The Paradyme Shift

Institutionalizing & Syndicating Real Estate Projects: A Deep Dive into Barn Caves | Webinar E36

• Ryan Garland

Share episode

Join Ryan Garland, Founder and Chairman of Paradyme, Steven Biegel, AIA, the architect behind the Pentagon's remodel, and Rob Sampson the main architect behind the Barn Caves project, for an exclusive live webinar. Learn how to institutionalize and syndicate your real estate projects while exploring the Barn Caves development and its investment potential.

During this session, we'll cover:

  • The intricacies of structuring and syndicating large-scale real estate developments
  • Why Barn Caves' unique design and features support investment growth
  • Key strategies for institutional investors in real estate
  • Insights into the architectural and investment aspects that make Barn Caves a standout opportunity

Whether you're new to real estate syndication or a seasoned investor, this webinar will provide valuable insights into how institutionalizing your project can unlock new levels of success. Don't miss out on this opportunity to explore how Barn Caves aligns with these strategies!

Paradyme

SPEAKER_00:

Okay, everybody, Ryan Garland here, founder and chairman of Paradigm. Thank you so very much for joining today. As you know, I always say this, I'm excited to bring on two of the most powerful hitters for Paradigm. These are my architects. And the idea for today is to share with you a little bit more of a deeper dive in what it takes to do and plan and design a project in real estate to be able to go out to investors, go out to banks, institutions, private equity, private credit, family office, to be able to successfully raise the capital that's needed to be able to build and develop these projects. And there's no there's no uh shortage in the volatility of the market and the conversation we can go into. But really at the end of the day, what people are needing is clarity and transparency to be able to understand that we know what we're getting ourselves into. And so ultimately, really being able to articulate to your clients, your investors, you know, how these things are designed, um, the planning that it takes to get in there, the budgeting that it takes. I mean, obviously, we can dive into construction concerns and costs and tariffs, and the list goes on. But when you have groups that have ridden these waves for many, many years, I'm not trying to say uh our our uh Mr. Gray haired guy over here has been through it a lot. It's not no, there's no he looks younger, by the way, than he really is. I have to tell you, he's he's one hell of a stud when you see him in person. But um, you know, we've all been through it, right? And that at the end of the day, that's what people want to see. So when you look at the combined experience uh of these of these two gentlemen, along with myself, it really allows you to feel more comfortable about how you need to navigate the market, but again, also uh present a good presentation for people to for consideration to get involved. So I am going to show a quick video, and what we'll do is we'll just kind of open up the gates for for Steven. We'll start with you um just to talk a little bit about your background, and then this video, guys, is really our animation video of the barn caves overall. So, for those of you that haven't seen this yet, I think you'll appreciate the the uh design work that it went into just to kind of get this animation out because ultimately this is what it will, for the most part, look like, except for the gym. We are gonna have a little bit of a different elevation. Uh, we do actually have a parking structure, the site isn't as flat as this, but you know, talking to uh uh artists on how the site's supposed to look is almost impossible to get these guys to really create the exact look of what the project will will be. And then I'm gonna again, what I'm gonna do is I'm gonna kind of go in between these gentlemen as they talk about you know the design of this project. I'm gonna stop in between that and then talk about how we are taking this and then going to market and raising capital and uh and then implementing transparency for people. So uh again, that's the whole point to this uh this uh webinar today. So here we go, guys. And then Steven, I'll go ahead and open up to you, my friend, and uh please share a little bit about your background, and that would be absolutely killer.

SPEAKER_02:

Thank you. And it's a pleasure to be here, Ryan. Uh I'm enjoying the stage with both Ryan and Rob. Rob's ideas that went into the foundational framework of the Barn Caves are are you know kind of critical to this whole thing, and we'll get into those in detail. But Stephen Beagle, architect, uh, it's nice to be here. Uh 46 years doing this. Hard to, it's a really hard thing to admit. 46 years doing it. My uh one of my projects that has been broadcast by Paradigm is the Pentagon renovation. So from 1996 to 2001, I was in charge of the Pentagon, which was a major undertaking. And um, I can go into all kinds of details about what the Corps of Engineers does and what the Department of Defense does, but I'll I'll forego that. What's important here are the innovations that we have included in the barn cave design and in the gym. These are you know really cutting-edge uh technologies. We have taken technologies from other industries, from fire suppression, from the types of glass, from siding details, and we have incorporated them into what is a fairly simple concept. The barn cave conceptually is simple. It's it's a box, but it's a it's a very special box. It frames out to out, it bears out to out, it tries to free up as much open space in the center as can be in a 28 by 76 module. And the idea is that the the interior walls are flexible, so anybody who invests in a barn cave gets the lower level for all the toys, and gets the upper level with a very flexible frame to relocate walls and and you know specialize the construction. So we're as we go through this, you're gonna see that uh things like glass floor panels uh that will allow you to look down from the living level into the lower level, which is an interesting thing because normally there's a fire separation of one hour between anything containing fuel and the living space above. We solved that problem. We found the the right formula for interior views of your lower level, the upper level is uh is uh flexible, the walls can move, uh your framing is out to out, half 28 feet wide. The interior walls can move. So fire suppression systems, which are critical to this kind of structure where you have fuel inside a building, but the fire suppression system is robotic, it senses where the smoke is coming from, it senses where the problem is, and it rotates around and directly hits hits the target with uh whatever it needs to whatever it needs to go, whether it's water or halon or whatever. So then pneumatic elevators, we have those involved here where the vertical circulation in the form of an elevator is no longer needing to have a hoist bar or a a hydraulic uh pump. It has it's pneumatic, so it's a vacuum system. So those are the kinds of ideas that we've incorporated into the barn caves, even the flooring system. We've modularized the flooring system to include uh a hydro a uh polycarbonate material that allows us to go um with a specific size, say four by twelve, and you place the floor panels uh into the floor system in a very methodical way, but it's it's it's polycarbonate and it um it doesn't weigh very much, it's lightweight, and it's it's not sophisticated, but but it's it's intended to be simple so that we can systematize the entire construction system. And with that, you know, jump in, Rob, talk about you and yours.

SPEAKER_00:

Hold on, before before we do, if everyone's looking at the video, hold on one second, Rob, I'll give you the floor. Sorry. If everybody's watching the video, what I what the whole point was for this that part of the video is to show where the site is, as far as the barn caves, according to the mall, where you have 730,000 square feet of retail. The reason why it's always about location, and then if you guys were looking at the video across the way there, you'll see that there was actually a um uh airport, and there's a lot of development up in the area. And and Rob was going to tell you about all that development that's going on in the area. However, the reason why I wanted to highlight that is because when you're working with institutions or investors, what you were trying to identify is future growth and demand. And ultimately that's the most important live, work, play. Um, let's say a lot of the questions that I get are what happens if the market were to crash, or depending on the elections, or you know, cost of living still high, interest rates, the list kind of goes on. Well, if you're looking at areas where you can, you have it's anchored by a grocery store, you got Walmart there, you know, it's just around the corner. Your cost of living can go down. Um, and there's a lot of other different features, but these are the things that you know a lot of investors and institutions are going to look at uh when you're in essence designing your capital stack. For example, you know, those of you that know, paradigm storage is right next door to this. It's 225,000 square feet. I am in fact in my office at that project. And uh the the idea to to uh to um highlight these things is because we are right now actively working with the head of private credit at JP Morgan to give us a$100 million line of credit to build these projects throughout the country. But before you do that, you guys can see the sophistication and the planning that it takes to be able to get this job done. When you're working with a uh a large institution, they're gonna have their own analyst and their construction analyst, and they're gonna want to know what it is we're doing and how we're building these things, and they're gonna want to see the resumes behind the people that are designing it and what you need to do to narrow down your budget because once you have your construction financing, you're not gonna go back to the lender and say, oh, we're we're uh we're way over budget. And if that's the case, you or the investors have to come out of out of your LP partners have to come out of more pocket uh out of pocket with that capital. So now you're doing capital calls and kind of creating some strain on your own clients and your investors, and that's what you're trying to hedge against, but also stay on budget and timelines. So, really, the it's it's very, very important that you are planning your development according to exactly all the stuff that Steven brought up because you have approvals that are required. Again, firewalls, all the fire suppression, you know, all of these things really matter before you can get approvals with the city. And that's one of the reasons why Rob's going to be talking here in a second. But those are the things that you have to, if you're in my shoes, you have to pull together, and all those stars have to align before you can really go to market to start raising the capital. Because without knowing your numbers, you're you're in essence just throwing stuff up in the air. So you really need to have the ability to pull this together. So, with that said, uh sorry to break that up, but Rob, go ahead, buddy. Let's talk a little bit about your background and how good your head looks today.

SPEAKER_01:

Hi, thanks, buddy.

SPEAKER_00:

Nice and shiny. You look great, buddy. I just want to let you know.

SPEAKER_01:

It's uh obviously my pleasure to be here as always. Uh sharing stage with Ryan and Stephen is uh always a learning experience for me as well, as long as I've been in uh in this business. So my name's Rob Samson with Saltberg Associates. I've been in uh vice president uh for seven years, been with the company for 26 years in uh Lake Havasu City. It's uh I had my family in town here this past weekend, and I took them around and at 47 uh years old, I took them around and showed them all the projects that we did. And I'll be honest with you, it's humbling at times uh just to see how many things we've been able to accomplish uh in the area and uh being able to do so, a lot of the stuff that we looked at when we were touring around was on the north side of town near Paradigm Storage and starting with paradigm storage, that's where uh Ryan and myself came to uh know each other and we uh put together a successful storage complex. But the one thing that we kept hearing about in these storage complexes, I mean, Eric uh Godalia from uh Godalia Real Estate had called us a couple of times saying, Rob, I these guys really want to put a one-bedroom unit in these storage units. Like, can we do it? And I get to have to tell him no. And you know, knowing uh how power powerful Eric is, I always hate to be the pair of bad news with him for fear that he'll go to someone else that may tell him the same thing. So we uh we kept telling them that. And this was kind of this project kind of spurred from that conversation as there was available real estate uh adjacent to paradigm storage, so they already had familiarity with the location, and it turned into what if we did a big storage unit and just added some residential on top? Is there a market for this? And and I don't mean to speak on behalf of Eric, but he'll tell you there was. And uh you know, there's been a lot of interest. I know you guys have been here sending out information on a daily basis regarding these things. So the next challenge that we ended up with is how do we how do we one start this project? Two, how do we take something that's that's really a good idea and turn it into a great idea? That's where uh Stephen Beagle comes in and and he's gonna help the thing go nationwide. I know Ryan you'll talk a little bit about that as we go along, but it has been uh exciting to be a part of where this is going. And we just received our approvals from city council for both Jim and the Barnard Caves on March 11th, and it was unanimous. And it's because the city has great vision, much like the ownership has great vision. This project is going forward and it is an unstoppable machine right now, which is a great, great to be a part of.

SPEAKER_02:

Yeah, you know, Rob, that's a perfect lead-in to the the the idea of systematizing uh the barn cage. We've talked for many months now, you you and I and Ryan, we've gone back and forth on how to simplify the construction techniques that go into this. It is a box. I mean, there's no question about it. It's just a different kind of a box. It's a box that you live in, it's a box you keep your toys in. And if you can live in the same box that you keep your toys in, uh then you're money ahead, particularly in in coastal regions and in in places where you want to be secluded and in places where you want to enjoy your toys and your lifestyle, and it's it's really bringing about a different lifestyle. So the systematization of this uh entire you know uh idea is uh is unique. And we've set it up in such a way where we we hope that uh in the future you can you know basically order your package. I mean you can order it like General Motors when you order your automobile, you can order your barn cave and have it delivered, and it's uh it's it's it's tinker toys. You set it up and you floor it and you side it and you go as flexible as you want it to be in terms of your lifestyle inside.

SPEAKER_01:

Now, one thing that you'll see too is that like a lot of these houses that you'll see that are prefabricated, prefabricated is not really a new concept, but everything is on a smaller scale, and nothing has the power that this uh development has. You'll never see a prefabricated garage that's being built. You'll always see a smaller home that can be fit on a couple of trucks and brought out, and they lack character and a lot of times they lack sophistication. And I think sophistication, Stephen, you nailed that earlier at the beginning of the presentation. That's what this really is all about.

SPEAKER_00:

You know, let me let me kind of go back into this. This was perfect, guys. So going back to the capital stack hat, right? So kind of talking about you know the volatility in the market, you know, a lot of people were kind of concerned and waiting to see who was going to take the election. Still to this moment, we still haven't seen a lot of uh the inflation, uh, the cost of living coming down yet, along with you know hard cost and construction and so forth. So the idea going into this was plan for the worst, hope for the best, right? So, how do we create a business model that will sustain uh uh any type of market adjustments? And and I can go into I think I've gone into multiple uh podcasts in regards to my experience in 2008, but I lost everything. And I'm at that point now in my life where I'd rather be a little more conservative. So we looked at this from a standpoint of how can we get government contracts? How can you get you know certain support from cities to be able to build these? How can we keep our costs down where they're unbelievably desirable, but they're probably more on the uh attainable side uh than other homes in the area, but still have all the features, if not maybe more amenities. Uh, let's talk about insurance problems with stick-built properties. I mean, I can piggyback off a conversation all day long about State Farm and all the insurance companies leaving California. I mean, it it's what in in and I'll give you a quick background. When I moved my headquarters to Nashville in 21, during the pandemic, we came out of California. Uh, what was happening for I still manage a hundred million dollar debt fund. So for those of you that don't know me, I where I cut my teeth was actually in private lending construction finance. So I'm looking at things from two different uh uh perspectives and how we create this model. But uh what was happening is the technology and steel buildings were becoming you know just more advanced. And so people were coming to me for crowned up construction for barn dominiums, but they're really just single family homes. But when you were looking at as for everybody that has ever gotten a mortgage, you know, before you the lender cast the loan, you have to have an insurance policy. We were on every loan that we ever wrote, we had to get that binder before we funded the loan, and we were comparing apples to apples in in regards to square footage, area, location, what have you, on a barn dominion metal steel-built property compared to a regular stick-built home, the insurance policy was significantly lower. So this has been a this has been a model moving forward for a long time. This isn't just anything new. So going into it, we were thinking about okay, well, we're out here in Lake Havasu, and Rob's going to touch on this in regards to labor problems. How can we create a way where we have less trades per project? We can build faster because while we're in essence doing all of our horizontal improvements, we're having the building being cut and built somewhere else. So now it goes on site and we erect these buildings and we're cutting our timeline. So even though the material costs may be a little higher, we can make it up with trades, labor, and speed. And ultimately, we can try to provide the cost savings back over to the end user, thinking forward about insurance and so forth, trying to keep those costs down for uh for uh your monthly nut. So those are the things that we want to look at. So again, knowing from a design beginning blank slate, how do we create something that'll give us sustainability as a firm, open up doors for investors, have a well-running oiled business? Now it's time to bring in the sophistication, knowing where the world's going. And here we go. So um I'll I'll kind of I won't go much farther onto that. So um uh Steven, did you want to touch on anything else or do you want to go ahead and go into the uh the next uh let's go in let's go into the um into the 40 by 90 design uh and pull up those renderings and those diagrams.

SPEAKER_02:

So here you see uh the example. This is the prototype. So this is the first of a series. There's a smaller prototype coming up, which is 28 by 76, but here is the prototype design for the 40 by 90 uh barncape. And it is it's an enormous structure. So if we go from here, the rendering to the floor plans, uh you'll see uh some of the technology that we've already discussed in terms of uh you know the view panels, the glass floor panels, uh, the pneumatic elevator. You'll see those if we can go to the next frame. There you go. So these are our floor plans, like you would see in any design. But what is unique here is the opportunity to live above the vehicles and the uh the the special things that you've you know struggled to achieve and you've you've achieved, and you have your toys, and it's all inclusive. The stair tower comes up, uh the elevator tower is shown. Uh it can be a pneumatic elevator. The way we've designed them, they're pneumatic. It can be a traction elevator with a hoist bar, or it can be a um you know hydraulic elevator with a piston. So any of that will work here, but it's a very flexible space. The uh this is a three-bedroom level. This is a large floor plan, 40 by 90 is large. So you have three bedrooms on the main level, the main living level, and then the master suite above is uh ginormous, uh luxurious. It up it offers the opportunity for private living above with a a bathroom that's uh you know a major, a major investment in that bat bathroom. So this is the the high end of the barn cave. This is the 40 by 90. The uh the investment opportunity in the 28s by 76 are uh they're gonna be scaled down, but the idea here we go big first and design the structural system first, and then scaling it down is easier, and it becomes uh much more uh conventional as we scale it down. So that's uh let's go to the elevations on the next page. There you go. You see what we're talking about? Some of the siding panels here are metal siding, you know, conventional metal siding. Some of it is what we have been referring to as Nietzsche Ha. I mean, it is a a brand name. Even though Nietzsche ha comes from Japan, the actual production of the material is here in Macon, Georgia. So this is all domestic-made material. Everything we're showing here is made in the USA. So the Nietzsche Ha products are are inert, it's cementitious, it's a fiber cement board that is used to achieve that uh that wood tone that you're seeing that looks like cedar. The uh the railing systems and the uh balcony systems, uh they are they're not concrete, they are open for we're trying to be lightweight and sophisticated in the sense that we want the rain to come through, and the railing systems are are perforated metal for the most part, and uh that's the idea. We you know investing in glass railing systems, although that can happen, is expensive. So we're keeping it fairly uh inexpensive by going with perforated metal in both the Down platforms and railing.

SPEAKER_00:

Steven, one more thing. So for those of you, thank you for that. That's that these this the takeaway, too, for this here, guys, when you you heard him say that the manufacturing of this product is here in Michigan. I think some of that probably got your ears to pop up with all the things that are going on politically and tariffs and so forth. So these are conversations that we have literally on a daily basis with our team. Where can we get the product here? How can we not keep our costs down? How can how can we keep our timelines the same? Those are the things that I want you guys to pay attention to because these are the most common questions because it's relevant. Um, on top of that, what we are doing, if if if some of you have caught on, we're also building this and manufacturing this in a way where you can go more luxury or you can keep your costs down and try to do it more on a on a high dense, kind of like what we're gonna do with the barn caves here in Lake Kavasu, but a little more cost effective and try to pop again pan that off or pawn that off to savings for your end user. So by being able to go big first, we're gonna get the kinks out and then be able to, in essence, uh manufacture these at at uh a speed nobody's seen before. Now, to you know, a last thing uh that I'll add to this component is the manufacturing side. What we're doing here locally is we have a manufacturer that's helping us with all of our structural steel. So all of our manufacturing of most of the structural will be right here in Lake Avaso. So it's all under one umbrella, in essence. That's going to help us with timelines. Now, when I went back and said originally, you know, we're looking at a line of credit for JP Morgan, not just to build these, you know, uh for our own projects, but we can get to a point where we white label this product and open the doors for other developers across the country to buy these buildings from us and then pop them up on their own site. So the this this model isn't just for the barn caves here. We're thinking much larger picture. And really what's happened to open those doors was the amount of interest we've received since we've even started talking about this product here in Lake Avasu. It's gone across the country. I have a group out of Colorado that wants to order 720 units of these from us, which is a$40 million receivable. So going in and obtaining a line of credit at that size is much easier when you already have well-known builders that are in some cases are uh nationally known builders that are going to us going, hey, you're onto something. Can we sit down and talk? And then obviously bringing in the pedigree with Steven and Rob that really adds to the fire. So yeah, I want you guys to think really big picture when you're going out to raise the capital, you need to have a much further forecast of planning because that means that the heart going into it on something like this, there's there's a lot more into it because we're all looking at a much larger play here. So, okay, sorry, I'll uh I'll move on to that. Rob, is there anything you want to add to that?

SPEAKER_01:

Yeah, one thing that's important to note is as Steven had mentioned a little bit earlier in the project in the webinar, is that you know this is going to be designed almost like if you're buying a luxury vehicle, you could go on to the customizer and you can pick your finishes. You'll see in the what's uh depicted on the screen, you've got some brown color tone, which is the Nietzsche Hop panel, and you've got some of the metal panel. Those can be you know customized where you'd like them on the building. So you could really make this a really personalized uh project as well.

SPEAKER_02:

And that's exactly right. So the the slides that are now up, you know, these are the glass floor panels that uh allow you to you basically walk across the top of your vehicles and look down and admire them and show people. Um it's a it's an interesting concept to be able to view on the lower level. It allows natural light to come in through the windows and penetrate the floor, so you save money on artificial lighting. It's just one of the added benefits here. And this the slide prior to back up one slide, these are the pneumatic elevators. I mean, these are vacuum-assisted elevators. Uh they are, in fact, large enough to get wheelchairs on for ADA compliance. They're they're large enough, in fact, to get gurneys on if you had to go there on the largest units. But this is a vacuum system. So you have a series of pumps, they're located uh on the top of the building, and it allows you to get on, push a button, and silently go up floor to floor. In this case, with the 40 by 90, it's a three-story, three-stop deal. But you can get on the elevator and enjoy the ride uh with uh with no noise and no friction. That's different than what we experience in a normal office building or in a normal residence where you have an elevator. So then uh, you know, going forward back to the glass floors and then to the next slide. Uh let's go beyond there. So here's the the smart connect fire sprinkler system, where the sprinkler that would be located uh predominant on all floors, but predominantly on the lower level. If there happens to be a fire event, if there happens to be smoke that is detected, this thing rotates around, identifies it, senses it, and puts it out. So you don't end up sprinkling the entire house and ruining your entire you know investment. You end up you know focusing the uh the fire suppression where it belongs. And then you see the McNichol Planck system on the right. This is this is the lightest weight system that we could find that's commercially available without inventing our own, but it's the lightest weight material that we could find for uh modularizing the floor plates. So you lay these in between a 12 by 12 uh system. These are planks, and then you can put a wood floor over it, or you can put a concrete floor over it, or you can put some sort of vinyl floor over it, and it allows you to have the lightest weight structural support system for the floor. And it even goes out to the balcony where you can have the open grating, the open grate balcony, and the uh the the punched uh railing system as opposed to a glass railing system. So you end up with a metal punched railing system. So those are those are the ideas that are being incorporated into the barn caves, and they are as simple as we can make it, uh, but also uh as fun as we can make it.

SPEAKER_00:

So I have to I have to laugh a little bit about our questions because Mr. Chris over here, which is one of our clients and investors, he's a firefighter, and he's over here going, Well, I know a thing or two about fire. If any of you guys are looking at the questions, but it's true, he said the water will travel through the house anyways, if the whole thing's inflamed, dude. Remember, you have the he's talking about the main lower level, which you have all of your fuel and RVs and so forth. And I'm not trying to sell you on anything because you're Mr. Firefighter. So, but the idea is to try to get it when it's the getting's good early on. That's the whole point to that technology. So hopefully, if something were to pop off or you would say, I which is really common, you have a a um uh let's take a trickle charger or something that kind of catches fire and it identifies that it's it's on it right away. You know, that type of stuff's really the idea. And then Robert, I already knew you'd be chiming in. He wants to put this on his his Harley Davidson. I want mine all done in Harley Davidson. I think you probably could. You could probably customize and fabricate maybe a cover for it or something. I think that would be kind of cool. So all right, so all right, so let's kind of let's uh let's open up any more questions for anybody else. And then if not, then we're gonna tee off a little bit more. Um, I'll ask these gentlemen some questions, and then maybe then I'll make you guys think a little bit more on how to ask, uh maybe maybe a little further from there. But with uh with that said, here here's kind of you know a little bit more color on my end. Again, kind of coming from the operator side, uh exit side, how are we gonna sell these barn caves? You know, I think all of that's really. Important, um, clearly, because we don't make money until we sell them, and we got to be able to um build build demand. So, and I'm gonna let Rob kind of tee off on this because he's so integrated with the city and the community much more than I am, and he'll just kind of give you an idea of the demand for these things. And it's even, you know, prior prior to me reaching out to him, uh, he was already working with other clients that really wanted to design barn dominiums. So this is really kind of a trend and movement that, you know, is I mean, it's just black and white, you can see it everywhere. You know, even Home Deeper, I think you can go to Home Deeper or Lowe's or something and buy a building for$30,000 and pop them up, and it's a little barn dominion now. So it's pretty wild. So here's, you know, I think you guys, some of you, I know a lot of you guys are new here, but I'm gonna just kind of share real quickly, you know, one of the things that happened when we were going into the modeling, financial modeling of this project was, you know, when you build something, uh, you build a community of residential here in Lake Avasu, due to the heat, you have to have a pool. And obviously, our lot lines, this is a smaller um, you know, product, a lot more dense uh as far as the uh the homes are a lot closer. You don't have much of a backyard, so therefore you don't have room for a pool. So we wanted to create a community center which was desirable where people want to go and be there every weekend because they have their friends there and it's really fun. So when we were looking at the design of the pool and the little community center, we quickly realized two things. One, the community center really doesn't have any value, and two, the HOA cost to maintain that pool, the ENO, uh the community center was pretty high. And we didn't want to pawn those HOAs back over to or the cost over to of the HOAs over to our unit owners. Well, here in Lake Avasu, because it's so, you know, this is a second home community. A lot of people are focused on you know, they're overhead. You have a lot of baby boomers, is is is the number one buying uh buyers here. You know, they're in this what I call balling on a budget, right? They're on fixed income, they really try to keep their their costs down, but have that great lifestyle. So HOAs, even for here in this project, we're the cheapest in the area, and we have millionaires buying these things because the HOAs are so cheap. So it even though, you know, it's ironic because they do well, they still are concerned, you know, of what those maintenance costs are, and I really have to agree with that. So, with that, what happened was is we looked at that community center and go, okay, for us to build something that is somewhat desirable, a little fit fitness center pool, what have you, that building has no value if it's sitting inside the residential community on one parcel. It's really just an amenity for that residential. So, as I again was modeling it, I go, well, man, I wish I could just make this gym a little bit bigger, open it up to the public. And and one thing out here in Lake Avasu is the gyms out here are just not really up to standard or up to par. You know, if you're you come from any other city in the country for the most part, you're probably gonna have a little bit better of a product than what's already existing here. And I say that respectfully for the other owners, but it's just they haven't been uh they have there's really not enough buildings out here to probably build anything nicer, to be honest with you. So when we when we looked at it, I go, well, why don't we build this thing a little bit better? Open it up to the community, knowing how much demand for building and development's coming to the north side. By the way, that whole there's 630 acres right on the left-hand side of this here, guys, west of we're kind of flying over the water here, but on the left-hand side, west side of the mall, 630 acres just went to auction. I think this week, right, Rob?

SPEAKER_01:

Yes.

SPEAKER_00:

Yeah, so there's there's a developer that's buying that. There's a bunch of you know, uh uh home builders out here looking to uh start building here over the next five years. So I think this area is just we're where I think we're a little bit afront of it, and I think we're we're our prime as far as timeline. But however, with that said, what's happened is we took the gym and we separated it from the residential. It's all under one investment, guys. But now that building has value because it's open to the public, and commercial real estate is always based on income approach. How much income can that building produce will give its its value? Well, kind of poking around and me being out here for 35 years and knowing who's you know, kind of would join this gym. And with the holistic approach and health and wellness being the fastest growing uh industry right now uh in the world, uh, due to baby boomers and so forth, healthcare, we realized that it would probably be smarter for us to build something a little bit bigger, a little more grand, and create a launch pad for what the residential product will look like by making the gym our the kind of the focal point uh and and again that community component. So now we separated that, it generates its own come. Now that now that building has value. So in my Proforma, I haven't even included what the value of that building is. Everything inside my pro forma is just based on sales of the residential. So ultimately what's happening is that gym could be worth$10 million. It could be worth$7 million. By the time we exit this product, the idea is to see how much money we can generate, but that increases the returns to our investors, which again, I have not put in my Proforma. So we're a lot more conservative than I think most people have realized that we've created with inside our modeling. But what that's done, guys, is it's it's opened up the doors for other uh investors, institutions to go, well, that's a brilliant idea. You're keeping the HOAs lower for the residential, you're giving access to your owners, homeowners to the community center. The community center is open to the public, it's generating more income. Now the building has value. Now you have a backstop. So let's say, for example, which is one of my biggest questions, is hey, Ryan, you know, let's say I have a sticky feeling that's going to produce a significant amount of income within year two or three. But let's say we go over construction, right? Or we go over budget as an example. Well, the idea is if I had a revenue stream that can kind of help advance maybe some overages on the construction, that'd be killer. So not a lot of developers have figured out how to create capital events like that early on, where it is fruitful enough to be able to have access to a slush fund to keep advancing the project. So therefore, I'm not calling my investors and say, hey, are you sitting down standing up? You know, I need you to sit down, I need more money, you know. And uh, even though that's with inside your investment documents, and I may call you and say, hey, I need it. I I'm I'm trying to hedge that risk now, right? And that's really what these banks want to see, anyways, and investors. Nobody wants to have you call them and say, Hey, Ryan, I'm out here, I'm going to Italy with my grandkids, or I'm going on a cruise, and you're telling me you need more money. You know, I'm waiting for the money to come back to me. I don't want, you know, so it's those things that you really got to be sensitive to, but you want to know where the market's going, where, you know, these sophisticated wealth managers and RIAs, how they're modeling risk now moving forward. And ultimately, it's kind of just ears to the ground and then providing additional data separate to what you find on Census Bureau and allowing people to really see what it is they're getting. And you you if for those of you you guys will all laugh, these the Census Bureau is always wrong. It's like Zillow on your house. Don't believe in it. If your wife calls you and says, Hey, honey, we should sell our house, it's worth this, just don't just bring it down like 10%. No, but uh, anyways, yeah. So I uh I just want to share a little bit of color on that. So with that said, uh Steven, it let me let me bring this back to you a little bit.

SPEAKER_02:

So, you know, the idea here is is obvious. I mean, it is as simple as we can make it. The barn cave concept uh uh is is going to be popular, it's already popular. It is a simple box that we have designed deliberately to be flexible. It covers uh it covers the toys, it covers the expensive things that you've invested money in, it allows you to maintain them easily, and you you live in the same box with those toys. The upper levels, the living levels, the entertainment levels, the fun levels, those are flexible. You modify your walls to your liking. You could almost move the walls around on coasters. You could design your wall system to be on wheels so you can move your walls around on a floor plate. It is that flexible. The bearing system is out to out, meaning exterior wall to exterior wall. So um it it allows you the probably the most flexibility you could have inside of a box. And Rob, I'm gonna touse it to you now to talk about that whole concept, which is really yours. It began with you.

SPEAKER_01:

Well, I appreciate that. The one thing that uh that really came up with these barn caves was a lot of our clients were looking to build them and kind of go off the grid, quote unquote. So they were looking at taking uh prefabricated metal buildings and then building uh you know a stick frame house inside of them. And most of them had the same thing in common, actually, every one of them did. It was a large garage with a small uh space attached to it that they would live in. And the reason they were all doing it was for uh cost efficiencies. I mean, they designed they wanted something that you know they could build cheaply, quickly. Um, just as a side note, you know, I went to the to the internet much like Ryan just told me not to, but uh I was able to pull up the one in five construction workers in uh United States right now, is over the age of 55. And in Mojave County, I'll challenge you to find me a construction company that doesn't have superintendents that are over 65. Um, it really is just a it's a generational construction deal. And I think many of the kids are getting into doing the uh video game type stuff as opposed to the actual working with their hands. That was another thing that's it's kind of a side note that I don't mean to get off topic on, but it's one of the reasons I like the barn cave concept of what we're looking at here with this uh modulization of the concept, because at some point we're gonna have to get more creative because there's only so many people we can can build right now. This gives that opportunity. But coming back to the barn cave concept, uh the barn cave concept, when we were looking at it, was we have all this airspace above the barn cave, we're not doing anything with. And we obviously, for a lot of good reasons, land is expensive here in Lake Havasu, and and Ryan has investors that he needs to uh you know uh stay true to. So the idea was let's take all that space that we just talked about being on the same level as the barn cave itself, and then just put it on top of the the roof of the barn caves or of the garage, so to speak. Um, and that's how it came to be. Uh, Ryan's challenge was I want something that, you know, this is a second or third home. I want lock and leaf capabilities, I want it to be masculine in nature. I want to see the structure. Let's make a pre-engineered metal building because hey, you already told me everyone wants to build a pre-engineered metal building and put a residential component inside of it. Let's turn it on its ear and let's go vertical with it. We need the the density to get this thing to pencil. We started with a concept that had what 114 units and end up scaling it down to 97. That's just here in Lake Havasu. Now, with 720 in Colorado and a number of them all around, I mean, density is going to be what speaks. So, in order to make this concept work, now we're talking about these almost as if they're they're throwaway type units in some aspect, like the 40 by 90 is is huge. It's not just huge, it's gargantuanly huge. Uh, when we're talking about the barn cave itself that we're talking about, like havasy, these are still nothing to laugh about. This is like 3,000 square feet of living with a loft living that's open of another 1500 to 1200 square feet. Where are you gonna buy a 4,200 square foot home with a garage that's 3,000 plus square feet? Like these things are huge. Yes, they're they're efficient, and yes, that they're being created to uh you know build a community on, and also we want to make sure that we can modulate them and send them all over the country, but you're still getting 4,200 square feet of living space in the larger unit with two with two balconies, drive-through garages, elevators. Yeah, I mean, like this is a big deal. So, but that was where the design concept came from. But it was how do we make sure that we have something that's good? Uh growing up, and Steven, I'm sure, has some stories he can tell you about his uh affording architecture. But you know, the first thing I noticed when I was growing up was I always seen thought millionaires lived in loft houses, and I just that's how this kind of came up was I always wanted to live in a loft house. So we started thinking about okay, well, if you can afford like two stories of open space, you must be a millionaire. And that's how, like when I was 12, that's what I was thinking. And honestly, it still kind of holds true because this is designed with a gigantic loft, uh, two-story open space, plenty of glass, views where you got them. I mean, it's it's really a great product.

SPEAKER_02:

My relatable story goes back to uh when I was in school and trying to be an architect. Um, I always wanted to live in a silo. I grew up on a farm, so we had a big concrete silo. And I used to walk into that silo, which was maybe 24 feet in diameter. It was a big silo. I'd walk in there and I'd look up and I'd see nothing but light at the top. And I always wanted to know what it would be like to you know put a platform and then another platform and another platform and then dome over the roof and have a skylight at the top. So my uh my vertical orientation of architecture came from a silo on the farm. Now the barn cave is a rectangular box, but it's the same concept. So now we we go vertical with what we can operate on the ground from lawn mowers to RVs to slingshots and motorcycles, whatever it is that goes on the lower level. We live above it, and it's the same concept. So um I I've realized my goal.

SPEAKER_00:

You know, and it's it's so cool, guys, because both Steven and Rob, you know, they they have a lot of clients. I mean, Steven's got a couple billion-dollar projects that he's getting off the ground. Steve Rob's the he dominates the space out here all in Mojave County, not only from homes, but anything with steel buildings. I think they just completely own the space here. So, you know, to be able to have gentlemen that are just this excited about it and they take my calls all the time, it's pretty, it's pretty cool. We have really a community of people that are just super excited. And and I mean, I have subs, like some of my subs are literally writing checks and investing into the project, you know. And so it you have, I think that's you know, for me as a an operator and a business owner, when you have everybody bought in and you have your entire team that are so excited about it, and and they see, you know, they're they're talking to their friends and their family, and they're showing renderings and pictures, and everyone's so excited, and it's just nothing better when you have that type of support. Then you go to the city, and the city's just seven zero across the board on everything. And you're like, yeah, you so if you're getting that much support, the likelihood of the investment to go well goes up really. Now it's it's our it's our job really to to value engineer and execute on the development. That is really, you know, the the the main point now. And and uh and and always try to be innovative and and ears to the ground, how can we shift, how can we do things, and what's going on in the market, and so forth. What really caught our attention the most is the interest. So not only do we have investors that are investing, we have investors that are investing and wanting to own a unit. So what's happened? I think we have 27 out of the 93 or 97 that we have accounted for already of investors that have invested and bought a unit. So what that's doing now is the risk continues to drop because investors are going, I want one of these, so I'll invest now for the development, but then I'll take one at the very end. So if you have investors that are investing and then taking over units at the end, your risk continues to drop because now you have a built-in buyer pool. And then on top of that, we have a group, I think just on my my and our CRM alone, we have over 500 interested buyers right here locally. We only have 90, 97 of these things. And then we also have, you know, our broker, uh, which everybody knows about is Eric Adalia, he's number one in the city, number two, I think, in the state, number, I think 20 in the country. So his group, you know, they did 240 million last year just here in Lake Havasu alone. It's quite a bit. So he he's got over 500 people, and then another competitive brokerage calls me and goes, Hey, would you guys do co-brokering? And I'm like, Why? He goes, Because we have a list of over 500 people that want the so it's it's pretty wild on the amount of people that want this, but it fits the culture here, and really it's the garages. I had another guy just buy uh a garage for me here at Paradigm Storage, and he he bought a 28 by 60, and he comes to me and goes, I don't have enough room, I need more room. And the the ongoing joke here in the city is you drive by somebody's RV garage in their home, their garage is bigger than their their living space, and the and the toys that are sitting inside their garage is worth more than the house. And that is so true out here. And it's not even necessarily the toys. I mean, you have all kinds of people store everything you can imagine. You have contractors that need room, you have, you know, it's just there's so many people that need storage for many reasons. And it's it's uh it's uh probably one of the most desirable asset classes if you just look at it from an institutional space. So, you know, it seems to hold true to what people are trying to do here. It makes sense across the country, you know, people even storing for store uh storing farm equipment. You know, if you have a little farm and you want to pop up a residential place, you could pop one of these up and then you could store some of your equipment in there. I mean, we're we're doing it on our spot. So it's stuff like that that I think it just um it caters to a much larger group, and and that's ultimately what we're trying to do that'll have a good run. So, with that said, guys, I am pretty much done on my spill. So if anybody has any more things to say, Rob, I don't know if you want to talk on anything else, but I am pretty much good on my end, so we can start uh opening up for questions.

SPEAKER_01:

Yeah, I don't have anything on my end, right? I think we've covered everything.

SPEAKER_02:

I think questions would be good at this at this point.

SPEAKER_00:

Okay, let's see, here we go. Look, here comes Chris. Chris, we'll just jump on the phone. Mr. Mr. Fire, Mr. Fireman over here. Chris, we'll just jump on the phone with me, you, and maybe Steven or Rob, and we'll talk about it. But uh, yeah, this is he's saying the project's getting bigger, bigger, but yeah. In fact, just to kind of give you guys an idea, we did change the setbacks a little bit. I think we went from three foot to five foot setbacks. So we actually went a little bit bigger. Um, and and the lar the units are all a little bit larger too. We wanted something just a little bit more I hope nobody takes offenses, masculine. When you drive into this property and you drive through, like if anybody drives through my my storage now, I got 60 foot wide you know driveways with 14-foot tall garages, and I have these 3D pop-outs that are just catches everybody's attention. It's a really cool design. When you drive through here, it just feels huge, it feels strong. When you have two more stories of residential with a pitched roof, it's just so tall, it's huge. And I think it's just this kind of it's it's just a very masculine uh development that I think people really appreciate. And what's even more wild is how many women want these things. There though, there's so many women that go, well, because they think less maintenance, less overhead. They're the ones really focusing on budgeting for the family. So a lot of the questions I'm getting that has really kind of come down to cost of inefficiency and certain you know practices that we're implementing is really kind of from that side. So again, we're implementing the technology from water, you know, fire suppression to uh solar. I haven't even talked on that yet. And the reason I haven't is because we're still going through the modeling of that. And if we could push that in, then my investors get the limited partnership um tax credits, and then the homeowner gets the actual uh the the solar within the purchase, and I'm not increasing the the cost of the the um the unit. And it's simply because this is literally it's a solar field on top, it's 10,000 plus unit, you know, solar uh panel. So it's much bigger. We're work we're trying to work on some deals and how that would look like for from a financial side, and maybe some some uh support from the city and and state. But at the end of the day, once I have that all narrowed down, I'll bring it to everyone's attention. But I know it's things like that that we're trying to be and continue to be, you know, forward thinking to to benefit not only the end users, but our investors and us as well from a brand and a product that we are really trying to uh set a tone nationwide. So other than that, I uh I uh you know I yield back to questions here. Let's see, Chris, thanks. But are you still going doing on-site tours next week? Ron, yes, I am. I have a couple more already set up, but you are more than welcome to shoot me a call, email, text, and I will uh I'll set you up out here if you want. And I know, by the way, I know a lot of investors that you guys are on. Uh a lot of people are also asking me if they can refer people my way. Um, absolutely. I mean, obviously, referrals are always the best uh income source for us as far as capital raising, so please do. Um that you would not be able to reside in the units in the no, yes, you can absolutely reside. The only thing that we're not doing in uh not allowing in the in these uh in these are in this out area is um short uh short-term rentals. So Airbnb. We do not want the Airbnb uh wild kind of crazy lifestyle that Lake Havasu kind of tip typically tracks. Um the reason is is a lot of my investors are buying these, and along with my friends are buying them. I don't like that stuff next to my house if I own one. Again, I'm trying to create a brand that's a lot more polished. I don't want that around me, I'll be honest with you. And so even though I know I have had to pass on, you know, investors because they're like, you're not gonna open up the Airbnb, no way, but they're the those investors do not know the Lake Havasu area. So if they were to know the Lake Havasu area, they'll say, no, we don't want Airbnb. Um, just simply because people's homes are getting beat up. In fact, here at Paradigm Storage, we probably had seven or eight buyers uh sell their homes here in in Havasu in 1031 exchange and buying these uh storage units just for the cash flow, but no maintenance, no headaches, and so on and so forth. So, but yes, you can live in them. We're looking for really what we wanted to do is look at it from a way where it's more attainable, so you can have full-time buyers. But we also know just given the nature of Lake Havasu, you're gonna have kind of the lock and key second home uh buyers as well. You can do long-term rentals, but we're gonna do minimum six months. And some of these and some of these investors have been pretty smart. They said, well, if you're renting out the unit, can you rent out the storage space too? And I'm like, there you go. So if you look at it from a rental model and you're doing long-term rentals, you can get the returns to look pretty decent because you can rent out the storage space as if it was a regular storage for boat, and then you obviously have the uh residential site above it too. Uh uh, some of the people that have that said, hey, if I'm gonna buy there and live there, I don't really have a boat. I have maybe some jet skis. Can I rent the space out too? Absolutely. If you live out here, you probably have some friend in California that needs a space for a boat. And so you can, you know, um, you know, rent out a portion of your garage as well and help with your mortgage payment. So those are the things that I think has really opened up the doors to having more buyers as well. And that's ultimately what we want to do is cast the net as far and wide as we possibly can to be successful and uh bringing down our cost, building something that people want, bar dominiums are trendy, you know, the it's a killer design, three stories, elevator, you know, big garages. It just seems to fit the the world at the moment. So okay, let's see. Any estimate on air conditioning cost of these? I do have an estimate on it, um, but I am working with my current uh trade right now to uh kind of renegotiate because he's he's getting a lot of buying horsepower from us. I ordered uh$500,000 worth of units right here in at Paradigm. And uh I have several, I have three other projects going on here as well. So he gets a nice receivable from a private equity farm to go get, you know, uh for to with his um what do you call it? His supply house. So he uh we're gonna we're gonna work a deal. So I appreciate the question though. Other than that, guys, I am good. If anybody needs anything, this will be recorded. You can watch this over again. Uh, if you want the animation video, that is also on our YouTube. We have other podcasts on there uh with Steven and Rob, really kind of talking about the design of this as well, maybe a little bit more in depth. I we do have my documentary, how it is that we really came about this and my relationship with my mother, and how I rebuilt and and found her after all these years out in East Tennessee, and and uh I wanted to re-re-calibrate a relationship with her. And the house that I bought out there had an old barn that was built in I think 1892 that I saw. And I went in there and remodeled it and put it built a three-bedroom, two-bath house inside of an old barn. And that really kind of kicked off the whole love story of the barn cave. So um thank you guys all for the support after all this time. Really appreciate it. This again will be up for everybody on the platform to watch. And uh, there's a lot of heart here, and uh, I hope you guys see the fruit. So thank you all so very much. So thanks, guys. I really appreciate your time. We'll I'll follow up with you guys and debrief after this.

Head Shot

Ryan Garland

Host