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What is up, my Pro Design or My Pro Design Builder family? I'm Sam, also known as the Pro Design Builder. I haven't been here in a while, but it's it's been a good thing. I've I've had a lot going on in the background, right? So I've been able for the last year to just come on here and just kind of give you guys free game, free um just free clarity, free training on you know how to grow. How do you how do you need to be thinking about this next step in what you're looking for? And uh that's that's being being a developer and building you know uh spec homes and multifamily projects. So what is it what does it really look like to have a operating system and a thought process that resembles that? So I think I've I've done that and I've added a ton of value over the last year. Um, definitely. Uh I've enjoyed myself, but I'm definitely switching gears and working on something big that you know I could take to you know the marketplace and really help some people build visions. So uh I'm excited, I'm excited, I'm excited about that. But I'm also excited about tonight's trading, right? Which is know your numbers, right? You're no your numbers are gonna determine everything uh that happens to you in this business, right? And if you don't know your numbers, you could get yourself in a jam, or if you know your numbers, it will never be an issue on how to analyze a deal properly. So today I'm gonna be talking to you about the best six pillars of um of numbers that you need to know uh to analyze a deal properly. So if you don't know who I am, I'm Sam, also known as the Pro Design Builder. I'm the best in the business, and it's not even close. If you don't know my story, you know, I started out as a house flipper, and on my first deal, I hired a contractor, I fired a contractor, I hired a second contractor, fired a second contractor, I hired a third contractor, and on my third contractor, I realized this business has contractor problems, right? And and from there I began running my own projects. I got really good at getting in and out of projects pretty fast, whole house renovations. Uh, we could get out get in and out of projects like 45-50 days, and then you know, it it made sense for me to you know get into uh design design build later after the fact when I decided to pursue construction as uh as a as a profession. So my my experience has been the last nine years as a design build firm, right? So what what does that mean? That means when a when I first meet a client, we start out the project with simple, you know, sketches, and then from there the project grows. I get to know who they are, I get to know who their family is, I get to know why they want to live the way that they want to live, you know, what what features of a home that's important to them. I really get to cater to to the client. So I have very in-depth experience when it comes to how to take a project from concept to completion because this is all I've done for the last nine years, right? So when I'm bringing you, you know, in-depth, you know, uh knowledge about some of these things, uh I I really do feel like it adds significant value to you guys. All right, so let's get right into it. Enough of that. Enough about uh about me, all right. Know your numbers, right? And so the number one number that you need to know is your land costs, right? And the reason for that is the land, if the land doesn't work, it will give you a quick no uh go or no go zone, right? And the reality is right now most people are struggling to make the numbers work, right? And if it doesn't work with the land, it's gonna be harder to sell. So here are some of the things that you need to know and understand to get a clear idea on what the land actually costs versus the purchase price, right? So here's some of the things you gotta you gotta factor in. You factor in the purchase price, you factor in the closing costs, you factor in uh surveys, uh, you factor in environmental studies and then impact fees and uh and carrying costs, right? So here's here's one thing that you know I'm always paying attention to uh as a developer, right? I'm always paying paying attention to how is my local state um Senate and my state government operating because those are gonna affect the laws that affect me as a builder, right? And here's one that's actually currently happening right now, that we which is uh Florida property tax, right? So there's an amendment right now that's Florida for Florida property tax you know, abolishing that. And um, what what does that mean, right? So that means property taxes pay for important infrastructure like uh police, fire, schooling, uh parks, road maintenance, all of that stuff. Very important stuff, right? So I ask, yes, we have an escalating property cost, especially with insurance and stuff like that. They're trying to get a creative way to um you know to reduce those costs for Florida homeowners, so Florida homeowners stay in the state more and stuff like that. These are the types of calculations that you're paying attention to. So the now they they plan to do that, so then I I asked, where is that cost gonna come from to support these programs, right? To support the schools, to support um parks and and and get these certain things paid for. So it was several several different areas, right? One was sales tax, and then one that piqued my interest, duh, this is what I do, is impact fees, all right. So it's saying that the tax from property is gonna shift and is gonna affect impact fees. So, what is that telling me? That's telling me that it's gonna cost me more when I decide to build a new building because the impact fees are gonna increase if this law goes through, right? So that's kind of how you need to look at your state government on how they make decisions that's gonna affect you if you truly want to pursue this long term and pursue this as a business, right? So this is kind of how you look at it. So so knowing and understanding your uh your your your land clock land cost, right? So now the number number two you need to know is your construction costs, your hard costs, right? I call these costs sticks and bricks, right? So someone that's a bean counter, right? If you if you've ever uh well for for us, um having a estimator, right? What what is their job, right? Their job is to pull out the plans, right? Pull out the plans and then count every stick and every brick and understand how do I make the company profitable by by calculating for all of the cost, right? So those that's very important. That's that's what your hard costs are. So so here's some of the things that go into your hard cost that you need to need to factor, right? So your site work, uh, your foundation, your framing, your roofing, your electrical, your your HVAC, your um uh landscape, landscaping, landscape architect, uh, interior finishes, and um, so those those are your general costs that affect your hard costs, right? And then you might have additional little costs depending on if you plan for it or not. Do you want to virtually stage your property or do you want to actually stage your property? That's something that you want to know in advance and and and anticipate that cost and factor in that cost because a property that does that that is staged, sell faster. And I highly recommend from a decorative standpoint, staging your home now. Your home feels finished, right? That's just a great finishing touch. I truly feel feel strongly about, right? And then also too, heart hard costs, right? Is you hear people always talk about um what's the price per square foot? What's the price per square foot to build this? What's the what's the price per square foot to do this, right? So the one thing that I'm gonna say is price per square foot is definitely a regional thing, right? And your price per square foot is gonna change depending on the construction type, right? So for us, we we use CBS block construction in South Florida, right? So it's some of the most expensive concrete rebar way to build a structure, right? Whereas if it's the northeast or it's in Georgia or it's up north, it's out west, you know, and you're you're literally dealing with wood structures, it's it's a lot cheaper, it's a lot easier to get the get the building off the ground. I'm expecting the cost per square foot to be a lot lower. Whereas here we're dealing with um intercoastals, we're dealing with uh near the beaches and and and erosion and uh FEMA, um uh flood flood zones and stuff like that. So it requires some additional support underneath the structure to make sure that you know um it meets flood requirements, it's ahead of schedule and stuff like that. So that's why knowing and understanding your uh hard costs is important, and it's also to getting that under control early on helps you be more profitable, right? That's just the reality. If you know it and understand the the sticks and bricks of your business and sticks and bricks of how to put a home together, it allows you to be way more profitable, right? So, number number three, let's talk about soft costs. These costs are typically not really factored in, but it will make or break your deal, right? So, some of the things that goes into your soft cost is gonna be your your architectural plans, engineering, uh, permitting, uh, legal insurance surveys, you know, uh project management. That those those costs are significant. It's typically ranges around 10 to you know 20% of your cost, and you have to make sure that you have that in there so you can execute on the project correctly, right? And it also too, it has to math, right? So that's one of the big things uh we are often you know worried about is does this project math, right? And then you have to have the math right for any project to be a green light. So that's what that that looks like. All right. So now let's talk about financing costs. And I have a very interesting story uh attached, you know, attached to this, right? So I I took this took this class, and the class was by this P PhD. He did it on estimating direct and indirect costs and construction, and pretty much by the time he was done explaining the costs of in uh direct and indirect uh cost in construction, he pretty much painted a picture like every day that your project goes over schedule, what it cost you every day leading, you know, past that that date that you set to have the construction done. It was significant. It was eye-opening to know that it costs you X every time this project runs over, right? So being a stickler about getting the project done in a neat, orderly fashion, on time, on schedule, on budget, ready to hit the marketplace, I can't tell you how important that is, right? It's very, very important in the life cycle of your project, right? So here's some of the things that you're factoring into that often increases your cost is you know your loan interest, your um the points, you know, the construction draws, the loan origination uh fees, all these things in the financing uh really affects you know the cost if the timeline increases, right? So then the the fifth number that's that's very important for you to know is the ARV, right? Understanding the exit, understanding how to look for the exit. So right now people are saying, hey, listen, hey, the where we're at right now, we're in war, da da da is very uncertain. But hey, listen, I'm not looking right now. I'm looking two years into the future. I'm looking three years into the future on what the landscape is gonna be to make my decision on if this is a great deal or not a great deal, right? So, and I'm looking at multiple exit strategies to make sure that I can exit out of the deal the way that I need to, right? So it's important for you to know that you're looking out into the future and you're also looking at making sure that the comparables make sense, and if this area is a desirable area, or are are people or are people retreating and moving out, right? So Florida typically gets a net migration, but it it it's changed the last few years depending on the cost uh to live here. It's it's expensive with insurance and and and the cost of living, etc. So determining the ARV, looking at the the comparables, making sure that it's a similar homes, you know, you don't want to be the biggest home in in that area, but you if you're transitioning in in in area, you could kind of set your own comp. That's the great thing. Uh if you if you ever have that strategy. So similar size, neighborhood, uh, and and finishes always finish. Uh it's it's almost like I think I'm talking to my kids, right? Finish strong, right? And I remember when I got into this business, uh his his name was Craig, and he said, he here he's like, here's what will determine if you're successful in this business or not. Right? He said, never take your eye off the ball, right? Never take your eye off the ball, right? So mean meaning finishing strong is very important, right? So you know, knowing and understanding how you're gonna finish your project and deliver that is gonna be very important and making sure that you have a long-lasting career, right? And and the sixth and final um number that you need to know is developers' profit margin, right? So what are we looking for? Honestly, I'm looking for 25% or plus that I can make on a transaction that tells me that I'm in great uh position. And what does that hedge me, hedge me from, right? So there's certain things that it hedges you from, which is you know, market shifts, right? Market shifts, construction delays. There's ways to uh prepare and minimize the the the risk to construction delays, which I'm big on that, and then uh unexpected costs, which is unexpected price increases on products, which I kind of nipped that in the bud in the way that I uh plan for a project. You need to know your numbers and know that profit margin is there to to to protect and leverage from those positions, right? So the only the place that you would get in the most trouble is the the deal didn't pencil, you did all of this work, and then now you're you're uh your your profit mark you can't even really sell to to get out from underneath the deal, and then now you're you're you're bleeding out. That's the worst place to be, right? So knowing your avatar, know your market, know you know what's selling, what's not selling, build it for that person, right? So they come in and they easily see themselves in the project, and then you deliver the project, right? So there's a there's a very simple formula for knowing if your project is going to math, right? Here's the formula it's profit equals sales price minus project cost, right? So I'm gonna repeat that. It's profit equals sales price minus total project cost, right? And then that's the formula that's gonna determine if your project uh if you know your numbers and your project works, and you if you don't know your your numbers and your project doesn't work. Outside of that, hopefully you guys have gotten some significant value from this particular uh training. If you ever consider or want to work with us, uh feel free to uh message me in any time and I'll reach out to you and and we'll see how we could help you get your building off the off the ground. Outside of that, let's build. Have a great day.