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What is up, my Pro Design Builders? Uh, how you doing today? I'm Sam, also known as the Pro Design Builder, and I'm excited today. You know, I'm always bringing you the best nuggets that uh I could find when it comes to new development, construction, and how to make this transition from real estate investor to developer. Uh, I really consider myself the best in the business, and it's not even close. If you have been watching my trainings, you know that I really don't pull any stops. I kind of give you the raw uh and real deal as much as I can. And and actually, somebody was telling me the other day, he's like, he's like, This brother is giving out the game for free. Yeah, and I am, and imagine what the game is like when you pay for it, right? So I always like to bring tremendous value to the table, and that's why I do these live streams, and that's why I do these trainings that allow you to get educated to a point where it gives you confidence to press the button on your on your vision and go to making a leap into something new, right? So, uh, unlike real estate investing, developing is very different, there is a big knowledge gap, and part of me dropping some of these videos is to kind of close that gap and to make you feel more comfortable into understanding what are the things that are going to be needed to execute on this vision and to get to the next level, right? So there's so many changes in the atmosphere, whether it is economic, whether it's tariffs, whether it's just life is just getting more expensive. And the reality is if you're not doing something different, you're getting left behind, right? AI is is equipping companies to eliminate jobs, right? So you better be doing something else to make sure that you could set your family up and set yourself up for the next uh the next level. So uh I'm excited to jump into this training today. We're gonna be talking about how to sell or lease your new development project for maximum profit. My apology, I'm a little under the weather, but let me give you the best I got. So, a little bit about me. Uh, like I said, I'm Sam, also known as a pro design builder. Uh, I started my journey first off as a real estate wholesaler, and that started out when my wife wrote me a letter saying that she didn't want to go to med school, right? So we had this big vision, I had this big power couple type of vision. Uh at the time I was I owned a body shop in a car dealership, and I was going to be investing in her future to get to med school, you know, to kind of you know help the family, right? And right before she was supposed to go, she says, Sam, I don't want to go. Right. So she hands me a book, which is Rich That Poor Dad. Uh, I read it, it really resonated to me right away. And then we went to a conference together. That really kind of fed me, and then I went to a second conference, and then we we pressed go on it. I was really green as a real estate investor, I didn't know what I was doing. Uh, but I had a friend at a title company that I would call up and I would say, Hey Sam, I mean um Mike, what do I do here? What is the escrow? What do I put on this line? Do I initiate every um every contract uh page or what what do I do here? I really had didn't have the guidance, but I had the will for for something different. And guess what happened? I took messy action and things start to fall in place for me. I got my first deal under contract, I got my second deal under contract, I got my I got a deal closed that helped me pay for my wedding. I got you know, over and over and over. But then what happened was when I started to become a house flipper on my first deal, uh I hired a contractor and then I fired a contractor. I hired a second contractor, I fired a second contractor, I hired a third contractor, and after that third contractor, uh I realized that this business has contractor problems, and I was never gonna be okay with the level of execution and preparedness that I saw from the contractor. So then that's when I got into contracting, and then after two years of being in the business, I realized that this business has a lot of problems, right? And I sat down and I met with somebody that uh a friend of ours that was doing design build, and I was just kind of like, Hey, listen, here's what's going on. I need to make this transition into design build, and they were telling me about how they did their operation, it just made sense. So, what is design build? Design build is a system that takes clients from concept to completion, right? So, whether it's it's sketching out the concept on a paper, then getting it to an architect and really bringing it to life, and then getting the designer involved and selecting all the materials and and doing all of the steps. So I became a one-stop shop for all things construction, design, build. Now, what that equipped me with is the skills when it comes to construction to really be able to guide any and everybody through the process on what it takes to go from concept to completion. That's what the Pro Design Builder is truly all about. And I was able to really grow my business in a way that I was able to build homes and do additions, do high-end renovations. I've really done every aspect of the project, so I know what I like to tell what I used to tell clients is I know where the bodies are buried, I know where the booby traps are in this process. So I packaged up a system and I call it the Pro Design Builder Method, and that's kind of why I am bringing these type of videos to you today because I want to impart my knowledge, I want to help more people, right? It's it's not enough to help myself or my investor partners in launching a new project. I want to be able to have a larger reach and when it comes to people and build a community that allows people to grow together. So that's what the Pro Design Builder is truly all about. But today's training is about how to sell or lease your development for maximum profit. So this one's gonna be very in-depth, and I want you to make sure that you really pay attention to some of the details attached, sorry, attached to uh what we're gonna be talking about today, so because selling is very different than leasing or renting, right? So, all right, so for first things first, right? You want to make sure that you're positioning your property properly, and then how do you do that, right? So the first thing that you do, you you need to identify your ideal buyer, all right, or or they talk about avatars, right? So one of the things I like to like to use or or tenant profile is who, what, how, all right, and then this is how this breaks down: who are they, what do they like, and how do they like to live, right? So if you can answer these questions on who you're preparing this specific project for that's going to live in this dwelling, right? Whether it's a single family home, whether it's a duplex, fourplex, they're gonna be living inside of this home. You're designing it in a way to understand who they are, how do they want to live, and and what do they like, right? And then now this is gonna help you get maximum profit because you truly understood who your buyer is or who your your tenant or lease leasee is. So um position uh pricing position strategies, right? So there's several things that fall into pricing position strategies. It's uh market comps, it's uh cost plus and value-based pricing. The great thing about uh new construction is you can value the construction higher than the existing conditions or the existing homes in that then in that area, right? Several reasons why the property is coming with 2025 code, right? Also, people love new, right? They'll pay more for new, so have that understanding, all right. And then also to equip yourself with and highlighting a wow factor, so you're positioning yourself with a wow factor. Some of the things that we like to use in in this specific in industry is something called value engineering, right? So there's several ways to look at value engineering. Value engineering could be cheap or strategic finishes in a way that allows you to execute on a look, right, of the home or of the uh development, but not pay extreme amounts for it, right? So you not pay custom home type prices, you know, for this particular development, right? It's gonna be important for you to know and understand that value engineering is gonna be the way that you position your property to sell for maximum profit. So sorry, one of the things we're gonna be diving into is rent versus sale calculator, right? So I'm gonna break down if you are intending to rent versus sell and what that looks like for each, right? So I'm gonna break those those down, right? So for selling, this is kind of how it breaks down, right? You're gonna use the market sales price, right? Selling cost, right, which is agent fees, closing costs, etc. Minus the remaining mortgage, taxes on the profit, which is capital gains and depreciation, equals net proceeds. And so here's what the math looks like, right? The math is sales price minus costs minus liabilities minus taxes equals net proceeds, right? So why would you sell for net proceeds versus lease and have a long-term option, right? It really depends on your strategy and what you're looking to do. If you have a predestined, you know, uh project or um opportunity you want to take advantage of, then you want to sell. You want to sell, you want to exit, you want to get into another project, you want to get into another two projects. That would be the strategy there, right? Obviously, there is some disadvantages where you don't get the tax benefits and depreciation, you don't get the uh you get hit with uh capital gains. Those things are gonna be important for you to understand why you would do one over the other. And so now let's break down what uh for rent looks like in a new development project, right? So you're looking at monthly rent income, all right. Also, you want to add in vacancy rate, uh, monthly expenses, which is property management, maintenance, insurance, taxes, mortgage payment, because you're carrying that particular overhead. Most of these projects are gonna have some sort of mortgage on it, unless you just have the cash on hand, right? Net monthly income uh cash flow, which is rent minus expenses minus mortgage, right? Which is gonna give you your net monthly cash flow, right? And then uh your annual cash flow, which is your net monthly cash flow times 12 months, right? Which is simple, simple math to understand that the advantage in renting is you get the appreciation, the tax benefits of depreciation and interest deduction, right? Sorry, I'm gonna use real life examples of a project that kind of gives you what the two would look like at the same price point, right? So the sales, the property value price point is a million, right? So I'm of the mindset if you're gonna go through all of the hurdles, all of the challenges, all of the red tape, all of the planning, all of the architecture, all of the just all of the steps that's that are needed to take a project off the ground and takes a year and a half or so, it better be worth it for you, right? So um the price point is going to be important, and uh understanding I like high higher end projects because the net back is going to be worth the trouble and uh compared to smaller, smaller projects. So we're using the property value of a million dollars, right? So here's how it breaks down versus sell versus rent, right? So here's here's the real real life numbers, right? So if we are uh if the property value is a million dollars, this here's how it breaks down, right? You should factor in a selling cost of about seven percent, right? So some of that is realtor commission, some of that is closing fees, title, you know, it etc. The length that you're holding it with taxes, right? And then there is a payoff amount, right? So if let's say you bought the lot for 200,000, right, and you spent $400,000 to build this this specific home, right? You still have a payoff, the total payoff is about six hundred thousand dollars, and then now after the the value is at a million, you do have to pay capital gains. If you sold that property in that year, you have to pay capital gains. So we have to deduct the capital gains from that, which is about fifty thousand dollars, which would leave you with a net one-time payment on that transaction of about two hundred and eighty thousand dollars, right? Which is a big nice payday for a transaction that takes twelve to eighteen months. I would say bank on it for 18 months or so, depending on your building department. I coach it up different in a in a strategy that allows you to move that timeline forward, but so that'd be your net proceeds, $280,000, right? So now let's break down the rental on something like that, right? So let's say that the value is $1 million, right? So here's how it breaks down the payoff of that particular property is still gonna be that $600,000, but your expenses are gonna look differently, and your deductions are gonna be very different. So here's how it breaks down. So let's say it it's a million-dollar property, the monthly rent that it brings in is about seven thousand dollars, right? So here's how how it breaks down. If you have a five percent vacancy rate, so factor in uh two hundred and eight dollars monthly expenses of fourteen hundred bucks, uh mortgage payment is about thirty six hundred. So your your net monthly cash flow is about seventeen ninety-two, right? And your annual cash flow is about twenty one five, right? So your your your annual cash flow on that particular project is about twenty one five. So annually, you you should expect based on the real estate market, depending on if it's decreasing or increasing, you should still expect it to increase and appreciate about three percent. So if that's the case, your property would appreciate about thirty thousand dollars in that particular year, and then also you get the advantage of depreciation, right? Which is twenty-seven and a half years of depreciation that you're allowed to deduct from that particular property, which is the tax advantage, that's what makes uh real estate a great vehicle, which is about sixteen thousand dollars. So your total annual ROI is about sixty seven five, right? So for for for the year, right? So now this continues year after year, right? You're taking advantage of the depreciation, you're taking advantage of the appreciation, right? You're taking advantage of the net uh cash flow and the monthly cash flow and the annual cash flow, right? Until the property is completely depreciated, and then now you have a property that's free and clear, and then now you could extract those funds for it for other use, right? So it really depends on what is your strategy, right? Do you have a long-term strategy or do you have a short-term strategy when it comes to new development projects? So I wanted to make sure that I broke that down so you could have a clear understanding on what it's like to sell versus rent or lease, right? So now let's continue on. So we're preparing the property for the market, right? Uh, what what do you need to know? All right, so the differences between preparing for sale and preparing for rent are different, they're just two different, two different bases. So uh it's important for professional photography and virtual tour, virtual tourists, right? So I remember when I was a flipper, right? And I would be looking on MLS, and I would see a property. You you just you just know when you see like an unprofessional realtor, they might take a picture, the picture's cock-eyed, you might see somebody they literally. I saw a guy sitting on a bed, you know, in the picture, the picture's dark, not well lit. Not I'm like, well, this is a great opportunity because people are not gonna go want to see this house. It's gonna be a house that I want to see, I want to take advantage of, and this is the difference between great marketing and positioning your property versus not, right? So when you don't have somebody that's professional with professional photos and virtual tours and stuff like that, people are willing to pull the trigger when they could see the whole picture, right? So your baseline needs to be professional photography and virtual tours, right? So positioning it in a way that allows you to get that increase, spin a little bit on that photography, spend a little bit on that virtual tour to get the prices that you're looking for uh in the end. I I I just feel truly, I truly feel strongly about that notion. So, all right, so let's talk about curb appeal and staging, right? So, obviously, in a rental, you're not looking to stage the property uh in a rental, but if you're looking to get maximum dollars in a sale, you're going to want to stage it, or at least virtual stage it. Don't bank on buyers being creative or have the ability to envision things, right? Paint the picture for them, right? Paint the exterior for them, have that curb appeal. As soon as they pull up to the house, they're kind of like, ooh, now they're envisioning themselves living in the home, they're envisioning their kids running around in the yard, they're envisioning all of these things that you just need to paint that picture for them, right? And you're the artist as a developer, right? And don't get that um don't get that, don't get that twisted for one second, right? So you're always painting a picture for that potential buyer, and then now, like I said, you know that who that buyer is from that avatar, you know what they like, you know what they expect, you you know how they want to live. So you want to paint that picture for them and have that stage of. Right as well. So make sure you got things in check like your CEOs, your warranties, and stuff. And also if it's a rental, your leases. Get those things squared away, you know, uh right off the bat. So that's not something that you could take to market and uh go from there. So some some of the questions that you may want to uh ask and have those addressed, right, when you're uh evaluating, is uh how long uh will you hold the rental to match the uh proceeds of the sale, right? So this is gonna tell you if this is a sell or if this is a rental. You should always have multiple exit strategies when it comes to this this philosophy, right? Do you want to lump some or do you prefer uh ongoing income, right? There's different reasons for for that. Can you leverage the cash flow to fund future developments, or uh are you preparing for tenant management? Are you hiring a management company to come in and handle that aspect of it? So then you can kind of just live off the monthly cash flow. So it all depends on uh your lifestyle, what you're looking to achieve, and how you're looking to uh achieve it. So let's talk about uh marketing like like a pro, right? So uh I I already mentioned making sure that you have the right pictures, uh uh copy and layout. So also too, that the marketing it like a pro is making sure that the house is done well, right? Making sure the finishes are representing your brand, representing the the type of home that you want to live in, and and and a certain setting of certain standard. There's a saying how you do anything is how you do everything, right? And I feel very strongly about that. For for me myself, uh, I'm not a perfectionist, but I'm not gonna settle for nonsense, right? So I'm not gonna settle for a contractor just handing me any type of house, right? I have certain type of quality control measures that I want to see, that I want done. If I could see it with my eyes, it needs to be taken care of. That's just the reality, right? That's just that's the standard that I hold myself to, right? Which comes from my relationship with the creator, my relationship with God, and then it goes out to other people, right? So I hold myself accountable there, and I and there's no problem with holding myself accountable to other other people, right? So um holding myself to that higher standard, right? So using the right channels to get the right ROI, right? Which is MLS, Zillow, Redfin, getting the most exposure for the home. Also using your social media, right? Social media is everything. This is how people connect, this is how people research you, this is how people find out more about who you are, what you are, what are you doing, etc. Right? So your social media needs to be a calling card for you on what you're doing and documenting your journey, right? So, from step one, hey, listen, I just got the plans, I'm excited about getting this project off the ground. Hey, I'm meeting with architects. Here's here's the piece of property. Building that process up is gonna be very important for you because the reality is you may have friends, you may have families that could be additional investors, even if they're not, they might know somebody that wants to live in the neighborhood, and now you don't have to worry about two sides of the commission, and then now you kind of create a buzz around your journey and a buzz around the activity that you're you're doing for this particular property. So sorry, as time goes on, email marketing and retargeting is gonna be very important, right? So things like creating a specific page just for your flip, right? Just for your new development project, and then throwing a couple dollars behind it and marketing it, and then whoever you know engages with that particular content or that particular uh uh project, then you could kind of retarget them and say, Hey, listen, I have something else coming up in X amount of time. Like I said, people love new, people fall in love with new, so they might be more engaged or inclined to be like, hey, listen, they they they do good great work, and I've been watching this guy, and I want to buy one of their homes, right? So there's a lot of times that I've gotten that that they want a custom home from from Sam. So, you know, don't uh underestimate that ability, right? So, you also too, um using offline marketing like signage and stuff like that. I like to do open houses, I like to do neighbor meet and greets, right? The neighbors sometimes this is a catch 22, they're very nosy, sometimes they're very picky, sometimes they make noise, but then when the house is done, they understand that this elevates the value of the other properties in the neighborhood, right? So we're commanding a higher price point for the home, so this increases the value of them. So having a neighbor meet and greet where they may know somebody that wants to move into the neighborhood is an absolute very positive thing, and it gives you the ability to start to create community in a particular area, right? So, one of the things that I am high and strong on is creating community in a single area instead of multiple different areas, right? So pick a area now you set the comp in that area, now you dominate that particular area. That's so the great thing about real estate development is you create your own opportunity, right? And it's all math, right? So if it's an area that's regentrifying, then you're one of the first or second ones in there, you're creating that value, right? And then now you set the comp, and then now your next comp can feed off of your first comp, right? Or increase a little bit higher, right? You determine what that the change is in that particular community in that particular neighborhood, which is very important to support your long-term vision, right? So it's not just about the first one, it's about creating that community and that network to be able to establish that, right? So now selling or leasing with confidence. So there's several different aspects attached to that. So creating a sales or a lease funnel, right? So you could funnel people from the internet right to the doorsteps of your home. Now, if you have great pictures, great video, and now they are on a virtual tour and they're seeing and visiting your home, you know, hold host things like parade of homes, right? Which is something that we do as builders, and once you complete a project, you you get with others, and then you do a parade of homes where they visit a whole bunch of different properties and they tour it, and then now this kind of creates uh a buzz around your particular project, right? Don't be afraid to get involved in stuff like that, right? So top three understanding the top three objections to um to handle, right? Having those objections already prepared in advance when someone says, Oh, I think the price is too high, you know, and then now you have the the perfect rejection, uh not a rejection, rebuttal to that objection, right? And then also be open to feedback, be open to feedback from rotors on pricing, be open to feedback on finishes, be open to all of this feedback because what that's gonna do is do not accept it as an attack on you. There's always an opportunity to grow, and there's always an opportunity to get better, right? So I'm glad that I am been able to kind of bring this training to you on how do you sell or lease for maximum profit. Hopefully, you guys got some significant nuggets from this particular training. Sorry about my cough, but outside of that, catch me next week for another training. Can't wait to bring it to you. Have a great day.