13:07.950 --> 00:13:10.070 I mean, I guess until you get to the Pacific 00:13:10.070 --> 00:13:14.129 Northwest, but a lot of the population that west 00:13:14.129 --> 00:13:15.690 of the Mississippi lives in arid climates. So 00:13:15.690 --> 00:13:18.889 water is a huge concern and I'm not an insurance 00:13:18.889 --> 00:13:21.409 expert, but everything is about the likelihood 00:13:21.409 --> 00:13:24.350 of a major loss happening in X number of years 00:13:24.350 --> 00:13:27.850 over the amount of value of that loss. So if 00:13:27.850 --> 00:13:31.190 a fire is an every 50 year event, that property 00:13:31.190 --> 00:13:33.129 becomes insurable. They're pretty much having 00:13:33.129 --> 00:13:37.679 to hit you with the 2%. Risk so your property 00:13:37.679 --> 00:13:40.940 is a million dollars 2 % of that if you have 00:13:40.940 --> 00:13:44.980 a 1 in 50 year chance of a total loss Just general 00:13:44.980 --> 00:13:46.960 of these are more that goes into these calculations 00:13:46.960 --> 00:13:50.279 and that but in general. That's a $20 ,000 a 00:13:50.279 --> 00:13:54.139 year policy Because it's a 2 % risk of a loss 00:13:54.139 --> 00:13:57.620 so when you couple that with other natural disasters 00:13:57.620 --> 00:14:00.500 and over other overlays and then just an overall 00:14:00.500 --> 00:14:03.440 appetite for Wanting to be in that business at 00:14:03.440 --> 00:14:06.539 the end of the day Insurance is a capitalist 00:14:06.539 --> 00:14:08.460 endeavor, so you're going to have to have people 00:14:08.460 --> 00:14:11.039 that want to take that risk. Even if the math 00:14:11.039 --> 00:14:14.120 is $20 ,000, maybe the market has policies priced 00:14:14.120 --> 00:14:18.899 at $40 ,000, and it just might be an uninsurable, 00:14:19.100 --> 00:14:22.419 insurmountable hill to climb. Production homes 00:14:22.419 --> 00:14:25.820 are what we might call a cookie -cutter suburban 00:14:25.820 --> 00:14:29.159 house, a neighborhood maybe probably 50 homes 00:14:29.159 --> 00:14:32.840 or greater, generally built by a publicly traded 00:14:32.840 --> 00:14:36.600 home builder. You need very deep pockets to undertake 00:14:36.600 --> 00:14:39.039 subdivisions at large, to hold the land, to hold 00:14:39.039 --> 00:14:42.379 the infrastructure, and the amount of manpower 00:14:42.379 --> 00:14:46.320 just in managing projects at large requires you 00:14:46.320 --> 00:14:49.100 to be a very well -funded, like I said, generally 00:14:49.100 --> 00:14:52.360 publicly traded company. The other day it's housing. 00:14:53.379 --> 00:14:55.480 Housing is a basic need and a luxury good at 00:14:55.480 --> 00:14:58.519 the same time. A production home can be a luxury 00:14:58.519 --> 00:15:01.039 good. Definitely does not have to be custom to 00:15:01.039 --> 00:15:03.600 be a luxury good. And a custom home can be basic 00:15:03.600 --> 00:15:05.620 housing, depending on where you live. It's just 00:15:05.620 --> 00:15:07.340 kind of the nature of who built it, what was 00:15:07.340 --> 00:15:09.480 the process like, what was the end user's involvement 00:15:09.480 --> 00:15:12.360 in the process, and that's kind of how. But it's 00:15:12.360 --> 00:15:14.500 a Venn diagram, and a lot of it overlaps. Now 00:15:14.500 --> 00:15:16.840 you have your demo costs, or even if they were 00:15:16.840 --> 00:15:19.419 to buy a home with you, one of our homes that's 00:15:19.419 --> 00:15:21.120 completely finished and it's the wrong cabinet 00:15:21.120 --> 00:15:23.440 color, let's just use that as an example, they've 00:15:23.440 --> 00:15:25.259 got to go in, they've got to do the demo, they've 00:15:25.259 --> 00:15:26.860 got to hire the labor, they have to order the 00:15:26.860 --> 00:15:28.539 product, they have to, so all of those things. 00:15:28.539 --> 00:15:30.559 Those variables that now are very shouldering. 00:15:30.720 --> 00:15:34.039 Sure, sure, so it is a real cost, it's a hard 00:15:34.039 --> 00:15:35.879 cost, it's an absolute cost, and it's something 00:15:35.879 --> 00:15:39.199 that has to be factored in either way, so. So 00:15:39.199 --> 00:15:41.940 it's a convenience. A lumber package, just to 00:15:41.940 --> 00:15:43.259 pull back the curtain a little bit, a lumber 00:15:43.259 --> 00:15:45.879 package on a luxury home. You know what a good 00:15:45.879 --> 00:15:47.799 rule of thumb, a lumber package on a house is 00:15:47.799 --> 00:15:50.419 around $10 a square foot. That's going to depend 00:15:50.419 --> 00:15:52.259 on ceiling heights and different things. That's 00:15:52.259 --> 00:15:53.879 not including your trusses, your floor trusses, 00:15:53.980 --> 00:15:56.519 your roof trusses, but a lumber package is around, 00:15:56.559 --> 00:15:58.159 so if you build a 4 ,000 square foot home, it's 00:15:58.159 --> 00:16:02.299 $40 ,000. Once you've signed off on everything, 00:16:02.639 --> 00:16:05.610 design wise. As I mentioned, it sees five different 00:16:05.610 --> 00:16:07.169 engineers. It's going to see an electrical engineer 00:16:07.169 --> 00:16:08.769 to lay out the electrical schematic and do the 00:16:08.769 --> 00:16:10.990 load calculations. It's going to see a plumbing 00:16:10.990 --> 00:16:12.750 engineer that's going to draw where all the gas 00:16:12.750 --> 00:16:15.049 lines, waste lines, and supply lines go. It's 00:16:15.049 --> 00:16:18.009 going to have an HVAC, what we call a mechanical 00:16:18.009 --> 00:16:21.090 engineer. These plans are called MEPs. So that's 00:16:21.090 --> 00:16:23.169 three engineers right there. And then you'll 00:16:23.169 --> 00:16:25.190 have your structural engineer after your soils 00:16:25.190 --> 00:16:27.230 engineer. That's why I hesitated to say five, 00:16:27.450 --> 00:16:29.340 because you could argue it's six. because we 00:16:29.340 --> 00:16:31.519 have a soils engineer that goes out and bores 00:16:31.519 --> 00:16:33.840 the soil and does compaction tests and says, 00:16:34.019 --> 00:16:36.740 okay, your footers need to be this deep and your 00:16:36.740 --> 00:16:38.480 load bearing on this soil, maybe the soil needs 00:16:38.480 --> 00:16:40.399 to come out, which we call over -exing. You're 00:16:40.399 --> 00:16:43.159 over -excavating it and then putting it back 00:16:43.159 --> 00:16:46.100 at a more compacted. And usually having third 00:16:46.100 --> 00:16:48.659 party engineers test that during construction 00:16:48.659 --> 00:16:52.120 or watch it, what we call lifts. So usually every 00:16:52.120 --> 00:16:54.350 foot. That's down the road. That's once we've 00:16:54.350 --> 00:16:55.570 broken ground. But those are the things that 00:16:55.570 --> 00:16:57.850 are called out during those tests between the 00:16:57.850 --> 00:16:59.950 structural engineer, talking with the geotechnical 00:16:59.950 --> 00:17:01.990 engineer, working along with the architect and 00:17:01.990 --> 00:17:04.210 the MEP engineer. They all do need to talk to 00:17:04.210 --> 00:17:06.849 each other. And that's where a builder is kind 00:17:06.849 --> 00:17:09.269 of acts as a liaison because no one's going to 00:17:09.269 --> 00:17:10.950 own your project the way you're going to own 00:17:10.950 --> 00:17:13.470 it. Your builder is your second best proxy for 00:17:13.470 --> 00:17:15.329 that. So if you're having, you know, you're employing 00:17:15.329 --> 00:17:17.109 a custom home builder, you want someone that 00:17:17.109 --> 00:17:19.470 you can trust that has the experience that can 00:17:19.470 --> 00:17:21.269 act as your advocate to say, oh, we've reviewed 00:17:21.269 --> 00:17:24.430 these plans. This is something I commonly see. 00:17:24.750 --> 00:17:26.849 The structurals are over -engineered because 00:17:26.849 --> 00:17:29.390 an engineer's main purpose is not to save you 00:17:29.390 --> 00:17:31.730 money and build costs, it's to limit liability 00:17:31.730 --> 00:17:35.390 on his own license. So I just had a project in 00:17:35.390 --> 00:17:36.769 South Shore, one of the ones we'll cover in the 00:17:36.769 --> 00:17:39.390 later episode that had a concrete bid come back 00:17:39.390 --> 00:17:43.490 at $93 ,000, a home that I expected of $45 ,000 00:17:43.490 --> 00:17:46.450 to $50 ,000. And you get the bid and you go, 00:17:46.529 --> 00:17:48.410 no, we're re -engineering this house. I looked 00:17:48.410 --> 00:17:50.190 at it. He way over -engineered it for the soils 00:17:50.190 --> 00:17:52.869 report. He did footers that were two times wider, 00:17:52.950 --> 00:17:55.869 two times deeper. What we saw was, you know, 00:17:56.170 --> 00:17:58.549 the little bit of, you know, liability avoidance. 00:17:58.630 --> 00:18:00.289 I went and shopped it to another engineer, paid 00:18:00.289 --> 00:18:02.650 for another set of structural plans, but that 00:18:02.650 --> 00:18:06.049 $6 ,000 saved me $50 ,000 worth of concrete slab. 00:18:06.450 --> 00:18:08.589 So well worth it. And then other efficiencies 00:18:08.589 --> 00:18:11.009 I picked up. Huge. And that's why the build, 00:18:11.210 --> 00:18:12.910 you know, the building industry is not for the 00:18:12.910 --> 00:18:14.549 faint of heart. When you've got, when you have 00:18:14.549 --> 00:18:16.650 15 of those and you make a $50 ,000 mistake, 00:18:16.890 --> 00:18:20.380 it can be It's really painful. Costly. Yeah. 00:18:22.099 --> 00:18:23.859 And then the other engineer, the final engineer 00:18:23.859 --> 00:18:25.579 would be your civil engineer is creating your 00:18:25.579 --> 00:18:27.619 grading plan and creating your site plan and 00:18:27.619 --> 00:18:28.960 showing where all the water is going to go and 00:18:28.960 --> 00:18:30.740 how the home is going to sit and how high the 00:18:30.740 --> 00:18:33.779 pad elevations are. And that's your last engineer. 00:18:33.859 --> 00:18:35.980 And then you submit that to the city. How does 00:18:35.980 --> 00:18:38.279 that zoning get initiated? Where does it come 00:18:38.279 --> 00:18:41.839 from originally? That's a deep word. Okay. We'll 00:18:41.839 --> 00:18:42.759 save that for another time. I wish there was 00:18:42.759 --> 00:18:47.019 something more than water in this. Where is all 00:18:47.019 --> 00:18:50.500 the land? Why are we in a land shortage on paper, 00:18:50.700 --> 00:18:55.039 but not in reality, right? If we were to drop 00:18:55.039 --> 00:18:58.539 an alien into any major US city, and you said, 00:18:58.900 --> 00:19:01.259 believe it or not, one of our scarcest assets 00:19:01.259 --> 00:19:04.539 as a city is our land, they would beam you up 00:19:04.539 --> 00:19:08.220 and shoot you into a comet. Welcome back to Trust 00:19:08.220 --> 00:19:17.829 the Process, podcast where we... Yes. Okay, what 00:19:17.829 --> 00:19:21.230 are we doing here making cookies or muffins? 00:19:23.609 --> 00:19:25.950 3D printing models that come together and that 00:19:25.950 --> 00:19:27.750 kind of thing. I mean, there's some of that happening 00:19:27.750 --> 00:19:30.690 They look like the hives, you know that in fact 00:19:30.690 --> 00:19:33.029 a big publicly traded company did a whole neighborhood 00:19:33.029 --> 00:19:36.509 in Texas of 3d printed homes and It's great. 00:19:36.509 --> 00:19:38.569 And that's another thing people ask me tiny homes 00:19:38.569 --> 00:19:42.009 and then somewhat less frequently 3d printed 00:19:42.009 --> 00:19:45.960 homes, but the funny thing is what Okay, what 00:19:45.960 --> 00:19:49.039 problem did that solve homes carry around a 25 00:19:49.039 --> 00:19:51.420 % premium over resale homes? That's just the 00:19:51.420 --> 00:19:53.900 market speaking I can't I can't dictate the market 00:19:53.900 --> 00:19:56.940 good or bad So if my homes carry an extra 25 00:19:56.940 --> 00:19:59.059 % margin or even your average production home 00:19:59.059 --> 00:20:02.319 carries a 25 % margin over a 15 year old home 00:20:02.319 --> 00:20:05.240 It looks like the builder is charging seven hundred 00:20:05.240 --> 00:20:06.619 fifty thousand for the same thing. You could 00:20:06.619 --> 00:20:09.980 get as a resale for $625 ,000 or $600 ,000, but 00:20:09.980 --> 00:20:12.000 what you're not factoring into the equation is 00:20:12.000 --> 00:20:13.539 that all those components are near the end of 00:20:13.539 --> 00:20:15.160 their functional life. All the expensive things 00:20:15.160 --> 00:20:17.599 are coming up due, or if it's a 25 -year -old 00:20:17.599 --> 00:20:20.039 home, all your windows need to be replaced, and 00:20:20.039 --> 00:20:22.440 components, or the floor plans are dated, the 00:20:22.440 --> 00:20:25.319 market value is there at about a 25 % premium. 00:20:25.740 --> 00:20:31.119 So we're using 75 % of the water that we were 00:20:31.119 --> 00:20:32.779 using 20 years ago, and we grew by three -quarters 00:20:32.779 --> 00:20:33.960 of a million people. That's good news. That's 00:20:33.960 --> 00:20:36.059 great. So it shows you that growth does not equal 00:20:36.059 --> 00:20:39.359 more water. usage. Irresponsible water management 00:20:39.359 --> 00:20:41.680 is what equals more water usage. Agriculture 00:20:41.680 --> 00:20:44.279 in an arid dry climate equals water usage. So 00:20:44.279 --> 00:20:47.000 if I'm building a 4 ,000 square foot home, I'm 00:20:47.000 --> 00:20:50.700 spending on the order of $60 ,000 before my permit. 00:20:51.019 --> 00:20:52.960 And then the permit is generally based on the 00:20:52.960 --> 00:20:55.240 size of the home, how many fixtures are in it. 00:20:55.539 --> 00:20:58.160 So your permit in our market is generally on 00:20:58.160 --> 00:21:01.180 a home like that, another 8 to 10 ,000. And plan 00:21:01.180 --> 00:21:04.029 check these are another 1 ,500. HOAs usually 00:21:04.029 --> 00:21:06.690 charge a fee. So on one of our luxury homes in 00:21:06.690 --> 00:21:08.970 South Shore and like Las Vegas is just an example 00:21:08.970 --> 00:21:11.769 between the HOA and the permitting and all of 00:21:11.769 --> 00:21:13.569 the professions that go into the engineering 00:21:13.569 --> 00:21:16.430 and architecture, it's around $100 ,000. Before 00:21:16.430 --> 00:21:20.390 I move my first speck of dirt, $100 ,000. Just 00:21:20.390 --> 00:21:22.470 a home on paper, that's all. Just a home on paper 00:21:22.470 --> 00:21:25.890 plus a half a million dollar lot or $400 ,000 00:21:25.890 --> 00:21:29.269 lot, right? So you're... There's a lot of guts 00:21:29.269 --> 00:21:32.150 and glory that goes into before you've mobilized 00:21:32.150 --> 00:21:35.970 your first laborer on site. It's definitely a 00:21:35.970 --> 00:21:38.750 trying, challenging industry. There's about $1 00:21:38.750 --> 00:21:40.829 ,500 in our jurisdiction, about $1 ,500 worth 00:21:40.829 --> 00:21:43.849 of plan check. So I get that they're kind of 00:21:43.849 --> 00:21:49.970 auditing the plans for code. And then the city 00:21:49.970 --> 00:21:53.089 vector is auditing the bill to the plans. It 00:21:53.089 --> 00:21:55.269 just kind of cascades down. That being said, 00:21:55.309 --> 00:21:58.609 the amount of deviation away from the plans and 00:21:58.609 --> 00:22:00.309 the amount of things that are either not caught 00:22:00.309 --> 00:22:02.569 in plan check or called out as simple labeling 00:22:02.569 --> 00:22:07.109 conventions. I could build a cardboard box on 00:22:07.109 --> 00:22:09.170 that, but because of the lot size, because of 00:22:09.170 --> 00:22:11.670 the location and the zip code, it's a $1 .4 million 00:22:11.670 --> 00:22:13.190 home, we're gonna have to build to 2 ,500 square 00:22:13.190 --> 00:22:16.029 foot, simple basic box. And then you're trying 00:22:16.029 --> 00:22:17.789 to find the sweet spot where you can maximize 00:22:17.789 --> 00:22:20.150 your margins. And then say, okay, I can put another 00:22:20.150 --> 00:22:23.400 100 ,000 into this home. and sell it for 1 .7. 00:22:23.700 --> 00:22:25.740 And then you kind of start chasing your tail 00:22:25.740 --> 00:22:29.599 until you hit your limiter. And you say, OK, 00:22:29.700 --> 00:22:34.279 now let's start working backwards. So I understand 00:22:34.279 --> 00:22:39.140 why. And I wanted to give our viewers that context 00:22:39.140 --> 00:22:43.279 that I'm not anti -regulation. I love the idea 00:22:43.279 --> 00:22:45.500 that we have better building standards today 00:22:45.500 --> 00:22:49.490 than we did even 20, 25 years ago. So. That being 00:22:49.490 --> 00:22:51.250 said, I want to trash the coats for a while. 00:22:53.190 --> 00:22:54.910 You're ready to sign at what you thought was 00:22:54.910 --> 00:22:57.450 a $2 ,200 mortgage payment now is a $2 ,850. 00:22:57.849 --> 00:23:00.549 And some people just literally no longer could 00:23:00.549 --> 00:23:02.349 qualify. If you're right on the line, if you're 00:23:02.349 --> 00:23:04.390 just barely quires are just barely there. That's 00:23:04.390 --> 00:23:06.670 right. And if there's that little bit of swing 00:23:06.670 --> 00:23:08.930 knocks them right out of the game. Exactly. So 00:23:08.930 --> 00:23:11.529 we can't we can't sustain those payment shocks 00:23:11.529 --> 00:23:13.990 and spoiler a lot of move up and move up to buyers 00:23:13.990 --> 00:23:17.210 stretch it as well. Right. So as though really 00:23:17.210 --> 00:23:20.349 had a lot of canceling. It's not my responsibility 00:23:20.349 --> 00:23:23.210 to make them love this house. I'm building this 00:23:23.210 --> 00:23:25.109 house. If they love it, then they should buy 00:23:25.109 --> 00:23:26.950 it. And if there's things that they want to do 00:23:26.950 --> 00:23:29.569 to it. after to make them love it more, that's 00:23:29.569 --> 00:23:32.509 on them. I can't be responsible for making sure 00:23:32.509 --> 00:23:34.509 they walk in on day one and saying, ah, this 00:23:34.509 --> 00:23:37.049 is perfect. I wouldn't change a thing. It's just 00:23:37.049 --> 00:23:39.990 not realistic. My point is, is that all those 00:23:39.990 --> 00:23:42.660 homes that transact during that time. those people 00:23:42.660 --> 00:23:44.660 don't have golden handcuffs on them, right? So 00:23:44.660 --> 00:23:46.640 there are people that just have a 6 % rate and 00:23:46.640 --> 00:23:49.299 just say, well, I am moving for this job opportunity 00:23:49.299 --> 00:23:51.279 or this lifestyle change or I'm retiring and 00:23:51.279 --> 00:23:53.680 I'm not going to spend three more winters because 00:23:53.680 --> 00:23:56.259 my retirement home in Florida or in Las Vegas 00:23:56.259 --> 00:23:58.579 is going to have a 6 % rate instead of a 4 % 00:23:58.579 --> 00:24:02.380 rate to give them credit. Zillow has wildly disrupted 00:24:02.380 --> 00:24:05.160 the real estate market. And I think in almost 00:24:05.160 --> 00:24:07.720 every good way possible, it gave buyers a lot 00:24:07.720 --> 00:24:12.519 more authority, gave buyers a lot more Knowledge 00:24:12.519 --> 00:24:15.900 of the market buyers can watch Kind of however 00:24:15.900 --> 00:24:19.519 things trending but more than that sellers also 00:24:19.519 --> 00:24:22.900 know many times a Broker is gonna walk into a 00:24:22.900 --> 00:24:24.859 house and a seller is already gonna know within 00:24:24.859 --> 00:24:26.619 five percent of what the homes probably truly. 00:24:26.619 --> 00:24:29.599 That's how sales prices are set, right? That's 00:24:29.599 --> 00:24:31.759 right and the sellers are well those resources 00:24:31.759 --> 00:24:34.119 online. That's right. Really great. That's right, 00:24:34.160 --> 00:24:37.759 right So it really democratized the whole housing 00:24:37.759 --> 00:24:40.640 market to where brokers did not hold all the 00:24:40.640 --> 00:24:45.869 info and amount of data just in photos of homes. 00:24:45.990 --> 00:24:47.769 I mean, you, you don't even need to go bring 00:24:47.769 --> 00:24:49.670 your neighbor a jello mold anymore because you've 00:24:49.670 --> 00:24:51.910 already seen 55 photos of their house before 00:24:51.910 --> 00:24:53.910 they bought it. So, you know, your neighbors 00:24:53.910 --> 00:24:56.769 know your house as well as you do in many ways, 00:24:56.910 --> 00:24:59.829 right? So it just kind of was a, was a, in my 00:24:59.829 --> 00:25:02.549 opinion, a great positive disruptor. And it's 00:25:02.549 --> 00:25:04.509 one reason why we took a pause for a couple of 00:25:04.509 --> 00:25:07.529 years on build to sue clients because after two 00:25:07.529 --> 00:25:09.869 or three years you are so fatigued of each other 00:25:09.869 --> 00:25:12.450 and there's so many things that can change and 00:25:12.450 --> 00:25:13.990 didn't turn out the way they thought and they 00:25:13.990 --> 00:25:15.470 blame you or whatever there's always somebody 00:25:15.470 --> 00:25:18.630 to blame that's not them their relationship always 00:25:18.630 --> 00:25:20.890 struggle appreciate you being open to being on 00:25:20.890 --> 00:25:24.849 camera no problem and you look handsome as hell 00:25:24.849 --> 00:25:27.069 the hair's looking he's got his tanning engineering 00:25:27.069 --> 00:25:31.230 shirt on he's just looking good Anyway, and maybe 00:25:31.230 --> 00:25:32.869 when we get some good news on our granny plans, 00:25:32.890 --> 00:25:37.509 you'll look even better. In your eyes, hopefully, 00:25:37.730 --> 00:25:42.329 at least. Yeah, probably. What I found interesting 00:25:42.329 --> 00:25:45.109 when we talk about cycles, the biggest cohort 00:25:45.109 --> 00:25:47.450 of buyers moving through the system right now 00:25:47.450 --> 00:25:53.690 is 56 years old. 17 years ago, the average buyer 00:25:53.690 --> 00:25:55.789 moving through the system, the largest cohort 00:25:55.789 --> 00:26:00.880 was 39 years old. They're the same people. 17 00:26:00.880 --> 00:26:04.519 years later they're 17 years older. It is the 00:26:04.519 --> 00:26:07.259 most alarming statistic I've ever seen. It's 00:26:07.259 --> 00:26:08.960 showing you that there's almost like this property 00:26:08.960 --> 00:26:12.319 gilded land and gentry class that's moving through 00:26:12.319 --> 00:26:15.440 the market. I do find it interesting that not 00:26:15.440 --> 00:26:18.240 every jurisdiction requires it, so why do some 00:26:18.240 --> 00:26:21.440 and not others? I can't find a reasoning behind 00:26:21.440 --> 00:26:23.660 that. You know, we have something on certain 00:26:23.660 --> 00:26:26.279 permits, standard details. So you don't have 00:26:26.279 --> 00:26:28.420 to get a soils test to do an ingrown pool. You 00:26:28.420 --> 00:26:32.579 don't have to do a soils test for a wall, especially 00:26:32.579 --> 00:26:34.000 a fence. I mean, if you want to do a retaining 00:26:34.000 --> 00:26:36.299 wall. There's still, there are standard details 00:26:36.299 --> 00:26:40.240 though for Nevada soil. So I just find that interesting 00:26:40.240 --> 00:26:43.720 that we don't have that for a home and why that's 00:26:43.720 --> 00:26:47.920 so cost prohibitive. But after two days of agonizing 00:26:47.920 --> 00:26:50.480 over the plans, I had my coffee and the first 00:26:50.480 --> 00:26:52.160 thing they boots up and it was zoomed in on the 00:26:52.160 --> 00:26:55.660 common area almost comedic like cinematic and 00:26:55.660 --> 00:26:59.220 it zooms in and the screen lights up and I 35 00:26:59.220 --> 00:27:05.099 75 I'm gonna calculate it's not 500 times eight 00:27:05.099 --> 00:27:08.279 that's 500 times seven so after all that I had 00:27:08.279 --> 00:27:10.160 to scrap it all the builders have kind of propped 00:27:10.160 --> 00:27:13.039 up that real estate market right because We've 00:27:13.039 --> 00:27:14.859 been able to, we have the kind of margins where 00:27:14.859 --> 00:27:16.799 we can buy down their rates. We can offer those 00:27:16.799 --> 00:27:18.980 two one buy downs. If you're a big nationwide 00:27:18.980 --> 00:27:20.500 tonnage builder, you can do forward commitments 00:27:20.500 --> 00:27:22.579 where you're giving them 30 year fixed rates 00:27:22.579 --> 00:27:27.599 at 5%. So we, we help regulate the market. We 00:27:27.599 --> 00:27:29.740 give liquidity to the market when we need, need 00:27:29.740 --> 00:27:31.960 inventory. We shore up the market when we're 00:27:31.960 --> 00:27:34.539 worried about over inventorying, especially with 00:27:34.539 --> 00:27:38.619 the way that the builder business model has changed 00:27:38.619 --> 00:27:43.180 into their one part. finance sears and one part 00:27:43.180 --> 00:27:45.640 home builders, right? I mean, they get a huge 00:27:45.640 --> 00:27:48.019 source of revenue by selling mortgages. They 00:27:48.019 --> 00:27:50.299 get all that and all those ancillary services, 00:27:50.440 --> 00:27:52.400 they get rebates on appliances and it really 00:27:52.400 --> 00:27:55.839 the home is secondary, right? I mean, that the 00:27:55.839 --> 00:27:58.640 home is the financial insurance instrument. So 00:27:58.640 --> 00:28:03.599 really can has kind of helped to balance everything 00:28:03.599 --> 00:28:07.539 out. It's not a normal market where Meaning a 00:28:07.539 --> 00:28:09.980 marketplace, right? Where you have buyers and 00:28:09.980 --> 00:28:13.019 sellers with equal power, uh, or equal, equal 00:28:13.019 --> 00:28:15.259 basis, right? And you know, there's always someone 00:28:15.259 --> 00:28:16.759 who always has a little bit more power in the, 00:28:16.900 --> 00:28:19.740 in a market, but builders that can, can kind 00:28:19.740 --> 00:28:22.680 of work that market and kind of tweak, tweak 00:28:22.680 --> 00:28:25.039 it to fit their business models. And that being 00:28:25.039 --> 00:28:28.299 said, uh, that allows the market to be kind of 00:28:28.299 --> 00:28:31.140 a bystander and a secondary, the real estate 00:28:31.140 --> 00:28:34.690 market be kind of a secondary. We build pools 00:28:34.690 --> 00:28:36.930 at our own cost, and we're spending around $90 00:28:36.930 --> 00:28:40.150 ,000 just in hard costs. Equipment, excavation, 00:28:40.430 --> 00:28:42.930 gun ice. I mean, we do it nice. We upgrade a 00:28:42.930 --> 00:28:45.190 lot of things. They're all smart pools and telecenter 00:28:45.190 --> 00:28:48.210 run by your phone. But even if I were to trim 00:28:48.210 --> 00:28:49.869 it down to bare bones, I'd still be spending 00:28:49.869 --> 00:28:54.130 in the 70s, probably 71, 72. Cabinets are thought 00:28:54.130 --> 00:28:56.829 of in boxes. You break them into a box. Even 00:28:56.829 --> 00:28:59.920 if it's ... You know a whole bank of cabinets. 00:28:59.980 --> 00:29:02.400 It's how many boxes made up that bank of cabinets 00:29:02.400 --> 00:29:05.900 We had a house that's just not finishing that 00:29:05.900 --> 00:29:07.779 when I really broke it down. This one did sticker 00:29:07.779 --> 00:29:11.579 shock me It was twelve hundred dollars per box 00:29:11.579 --> 00:29:14.779 It was forty nine boxes and it was a sixty two 00:29:14.779 --> 00:29:16.839 thousand dollar cabinet package You know people 00:29:16.839 --> 00:29:19.240 are busy and they got their own lives. They have 00:29:19.240 --> 00:29:21.579 soccer practice. They have work They have family 00:29:21.579 --> 00:29:23.799 friends. They're they're doing a temperature 00:29:23.799 --> 00:29:25.619 check They're dipping the toe in and then not 00:29:25.619 --> 00:29:27.119 thinking about it again for a couple months. 00:29:27.140 --> 00:29:29.720 So they're That's why it just takes time. Once 00:29:29.720 --> 00:29:33.000 the news goes sour, it takes a long time for 00:29:33.000 --> 00:29:34.559 that faith to come back and the confidence to 00:29:34.559 --> 00:29:35.980 come back. And they don't, they don't think about 00:29:35.980 --> 00:29:38.119 the fundamentals of real estate as an asset class. 00:29:38.220 --> 00:29:40.140 That's just the bottom line is these are not 00:29:40.140 --> 00:29:42.720 cars. These aren't even precious metals. These 00:29:42.720 --> 00:29:47.900 are homes. I mean, they have 3D, they're 3D structures. 00:29:48.559 --> 00:29:51.420 They have emotion, they have feeling, they generate, 00:29:51.440 --> 00:29:53.980 they create the city. I mean, there's no city 00:29:53.980 --> 00:29:56.319 without houses, real estate as an asset class, 00:29:56.359 --> 00:30:00.059 just two. resilient and it's too rigid. It's 00:30:00.059 --> 00:30:03.819 got not nearly enough elasticity in it that would 00:30:03.819 --> 00:30:07.700 have this kind of instability that people associate 00:30:07.700 --> 00:30:10.099 with the stock market or cryptocurrency or whatever. 00:30:15.660 --> 00:30:19.740 the drama and spiciness of new home construction. 00:30:20.079 --> 00:30:22.880 So I hope that people can garner value from this 00:30:22.880 --> 00:30:25.460 podcast. I know that new home construction and 00:30:25.460 --> 00:30:28.599 design and real estate and the market are passions 00:30:28.599 --> 00:30:30.779 of a lot of people. There are a lot of enthusiasts 00:30:30.779 --> 00:30:34.599 connected. That's right. Springboarding into 00:30:34.599 --> 00:30:38.880 Las Vegas and other Sunbell areas. We're seeing 00:30:38.880 --> 00:30:43.559 finished about 11 ,500 homes in 2024 and we expect 00:30:43.559 --> 00:30:47.400 to finish around that same number in 2025, just 00:30:47.400 --> 00:30:49.539 based off of what permits are pulled right now. 00:30:49.859 --> 00:30:53.319 And trends, there's about 9 ,000 ready to develop 00:30:53.319 --> 00:30:55.339 lots. And that's just something that could be 00:30:55.339 --> 00:30:57.480 developed within the next six to nine months. 00:30:57.759 --> 00:31:00.519 So there is the lot inventory in Las Vegas. Now, 00:31:00.559 --> 00:31:03.960 again, most of that's held by those Fortune 500 00:31:03.960 --> 00:31:05.779 home builders and publicly traded home builders. 00:31:06.339 --> 00:31:08.359 Those aren't lots. You can't go buy 9 ,000 lots 00:31:08.359 --> 00:31:11.220 in Las Vegas. I would say it's probably... 400 00:31:11.220 --> 00:31:12.839 lots and they're all luxury lots for the most 00:31:12.839 --> 00:31:14.880 part that you can actually buy in Las Vegas. 00:31:15.079 --> 00:31:16.759 But there are there's the lots that are developed 00:31:16.759 --> 00:31:18.319 that's not even counting the infrastructure and 00:31:18.319 --> 00:31:19.559 the work that's going to be happening in the 00:31:19.559 --> 00:31:22.519 next three or four quarters that will deliver 00:31:22.519 --> 00:31:25.799 more ready -to -go lots. So assuming that builders 00:31:25.799 --> 00:31:28.680 will build on all 9 ,400 plus additional lots 00:31:28.680 --> 00:31:31.119 being brought to market stands to reason that 00:31:31.119 --> 00:31:33.500 we'll probably see around the same number of 00:31:33.500 --> 00:31:36.140 homes delivered single -family homes. give or 00:31:36.140 --> 00:31:39.200 take 10 % which is not nothing 10 % and that's 00:31:39.200 --> 00:31:41.059 still well over a thousand homes but I think 00:31:41.059 --> 00:31:44.160 will be probably not less than 10 and not more 00:31:44.160 --> 00:31:46.359 than 12 ,000 times being completed in a little 00:31:46.359 --> 00:31:51.359 hack but I do hopefully this doesn't publish 00:31:51.359 --> 00:31:55.740 in a bag of curtains you actually don't need 00:31:55.740 --> 00:31:58.500 a permit until you call for your first inspection 00:31:58.500 --> 00:32:00.660 this is probably gonna get me blacklisted by 00:32:00.660 --> 00:32:05.250 the city so I go into it thinking Okay, can we 00:32:05.250 --> 00:32:07.369 get townhomes in here? Let's just say 2 .3 million 00:32:07.369 --> 00:32:11.210 divided by 23. I'm into $100 ,000 per pad or 00:32:11.210 --> 00:32:13.769 door. Okay. Very doable in that area because 00:32:13.769 --> 00:32:15.309 even a townhome would still sell for five or 00:32:15.309 --> 00:32:18.390 $600 ,000 if I did them right. So then I'm starting 00:32:18.390 --> 00:32:22.569 there at $100 ,000. Amazing. Let's do it. So 00:32:22.569 --> 00:32:24.230 if you're building to that bottom of the market, 00:32:24.509 --> 00:32:27.240 you're very exposed. and the greatest underserved 00:32:27.240 --> 00:32:30.019 market. It's a positive feedback loop. It's so 00:32:30.019 --> 00:32:32.079 underserved because it is underserved. As we 00:32:32.079 --> 00:32:34.019 get in the weeds later on in the podcast, talk 00:32:34.019 --> 00:32:36.299 about some individual projects that we have coming 00:32:36.299 --> 00:32:38.279 as a company, and as we're making decisions as 00:32:38.279 --> 00:32:40.380 to how to build those out, this is informing 00:32:40.380 --> 00:32:43.079 my decisions. The risk is higher building to 00:32:43.079 --> 00:32:45.140 the bottom of the market. First, you have less 00:32:45.140 --> 00:32:47.500 room to go. You have less room to absorb surprises. 00:32:47.799 --> 00:32:49.720 If you're building at the median, which is in 00:32:49.720 --> 00:32:52.619 the middle $400 ,000 range, if you have a $50 00:32:52.619 --> 00:32:56.470 ,000 surprise per home site, It's 10 % of the 00:32:56.470 --> 00:32:58.269 entire end -of -day sales price. It's risky. 00:32:58.410 --> 00:33:01.289 If you're building to 150 % of the median sales 00:33:01.289 --> 00:33:03.769 price at $800 ,000, you have a $50 ,000 surprise. 00:33:04.029 --> 00:33:06.450 Those are the things that I'm excited to expose. 00:33:06.609 --> 00:33:08.769 Those are things that people aren't aware of 00:33:08.769 --> 00:33:11.150 or thought about it from that back -end perspective. 00:33:11.450 --> 00:33:13.190 Some of these are actually bigger line items 00:33:13.190 --> 00:33:15.900 than the first three. but they're such integral 00:33:15.900 --> 00:33:18.079 parts of the house, you would expect them to 00:33:18.079 --> 00:33:20.079 be higher. So I consider it reverse sticker shock. 00:33:20.220 --> 00:33:23.240 Well, that's really, well, I still spent 1 .7 00:33:23.240 --> 00:33:25.660 in build costs, but the lumber was only X number 00:33:25.660 --> 00:33:28.960 of dollars. And when I was new in this, especially 00:33:28.960 --> 00:33:31.220 when it was really becoming a true business about 00:33:31.220 --> 00:33:34.279 six, seven years ago, I made a lot of mistakes. 00:33:34.460 --> 00:33:36.640 So I'll humbly admit that I made a lot of mistakes 00:33:36.640 --> 00:33:38.920 about letting buyers come in and rule the show. 00:33:39.299 --> 00:33:42.339 And you felt so gratified. Oh, someone wants 00:33:42.339 --> 00:33:45.509 to buy something I created. Of course. Oh, yeah, 00:33:45.509 --> 00:33:47.410 you want to change this? I want you to love it. 00:33:47.410 --> 00:33:50.390 That lasts about three times and then now it's 00:33:50.390 --> 00:33:53.069 no That's why builders set the market and builders 00:33:53.069 --> 00:33:55.170 what we're in the business of built we have to 00:33:55.170 --> 00:33:57.230 sell them So we're not holding on to this asset 00:33:57.230 --> 00:33:59.829 that was part of our retirement It's can we have 00:33:59.829 --> 00:34:01.730 to sell so we move on to the next ones or we 00:34:01.730 --> 00:34:03.309 know we're gonna get this batch of homes kind 00:34:03.309 --> 00:34:05.609 of move through the ecosystem so we can Move 00:34:05.609 --> 00:34:07.990 on to other projects. I'm already committed to 00:34:07.990 --> 00:34:09.650 and money's already on the line and we're thinking 00:34:09.650 --> 00:34:12.079 about selling that Before it hits the ground 00:34:12.079 --> 00:34:15.300 right that our whole idea of examples that might 00:34:15.300 --> 00:34:18.619 Maybe wake up the city to say look we have to 00:34:18.619 --> 00:34:21.139 find a happy medium here We are a growing city 00:34:21.139 --> 00:34:24.579 were desirable city and ultimately people deserve 00:34:24.579 --> 00:34:26.599 peaceful enjoyment of their property and that 00:34:26.599 --> 00:34:30.219 includes improving it and making it better and 00:34:30.219 --> 00:34:33.480 putting it into The city itself. Otherwise, we're 00:34:33.480 --> 00:34:35.260 a city of just raw land and then we're not a 00:34:35.260 --> 00:34:38.039 city I would tell when I was really heavy in 00:34:38.039 --> 00:34:40.880 my brokerage business Tell a buyer, look, you 00:34:40.880 --> 00:34:42.360 can either get the house you want or the deal 00:34:42.360 --> 00:34:45.400 you want. There's just very unlikely that those 00:34:45.400 --> 00:34:47.900 two things are going to line up perfectly. So 00:34:47.900 --> 00:34:51.760 if you're ready to make concessions, there's 00:34:51.760 --> 00:34:53.920 a reason this house has been passed over. On 00:34:53.920 --> 00:34:57.239 a home that might cost around $300 a square to 00:34:57.239 --> 00:35:01.199 build with an end of day value of around $500 00:35:01.199 --> 00:35:03.920 per square foot, your labor is probably only 00:35:03.920 --> 00:35:07.519 $100 a square. And that is generous, actually. 00:35:07.599 --> 00:35:12.079 Really? Yeah. So, because labor is less than 00:35:12.079 --> 00:35:14.960 half of the total cost of construction costs 00:35:14.960 --> 00:35:18.280 and about 20 % of the end of day value of the 00:35:18.280 --> 00:35:19.820 home. I told my engineer that. I said, we are 00:35:19.820 --> 00:35:21.940 going to pick one or two waivers. That's it. 00:35:22.179 --> 00:35:24.599 I don't want to go to them and say, oh, by the 00:35:24.599 --> 00:35:27.000 way, I know I already asked to not have to do 00:35:27.000 --> 00:35:29.360 any park space. Can I also do narrower streets? 00:35:29.860 --> 00:35:32.019 Can I also not do a sidewalk? Can I also not 00:35:32.019 --> 00:35:34.400 do a cul -de -sac? That's what your sanitation 00:35:34.400 --> 00:35:36.059 person wanted. Now I'm going to get none of them. 00:35:36.219 --> 00:35:37.880 Sounds like a little kid. Do you want to stay 00:35:37.880 --> 00:35:40.880 up till 10 and ask nicely? Or do you want to 00:35:40.880 --> 00:35:42.920 go for midnight and also ask for ice cream too 00:35:42.920 --> 00:35:44.559 and also has to go to the park tomorrow and also 00:35:44.559 --> 00:35:48.719 So I think that you know, that was the path of 00:35:48.719 --> 00:35:50.719 listers and the network analysis is just are 00:35:50.719 --> 00:35:53.619 we? Did they have water supply in the area essentially 00:35:53.619 --> 00:35:57.000 to let us tap in to our water? Pressures meet 00:35:57.000 --> 00:35:59.900 the minimum so that when you turn on your faucet 00:35:59.900 --> 00:36:01.920 like it's not just a drip system It's gonna flow 00:36:01.920 --> 00:36:05.369 out and you can wash your hands. So so There's 00:36:05.369 --> 00:36:08.090 about fit in our jurisdiction about $1 ,500 worth 00:36:08.090 --> 00:36:10.929 of plan check so I get that that they're kind 00:36:10.929 --> 00:36:16.110 of auditing the plans for For code so and then 00:36:16.110 --> 00:36:20.090 the city vector is auditing the bill to the plans 00:36:20.090 --> 00:36:22.489 It's just kind of cascades down that being said 00:36:22.489 --> 00:36:25.809 the amount of deviation away from The plans and 00:36:25.809 --> 00:36:27.530 the amount of things that are either not caught 00:36:27.530 --> 00:36:29.750 in plan check or called out as simple labeling 00:36:29.750 --> 00:36:33.130 conventions We're paying almost 1 million dollars 00:36:33.130 --> 00:36:35.530 for this we will have almost another million 00:36:35.530 --> 00:36:38.730 dollars in engineering Infrastructure the cul 00:36:38.730 --> 00:36:41.389 -de -sac the all the everything the grading sits 00:36:41.389 --> 00:36:43.809 on a hillside and it's a mess It's gonna be a 00:36:43.809 --> 00:36:46.789 lot of work to get these things pet ready. Yeah 00:36:46.789 --> 00:36:50.170 Easily easily might even be a little bit more 00:36:50.170 --> 00:36:52.949 so it may be two one or two one five So you can 00:36:52.949 --> 00:36:57.630 see when that is the new the numerator I want 00:36:57.630 --> 00:37:00.690 to minimize the lot cost by maximizing the denominator, 00:37:00.849 --> 00:37:03.809 i .e. the total amount of home sites. It just 00:37:03.809 --> 00:37:06.750 seems like once you move your shovel, just figure 00:37:06.750 --> 00:37:09.949 $70 ,000 and then go up from there. And that's 00:37:09.949 --> 00:37:11.849 our cost. That's not a company being greedy. 00:37:11.929 --> 00:37:16.190 That's us paying the excavator, us paying the 00:37:16.190 --> 00:37:18.389 rebar people, us paying the pool plumbers directly. 00:37:18.750 --> 00:37:21.050 So those are our costs. I'm talking about pulling 00:37:21.050 --> 00:37:22.809 back the curtain. I mean, that shows you. Those 00:37:22.809 --> 00:37:24.909 are our true costs. That's what we're spending 00:37:24.909 --> 00:37:29.179 on a pool. And 10 years ago, companies were retailing 00:37:29.179 --> 00:37:32.320 pools for $40 ,000. Isn't that crazy? It's crazy. 00:37:32.400 --> 00:37:34.460 The model that we think of, but that model home 00:37:34.460 --> 00:37:36.679 is permitted. And then all you have to do is 00:37:36.679 --> 00:37:38.159 submit. So all that engineering is permitted. 00:37:38.260 --> 00:37:40.179 All the architectures are permitted. All the 00:37:40.179 --> 00:37:41.820 codes that are referenced are permitted. And 00:37:41.820 --> 00:37:44.260 then all you have to do is submit with that home 00:37:44.260 --> 00:37:46.539 on that lot. And then the city grants you that 00:37:46.539 --> 00:37:48.980 permit, but it's a production permit or a trucked 00:37:48.980 --> 00:37:51.579 home permit. What does that do? to our home prices. 00:37:52.380 --> 00:37:54.300 A lot of our, like I mentioned, a lot of appliances 00:37:54.300 --> 00:37:57.079 and Samsung and things like that. They come from 00:37:57.079 --> 00:37:59.679 Asia and they're imported. Thankfully, homes 00:37:59.679 --> 00:38:01.559 are one of the last things still built by hand 00:38:01.559 --> 00:38:03.380 and one of the last things that you cannot import. 00:38:03.480 --> 00:38:05.699 Right. So many of the goods that go into that 00:38:05.699 --> 00:38:08.519 home, maybe the copper comes from China for the 00:38:08.519 --> 00:38:10.039 electricity, depending on where you're sourcing 00:38:10.039 --> 00:38:14.239 it from. And we're closed out 24 with one billion 00:38:14.239 --> 00:38:16.119 dollars in investor purchases in the greater 00:38:16.119 --> 00:38:19.840 Las Vegas market. As a whole, we're kind of leading 00:38:19.840 --> 00:38:21.539 the nation when it comes to investor purchases 00:38:21.539 --> 00:38:24.239 us in Denver and Phoenix kind of those suburban 00:38:24.239 --> 00:38:27.579 sprawl where it's easier to buy a block of homes 00:38:27.579 --> 00:38:29.780 maybe not on the same block but a block of homes 00:38:29.780 --> 00:38:32.980 that are relatively easy to manage versus a more 00:38:32.980 --> 00:38:35.239 fragmented market on the east coast where it's 00:38:35.239 --> 00:38:37.460 harder to manage maybe a suburb that's 20 miles 00:38:37.460 --> 00:38:40.320 this way 20 miles that way so we're still leading 00:38:40.320 --> 00:38:43.219 the nation with investor purchases and the nation 00:38:43.219 --> 00:38:45.420 is leading the world and the amount of investor 00:38:45.420 --> 00:38:48.300 purchases into single -family residential so 00:38:48.380 --> 00:38:50.420 that's yet another backstop and I think that's 00:38:50.420 --> 00:38:52.880 putting a lot of pressure on that appreciation 00:38:52.880 --> 00:38:55.599 and maybe that's getting us the four and five 00:38:55.599 --> 00:38:57.619 percent appreciation that we saw last year. I 00:38:57.619 --> 00:39:01.260 haven't had a home that sold for north of two 00:39:01.260 --> 00:39:03.559 million that didn't have at least $30 ,000 worth 00:39:03.559 --> 00:39:05.920 of appliances in it because where do you stop? 00:39:06.039 --> 00:39:07.699 we should probably have an ice maker, an under 00:39:07.699 --> 00:39:09.460 counter ice maker that's plumbed in, and we should 00:39:09.460 --> 00:39:12.099 probably have fridge columns, and we should probably 00:39:12.099 --> 00:39:13.980 make them panel ready and do the cabinet panels. 00:39:14.300 --> 00:39:15.880 The nicer you make those fridge columns, now 00:39:15.880 --> 00:39:17.679 this has to match, and now that has to go, and 00:39:17.679 --> 00:39:19.400 this has, you know, you kind of, do you want 00:39:19.400 --> 00:39:22.280 to keep the same brand? Right, that's right, 00:39:22.400 --> 00:39:24.260 and before you know it, you've spent $40 ,000 00:39:24.260 --> 00:39:26.980 to $50 ,000. The most I've ever spent was $70 00:39:26.980 --> 00:39:28.880 ,000. On an appliance package? On an appliance 00:39:28.880 --> 00:39:32.179 package for a $3 million home. But that home 00:39:32.179 --> 00:39:34.559 warranted it. Oh, it did. It had to. It did, 00:39:34.619 --> 00:39:37.940 100%. And the end -of -day buyer actually noted 00:39:37.940 --> 00:39:40.380 the high -end appliance package that tipped him 00:39:40.380 --> 00:39:43.300 over from buying a home. And it was good. It 00:39:43.300 --> 00:39:45.539 was really great. So if I shared it over time, 00:39:45.659 --> 00:39:49.920 it was a fun one. So the housing market is, as 00:39:49.920 --> 00:39:53.099 you said, it's not very exciting. It's just not 00:39:53.099 --> 00:39:56.960 a tumultuous year. It's been stable for the last... 00:39:56.780 --> 00:39:58.840 more or less two and a half years, I would say 00:39:58.840 --> 00:40:00.820 probably. Well, we're going up probably in three 00:40:00.820 --> 00:40:02.239 years. I think it really started to stabilize 00:40:02.239 --> 00:40:06.559 in middle of 2022, which is what the intention 00:40:06.559 --> 00:40:10.239 was, you know, to get to get a lid on those that 00:40:10.239 --> 00:40:12.099 runaway kind of price gains that we were seeing. 00:40:12.300 --> 00:40:14.739 And that worked. Thankfully, we've just gone 00:40:14.739 --> 00:40:18.380 into a prolonged period of very stable, healthy 00:40:18.380 --> 00:40:23.130 appreciation and a lot of Other factors that 00:40:23.130 --> 00:40:26.130 are affecting the market not necessarily price 00:40:26.130 --> 00:40:29.750 gains. So Inventory obviously remains really 00:40:29.750 --> 00:40:33.210 constrained and then mortgage rates and I think 00:40:33.210 --> 00:40:35.710 this that kind of those two things together have 00:40:35.710 --> 00:40:40.449 honestly Functioned as a backstop My interest 00:40:40.449 --> 00:40:42.909 is let's get into this project. Let's develop 00:40:42.909 --> 00:40:45.030 it. Let's move on to the next one This is not 00:40:45.030 --> 00:40:47.929 my end all be all this is not my opus. I'm not 00:40:47.929 --> 00:40:50.469 here to make this little hillside on Horizon 00:40:50.469 --> 00:40:53.639 Ridge 15 home subdivision. I don't make it seven, 00:40:53.940 --> 00:40:56.219 right? I'll leave 23 ,000 square feet on thin 00:40:56.219 --> 00:40:59.460 of you know, but preserve hillside and we'll 00:40:59.460 --> 00:41:01.340 move on I'm not gonna fight on the common area 00:41:01.340 --> 00:41:03.079 element. I'm gonna reduce the zoning I'm not 00:41:03.079 --> 00:41:04.300 gonna fight on the street with I'll give them 00:41:04.300 --> 00:41:07.980 the street with right So that's kind of wait 00:41:07.980 --> 00:41:09.340 a minute four homes have sold in the last few 00:41:09.340 --> 00:41:11.639 months on this very street and this one had this 00:41:11.639 --> 00:41:12.840 pool and this one didn't have one this one had 00:41:12.840 --> 00:41:14.679 this finishes and this one and you can even scroll 00:41:14.679 --> 00:41:16.519 through the house and see this looks like that 00:41:16.519 --> 00:41:19.300 that yes ours has this right didn't have and 00:41:19.300 --> 00:41:22.610 yeah, so I think in many ways That has that's 00:41:22.610 --> 00:41:25.090 why I throw history out because I can't believe 00:41:25.090 --> 00:41:28.429 I just said that Because there's there's no there's 00:41:28.429 --> 00:41:30.949 never been a time like this Where buyers had 00:41:30.949 --> 00:41:33.809 and just general public had so much knowledge 00:41:33.809 --> 00:41:36.570 at their fingertips of the real estate market 00:41:36.570 --> 00:41:39.510 Street and people will say builders, you know, 00:41:39.550 --> 00:41:41.429 they don't build like they used to it. Yeah feel 00:41:41.429 --> 00:41:44.349 the same. It doesn't They're right and But they 00:41:44.349 --> 00:41:46.190 don't know the back story as to why it isn't 00:41:46.190 --> 00:41:49.030 that you had some idea to throw less houses and 00:41:49.030 --> 00:41:51.909 put in more street. There are these rules. Trust 00:41:51.909 --> 00:41:55.269 me. I don't want it to. Thanks for tuning into 00:41:55.269 --> 00:41:57.809 the Press the Process podcast. Make sure to follow 00:41:57.809 --> 00:42:00.309 us on Spotify to stay in the loop of the latest 00:42:00.309 --> 00:42:03.230 insights, project updates and everything in between. 00:42:03.630 --> 00:42:04.469 See you next time.