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What is up, my Pro Design Builder family? I'm Sam, also known as the Pro Design Builder. I'm the best in the business, and it's not even close. So I felt like I haven't done one of these in a while, which it's it's kind of been a little bit of time, but I've been doing a good job of continuing to educate you guys, dropping nuggets where I can when I can't go live. Uh I've had uh some some health issues that I'm still recovering from, but I wanted to come on today and kind of add value to you guys, add value to this group, right? So, one of the things that this training is about is what is zoning laws. So, but before we get into that, this group is specifically for real estate investors who are looking to make the transition into real estate development, and for you to make that transition, you really have to understand the name of the game, right? So that's why zoning is going to be important. So, who am I? What do I do? You know, how am I qualified to be able to educate when it comes to this subject topic, right? So I'll just give you a little bit about my backstory. So I I've been a real estate investor, I was a real estate investor for five years, and um I got into design build for the last eight years. If you don't know what know what design build is, is I manage the project from concept to completion with a client, right? So the time they meet me and they have these inspirations, they have these thoughts on where they want to go, they sit down with me, I put it down on paper, and then we start to build on top of it, try to understand the whys attached to why they want to live the way they want to live, and then from there, you know, we get our architect involved to start putting together lines, drawings, and plans. We get our designer involved to do the selection so we could narrow down on the price, and that's been my job for the last eight years. So when it comes to anything house related, uh, I know a house like the back of my hand, right? So that's just kind of my story. So how I initially got into uh real estate was unforeseen. I didn't I didn't plan on it. So my wife originally got into med school, she was supposed to go to med school in the islands, and she pretty much was like, surprise, I don't want to go. And I'm not gonna lie, I was crushed. I'm a I'm a power couple type of guy. I I work hard, I generally um super ambitious, I've always been that way. And when she when she told me she didn't want to go, I was like, Well, we gotta figure something out. At the time, I owned a body shop and a car dealership, and I was gonna be paying for med school. So she said, Why don't we look into real estate? And that's when she handed me the book, Rich Dad, Poor Dad. So I went through Rich Dad Poor Dad, I devoured it, and you know, it spoke to me. We went to the seminar, that spoke to me, and then from there I needed one more seminar to kind of give me the confidence to start pressing the buttons that the things that I was learning, and that's what I did. So I had a friend at the title company, I was super green, and the difference is taking messy action, right? And I tell you the story specifically for a reason. I was so green I didn't know what an escrow was, I didn't know really the contract language, but I knew I had my buddy Mike that was gonna do the title work, and he would guide me on exactly what I need to do when I got a property in a contract. So I'd get a property in a contract, I'll call Mike up. I was like, Mike, what do I do? Where do I put uh for a deposit? Or da da da da. And he would just help guide me and gave me that confidence, and then I got my first deal in the contract. So uh that was my start into real estate uh initially as a wholeseller, and then I quickly decided that I wanted to be a rehabber. So on my first deal, I hired a contractor, I fired a contractor. I hired a second contractor, I fired a second contractor. I hired a third contractor, and on my third contractor, I got through the project, thank God the numbers were right, it made sense. I we made some money, my investor made money uh on the deal, but I quickly realized that this business had contractor problems, right? And I was never gonna be happy with the level of execution, with the the timing, with the planning of what I was seeing from the contracting community, and after getting burned like that, then I started just managing my own projects. I was like, I could figure this out. So for the last five years, I started managing my own projects, getting in and out of rehabs very quickly. We'd be getting out of in and out of rehabs 45-50 days whole house renovation back on the market, triggering um uh uh I forget the name of the clause that that it triggers when you when you flip it to appraisal clause, um, when you flip it within 90 days. But that was kind of like my experience, and then that's where I gained uh some of my experience when it came to construction. And then I remember meeting my buddy Josh, and Josh was a big-time developer in Manhattan. He had 600 million under uh under contract with projects, he had another 400 million in the pipeline, and I sat down and and I talked to Josh, and I considered even um working for him uh to get the experience uh to become a developer. And I just remember leaving that meeting, and it was gonna be a big move for to move to Manhattan from Florida, but I was willing to do it to gain the experience, right? But I just remember leaving the meeting and I said to him, I think I'm gonna have to gain my development experience through construction, right? I think it just gave me a very different lens, a very technical lens on how to look at the construction from the ground up and educate me. It educated me in a very different way than uh other people maybe educated that are our developers, right? So, because I'm accustomed to handling every aspect of the planning process, I bring that to the table and understanding why timing is important and why material material selections up front is important to control costs, right? So that's the nature of my experience and the nature of how I became the pro design builder. And I continue to add to my bag, I'm an avid reader, uh, I'm constantly reading, you know, new material. So today, uh, although we're gonna talk about zoning, I wanted to talk about a little bit about what the current economics are, the current economic conditions are in the marketplace, right? So only true investors really look at it the way that I look at it. So I'm gonna just share my lens on what's going on uh in the current economy, right? So uh I I was talking to an investor friend that he's gonna be funding, you know, some some some uh projects for me in the future. But you know, one of the things I told him, I was like, hey, listen, um, when there's blood in the street, are you gonna be prepared to invest? And he goes, Yeah, I'm I'm I'm excited. I'm look um I want to look into it because da-da-da-da-da. So I just called him and I said, Hey, listen, blood's not fully in the street yet, but when the blood hits the street, then I it's gonna be time to to invest, right? So I know when times like this hit, it spikes fear, but this it spikes fear in everyone, right? It spike spikes fear if you're a homeowner, it spikes fear if you're a developer, it spikes fear uh in general of the general uh conditions of the economy, it does. That's what it does, right? But Warren Buffett said be uh be fearful when everybody is not, and and be scared. Essentially, what it says is when everybody's fearful, get in the water, right? Get in the water, all right. That's that's where you're gonna make your mark, and that's the signs of a true investor. So I wanted to talk about some of the market conditions and what is going on, and how you should be looking at it moving forward, right? So, for me, I just said to you, I'm looking for blood in the street, right? So, when there's blood in the street, that means there's opportunity that's gonna happen, right? And there's several different ways that I'm gonna position myself to get take advantage of the these opportunities, right? So, would I say today is the best time to absolutely invest? No, I will not say that, right? Because there needs to be more blood in the street, but I also want to educate you also on timing, right? So, developers that are coming to market right now or or had just come on the market, they're experiencing some turbulence right now. There's no question about it, there's no hiding the turbulence that is part of coming to market right now, right? But what developers do is they have a two to three year outlook into the future, and you're always anticipating and you always paying attention to what are the future conditions going to be like to make my investment work today, right? So, pricing is gonna be very important. So when there's blood in the street and you get an opportunity to get a parcel which you have no business getting, and you can get it cheap, either just knock the house down, leave the vacant lot, allow construction prices to come down because there's gonna be more of a collapse in the in the economy, then you start preparing your documentation to get your financing, and then in two years uh or three years, once your construction is complete, we're in a completely different economy. So that's how I'm looking at it. So I'm not rushing to uh jump into something right now. Uh I'm looking to um looking for opportunity, absolutely, and when I find that right opportunity, pull the trigger on it with the understanding that the outlook is two to three years into the future. But so I just wanted to make sure that I share that because you may not know exactly where you should be or how you should be looking at the the current economic conditions, but that's kind of how I'm looking at it, right? So we have currently we also have these tariff issues, which significantly affects construction costs, right? So because I am a builder, I see the cost increase first, right? Whether it's a sheet of drywall, whether it is lumber, and for us, we use a lot of concrete. You see those price increases first, so then that will increase the price on you as the developer, until that market tanks itself down, which it's unsustainable for it to stay like this forever, right? Then it becomes more predictable, right? And then when the market becomes more predictable, prices become more predictable, they have to come down because the consumers are not spending any money, and that's the position you want to be in as a developer. So that's kind of how my outlook, my personal outlook, is uh moving forward. I am looking for opportunities, I am looking to get things 40 cents on the dollar, you know, 50 cents on the dollar if it's possible. Looking to maybe if I could get a short sale opportunity in a prime location and I could get it at 50 cents on the dollar, knock the house down, be patient, you know, uh have a lower tax bill because I don't have structure on it, and just pay, you know, the taxes on the land costs. That's the position that I want to be in. And then when the time is right to build that that ideal property, then I pull the trigger. So that's kind of the position that uh I'm in right now, and how I'm looking at things moving forward. So let's talk and let's get into the the meat and potatoes of today's uh training. So, what is zoning laws, right? So, let me just give you the baseline of what zoning laws is and what zoning laws isn't. Alright, so zoning laws are local government regulations that dictate how land within specific areas or zones uh can be used. These regulations help cities and towns organize land use in a way that promotes health, safety, and general welfare of the community, right? So, one of the things that uh come to mind right away is zones is for uniformity, right? Because you don't want residential next to commercial or residential next to uh industrial, right? It creates uniformity that they keep industrial next to industrial, residential next to residential, multifamily, near more multifamily sort of projects or um mixed-use projects in you know certain areas, and all of that is very important and in how uh the cities decide to do their zoning maps, right? And once you understand the idea, what the city is looking to accomplish, then you're gonna quickly start to be able to identify how do you um find the highest and best use of that particular parcel, right? And that's the that's the name of the game when it comes to development, right? Maximizing the highest and best use or getting something rezoned to to to maximize the highest and best use uh of that particular parcel, right? So let's let's take let's take a deeper dive. So, what is the purpose of the zoning laws? We're gonna kind of break this down on what this is, all right, to separate uh incompatible land uses, right, keeping industrial facilities away from residential, which I just already shared, to control population densities and urban growth, to protect environmental resources and historical sites, to provide guidelines for building heights, uh lot sizes, and setbacks for streets. So, like I said, uniformity uh to regulate land use in terms of commercial, residential, agricultural, agricultural, and industrial activity. All right, each serves a different purpose, and they want to have those segmented, right? So we're gonna now we're gonna talk about the zoning types that I just mentioned there, all right. So you know what to expect once you identify what the terms are attached to certain zoning criteria, right? So uh R, which is residential, right? So we focus on one to four units. We uh that's considered still residential. Um, and uh so all right, so residential is R, all right, designed for homes, apartments, housing developments, zoning codes might uh specify single family as R1 or multifamily uh as R2, three, and four. All right, so sometimes if you need to get the zoning changed to maximize the highest and best use of that particular parcel, then you might hire a land use attorney, all right, and then they're gonna represent uh on your behalf uh why this certain land use and use specific examples of when the land use has changed to give you that designation that will improve the value of that particular parcel, right? So then there's commercial. Commercial is designed for businesses, whether there's offices, retail, restaurants, all right, that's commercial use, right? So uh I'm just giving you an introduction into these. Obviously, we focus on residential, one to four units, but it's good to know, always be prepared to add more to your bag, right? So then there's industrial, which is manufacturing, uh factories, warehouses, industrial facilities. That's considered uh industrial. Uh, mixed use allows a combination of residential and commercial, sometimes industrial use in the same place, right? So typically what you see, uh, especially depending on what part of the country that you are, the mixed use that you'll see is at the bottom, you'll see retail. Typically, it's more of a high-density city, you know, population center, right? You'll see retail at the bottom, and then at the top, you'll see residential, right? So if you ever want to get into you know um mixed use, uh, if you could find a creative way to maximize that retail that your current people that dwell in your mixed use will naturally draw into, then that will be a big win for you, right? So if you're thinking like that into the future, it puts you in a great position if you have a brand that serves your current tenants uh in that way, right? So then there's agricultural, right? Designed for farming, ranching, related activities, um, so plants, you know, sugar cane, coffee, or those are all considered, you know, uh agricultural, and then there's also special use, right? Which is uh recreational zones, historical districts, environmental protection areas with unique restrictions, right? So most of these things you're not going to encounter right now, but I just wanted to make an introduction so you understand fully how the city is looking at different zoning uh areas, so that's how they're looking at it, right? So, and they don't want to combine the two. So, your your primary um zoning type that you're gonna run into is R1, two, and and three, and depending on what you plan to do with your development, you know, that's the zoning types that you will encounter, right? So, how does zoning affect you, right? So if the zoning doesn't allow, if you say, hey, listen, Sam, I'm gonna buy this parcel or buy this house and knock it down, and then I'm gonna build a 30-foot-high two-story home, but the zoning restriction says you can only go up to the 25 feet. Is that a problem? Absolutely, it's a big problem, right? So, understanding your zoning laws will tell you exactly what your maximum height is and what your capacity for that particular parcel is, right? And you got to pay attention to all of those things. So, understanding entitlements, right? So, what are entitlements if you don't uh know what they are? Entitlements are legal rights granted by the government that allows the developer to use uh or or or alter a piece of land for a specific purpose. The entitlement process ensures that develop the development complies with local laws, environmental regulations, etc. Right? So let's talk about the types of uh entitles, which is gonna be uh important. And I don't want this to scare you off, right? So, some of the times if you're when you're dealing with entitlements, you're allowing your professional that you hire that's on your team to handle these um uh these changes that need to happen to the parcel, right? That's the land use attorney, but it's good to know and understand what they are and why they are important, all right. So um zoning variance, right? So if a property owner um wishes to develop their land in a way that does not conform to the current zoning regulations, but can apply for a variance, all right. So this allows the this allows for exceptions to rules such as building a taller structure or reducing the required setback. So I got a uh a story about when I owned the body shop. I mentioned that I mentioned that earlier, and what happened was the code enforcement was like circling our building out of nowhere for some reason, it got really hot in our area. We had all our licenses and stuff like that, and and And when we sat down with the landlord, we told them what type of business that we were, you know, starting. And they said, okay, yeah, we don't have a problem with that kind of business. Right? So that's what that was the landlord said. So then code enforcement was coming around saying, hey, listen, this type of business is not zoned for this. And we go, what are you talking about? When we leased from the landlord, they said that you know it was okay. But what ended up happening is I had to go to the city and get a zoning variance, right? So there was like five other businesses that represented the type of business that uh I was conducting. But you know, honestly, I'm the most savvy. So I went down to the city, I asked them exactly what they needed. I had to sit down with uh a committee, and I pitched the reason why this zoning variance is necessary, why other businesses are represented in here, and it creates a big calamity. You know, we're fully licensed, fully insured, you know, we we are you know fully compliant, and all we need is this zoning variance to be approved, so we can operate our business and add jobs. You got to speak your language, right? So they want to hear that you're adding jobs, you're to the you're bringing value to the community. So for my body shop, they approve me for my zoning variance, right? We got our business certificate, and then now we are good to go. Uh, and we are um official for our business type, right? So that's just one example of a zoning variance and how it could help you um before getting further down the road um when it comes to your new development project. As a matter of fact, you can't even get down the road with with your development project unless you get that that zoning variance. But all right, so then there's also rezoning, right? So, what what is rezoning? So if the if the land is zoned for the use that does not align with the with the desired development, the developer may apply for a rezoning. So, for example, if the developer may request that the parcel or the agricultural land be rezoned to residential or uh commercial use, right? So that's another option for for you as well, all right. So it depends on what's the city zoning map look like, and then how what are they forecasting into the future? Also, too, what are gonna be some of the needs attached in that example? We said agriculture to residential, what are gonna be some of the needs uh attached for that residential uh community to be built, right? So, what are they gonna require? They're gonna uh require um roads, street lights, uh these are the types of things that they'll make you pay for, right? If the city doesn't have a uh let's say like a pumping station for uh city water or something like that, you may need to build one, right? So, whatever you need to do, you factor that in, but you're gonna need to support for the rezoning, right? So um that's what that looks like, right? And there's also things like conditional use or or a CUP um permit, right? So these are permits granted for land uses that are generally not allowed under current zoning, but can be acceptable with uh certain conditions, right? So the cup might be required for special uses like schools, hospitals, religious buildings, uh, and residential zones, right? So it really all depends on what the need is to apply for that specific permit permit. All right, so then there's also uh planned unit development, right? Which is zoning designated um that allows for more flexible uh land use than traditional zoning laws, right? So it's typically involved high-scale development where residential, commercial, and uh recreational uses are mixed into one cohesive plan, right? So I don't know if you guys ever heard it of a master developer, right? So, what a master developer does is they'll take a big parcel, maybe sometimes several hundred acres, and in this master development is where you'll see this planned uh unit development. They'll build schools, they'll build parks, they'll build uh grocery stores, you know, commercial, they'll build residential, they'll build the whole community out, right? And it this typically takes about 10 to 15 years for this master development to be completed, but they'll build all the infrastructure needed to comply with the needs for the land use, right? So that's what a master developer is. So this is the type of permit that they would acquire for uh that particular parcel, right? So, and then also subdivision map approval, right? So once you subdivide all of the lots, then that's gonna need to be submitted and approved by the city um for that subdivision, you know, of the parcel, right? So and then after that, even after you get your approval, you always, always, always need building permits, right? So you will need to get building permits for each parcel um and uh opened and closed out uh for each thing that you're building, right? So you can't avoid that just because you got the approval does not mean that you don't have to submit the plans for each and get those approvals and pull that permit. So that's gonna be absolutely necessary. So um, so let's let's let's let's let's dive a little bit deeper. So, how zoning laws and entitlements impact real estate development. We're gonna give you a breakdown on what that looks like. So, the zoning laws and entitlements determine what kind of project can be built on a particular uh piece of land and how it must be constructed. So, navigating these regulations successfully is crucial in minimizing risk, optimizing land use, and maximizing the return on investment, right? So, we're going to talk about uh other things attached to that. So, let's talk about project feasibility. So, before purchasing land, developers must check zoning laws to determine whether whether the intended use, residential development or commercial, etc., is allowed. So if current zoning does not permit the intended use, rezoning or variance will be necessary, right? So that's how the game is played, right? And you want to probably do this under your due diligence period before you close on the land, right? So you might say, hey, contingent upon this approval, right? And then now that gives you out because if the if you don't get it, then now you have the ability to back out of the contract, right? So uh development timeline. So entitlement process can be lengthy, obtaining necessary approvals from local um authorities, neighborhood councils, and others. You got to also notify understanding that they have to notify all of the cities, they have to put it in the paper, you have to put out signage, all of this stuff. To if anybody has um grievances for what you're looking to do, they get their time to be heard uh at the city on what why or why not, all right, and then you also get your time on the benefits that it'll bring to the city, always lead with value that you are going to bring to that particular area um with with your project, all right. So there's also a couple things, there's always cost risk asset uh attached to doing anything, right? So uh being a developer is a risky business because you have so many different aspects that you are responsible for. So, but for me, it's easier because this is what I've done for the last eight years, uh, and knowing what to expect, and there is it is repetitive for me. So, um, but it all comes with inherent risk. Investing comes with inherent risk. So, rezoning or seeking variances often comes with application fees, legal costs, and the risk of denial. So, additional developers may need to adjust their plans uh to meet specific conditions imposed by the local government. So you you start out with a specific plan, right? That you submit to the city. Hey, listen, I want to do the variants. This is the project I want to build. Now they might come back and say, hey, listen, you know, because of the size of this, the setback is gonna be 10 feet or 20, 25 feet in the front, and then you know, 15 feet in the back, and then seven and a half on the sides or 10 on the sides. So then your building can't be 2800 square feet, it may be 2550, right? And then you now you have to readjust your plans to fit those parameters and to get the green light to move forward on the project. So those are the type of things that you should expect coming back from the city when you are looking to make these sort of um concessions, all right. So, community impact, all right. So, some developers face opposition from the local community and partnership. Uh, if if the project involves rezoning or changing the the character of the of the neighborhood, you're probably gonna get some pushback, right? It's gonna require some public hearings, and in those public hearings, you know, they do take into account um what the public is saying about the particular project. So I like to mine a specific area. Now, there's a reason why I do that because I'm pulling permits in that specific city, I'm seeing some of the same inspectors. If I need to, you know, call somebody, I've made relationships within the city that I can make a few phone calls, I could get things pushed through, and because they know Sam, they know Sam's about community, and uh they're more likely to you know give Sam the green light on this particular project, right? So now are all projects gonna be that complicated? Most of them are not. You may not even encounter it in your in your lifetime of the some of the changes that I'm talking about, but it's good to know and have it in your bag and understand what are the the things needed to push a project through to the other side, right? So let's talk about environmental consideration, environmental regulations such such as uh those protecting wildlife, endangered species, and historical landmarks um can impact zoning and entitlement. So, for example, I'll give you one, right? We have a community down here in South Florida, Southwest Ranches, big lots, right? There's avian species. It's it was technically kind of part of uh of the um uh Everglades, so protecting avian species, having certain type of tree species, if if there's owls and stuff like that, they don't want you to to mess with them, and then you have to have a specific plan on how to rehouse them, you know. Um, so you know, you have to understand that these things play a factor in you moving this project uh forward, right? So navigating zoning and entitlement process. So real estate developers must must navigate local zoning laws and the entitlement process to ensure that their projects are improved and and and completed. This requires careful planning and coordination with local uh officials, lawyers, planners, and other professionals. Right? So you so a friend of mine bought some parcels in Memphis, and he was like gun-ho on you know making these particular particular purchases, right? And he said to me, Sam, he's like, I want to take this one lot and I want to sliver them into eighths, into eighths, and I want to put you know a property on each, right? But then when he went to the city, they said that plan doesn't work, right? It's not they're not gonna allow you to sliver it into eighths, you know, on one and on that one particular parcel. So his his dreams and his thoughts on why he bought that property didn't exist the way that he was envisioning it, right? So these are the types of things that are very important in understanding zoning and entitlements and why they are very important, they could either freeze your project or get you in big trouble because now you have to reallocate and re-anticipate the total revenue it's gonna produce, which is gonna affect you, and if you have investor partners, it's gonna affect your investor partners as well. So without being too long-winded, that's what zoning laws is, that's what entitlements are, and that's why it's important that you need to know the game that you're in and understanding what is zoning, why is it important, and how to move your project forward. Like I said, this is Sam, also known as the Pro Design Builder. I'm the best in the business, and it's not even close. Thank you for joining me today. If you ever have any questions, feel free to reach out to me. I'm a wealth of knowledge. I want to see you win when it comes to new development. Have a good day.