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What is up? Real estate development family. It's Sam bring you another Action Pack live stream where I, you know, drop nuggets on you guys that I've been thinking about and that will add that will add value. So, you know, welcome to the real estate developer group. This group is specifically for real estate investors who are struggling with knowledge and experience to become real estate uh developers. Uh I'm Sam, also known as the Pro Design Builder. Uh I'm I'm I'm your host, but I also went through this exact experience uh in trying to grow my knowledge base. Uh if you don't know my story, I make sure that I always tell my story. But um I was a house flipper for for five years, and I learned a lot during my experience as a house flipper, and I hired contractors or fired contractors, and that's kind of how I got into construction. But I got into construction specifically uh to learn new development. So the last eight years I've spent all of my time um as a design build general contractor. If you don't know what that is, design build general contractors handles every aspect of the project down to the architect, to the designer, to the permit process, to the actual construction. So I make it very easy for my clients on the single point of contact when you uh want to get a project off the ground. So from concept to completion, I I am your man, right? So it took me a long time to kind of uh learn and get to this place because I didn't enter the business through construction, all right. I entered it through investing and in solving a problem, um, which is my contractor problem. I ended up becoming a contractor to kind of solve those issues. But it has taught me so much about uh this business, this industry, and you know, now I am using all of this knowledge that I've gained through time to kind of help you guys uh grow to you know to achieve your goals, right? And why why would I do that? Uh, there's several reasons why I want to do that. Uh, one, I wish someone helped me, right? So I'll tell you, I was flipping a house, right? And what happened was uh this this particular house needed an engineering letter for uh apparently before I bought the house, uh a car had run into the side of the home, and this this particular structure is blocked, so there was a structural integrity issue and it had to be rebuilt. But uh I remember reaching back out to the um building uh the it was an engineer that built properties, but anyways, I needed a letter from him, and then I remembered them, and when I started to branch out into uh new development, I go, let me reach out to this guy and just see what he's about, right? And then you hear these different uh books or stories and say, you know, offer to work for him for free, right? So that's what I did. Uh I went to his office and I said, Hey, listen, uh, I want to learn to, you know, to to build houses, yeah, because I wanted to, this is before I started my construction company. And I want to learn to build houses, and and I'm willing to work for you for free. You know, you just tell me what I need to do and and and I'll get it done for you. And the guy was a real jerk. And the guy said to me, uh, how about you pay me $30,000? I'll show you everything you need, you need to know, right? And I was like, huh. It was that was like eye-opening to me. And then he goes, uh, as a matter of fact, make that $40,000. I I promise to you, I'll teach you everything you need to know, right? And then I remember how of a like a dirty feeling it left in my mouth after speaking to that guy. And he he was a jerk, he was not personable, uh, he wasn't somebody that I really truly wanted to learn and grow from. So that was that my first experience there, right? And then uh uh I reached out to a friend um of mine that I went to high school with, and he was a developer, right? And at this time, he's a developer in Manhattan, major developer. Um, high-rises, uh, 40-story buildings, uh, major, major, major development. So I went to go see him in Manhattan. And uh at the time he had about $600 million in in development projects going. He had up a couple hundred more, um, a couple hundred million more in um in planning, and I really wanted to sit down and pick his brain and really figure out uh everything that I needed to do to kind of get to his level, right? Um, and you know, I remember walking out of that particular meeting, and all I could say to myself was, well, actually, I said it to I said it to him in this meeting. I was like, I gotta learn development through construction. That was gonna be my route, right? Because it's gonna give me the full base that I needed to know and understand about all aspects uh of it. All right, I already had the uh investment background, I don't I didn't have that at the time of the raising capital, using institutional capital and all of that, um construction loans and all of that stuff, right? I didn't have that experience, so I had to gain that. So um that was kind of my route into uh new development and construction, and it's been a one heck of a ride, right? So now I'm doing the same thing that I wish someone had for me that could bend my knowledge curve and bend the amount of time I had to spend to get to where I'm going, right? And that's the purpose of this group, and I impart my knowledge um on this group as much as I can to kind of help you you guys uh uh along the way. So uh I felt like someone needed to hear this, so uh, I just wanted to share this with you, especially with how crazy times are uh right now. All right. So I got Philippians 4, 6, and 7. Do not be anxious about anything, but in every situation, uh by prayer and petition with Thanksgiving, present your request to God. Right. This is a I felt like someone needed to hear that today, especially with all of the craziness going on around us, right? It it sometimes put things into perspective of not letting this anxiety, you know, get to us and bring that petition to you know to God. This is me, this is who I am. I I I don't turn it off, I don't wear it and then take it off. This is who I am, this is what I'm about, and you know, I I love it. All right, I wanted to share one more with you. All right, this is gonna be Isaiah 41.10. Uh, do not fear, for I am with you, do not be dismayed, for I am your God. I will strengthen you and I will uphold you with my righteous hand, right? It's another one about fear and not allowing that to put you in a place where you can't move, right? And that's what happens typically with with people that are branching out into new areas, right? So for me, you know, coaching and consulting is new for me. Um, but one thing I do know is to take one step in front of the other every single time, and with that, you will achieve your goal, your vision, right? But it starts with laying down your plan and laying down your vision. So today, you know, we're gonna be discussing how to identify prop profitable uh development sites. I think that that could this is a training that you'll get tremendous value from, and I wanted to dive into this to um make sure that you guys are educated in this process, right? So if you ever have any questions, make sure you drop it in the chat. I want to engage with you guys more. There is gonna be more and more people coming into the group. I want to make sure while the group is still small, I am able to give you guys attention and give you guys a level of service that I may not a little bit later. So I just want to just take advantage of that, right? So if you have questions, drop it in the chat, you know, uh reach out to me. What are you struggling with so I could produce more videos that will help you kind of get some clarity and get some understanding, right? So we're gonna be diving into how to identify profitable uh development sites, right? So the first step is it starts with uh researching the demand in your market, right? I highly, highly, highly recommend uh you identify growth areas with uh population growth, right? Um I'm big on um big cities. Cities are important because there's a lot of job creation, there's a lot of uh variables that that really affect the way that you sell a property, if it makes it more desirable or less. Uh if there's infrastructure development that's happening uh around the area, is a city growing? Uh is there jobs relocating? Is there different industries sprouting up? You know, you gotta really think from a higher level, right? Um, someone's gonna always need a property uh to sleep in, right? So a rule of thumb is five million and above, right? That's a uh they want that house, right? They don't have to have that house. Anything five million and below, someone needs to stay there, needs to live there because they need a roof over their head, right? So that's kind of like the rule of thumb that I use. So if you're below that particular threshold and I expect everybody to be in this particular group, then you have the clarity and understanding that people need to have a roof over their head, right? I have written down right here, we're currently 4.1 million units short uh of housing in this in this country. That issue is a mathematical equation that is not solving itself anytime soon, right? If you have that understanding, you can think clearly about what you need to do to set yourself up from a business perspective in new development, right? This issue is not solving itself easily, right? 4.1 million homes, right? That's probably 15-20 years of building that needs to happen for us to catch up with the amount of units we actually need to house everybody in this country, right? So if you understand that math, you can understand why there's a big need for new developers to to sprout up. All right, so look at areas of housing shortages, if there is any commercial uh demands that that attach to that, if there's industries that are coming in, though those are things that are gonna be really important. Uh, also you want to you want to study uh comps in in your area. That's gonna be very important. Study comps, study rental rates. Uh all of those are gonna be important because you're gonna need to have uh multiple exit strategies when you're when you're doing a new development project, right? So we're I teach you how to get your first one to four units uh off the ground. Uh reason for that is that is a residential um loan. Anything five units and above is commercial, and we want to just get the first one out of the way. So we focus is we focus on the first one to four units. So let's analyze the zoning and land use regulation, right? So review zoning codes to determine uh the allowable use and density, right? So you're checking things like uh zoning variances, right? Uh up zoning opportunities. Can we upgrade this particular parcel? All right, has there been a parcel in the area that has um had a zoning change? All right. Um this is gonna be very important when there is uh or or you would need a land use attorney, right? You submit a application to to the city or you or the municipality, it goes under review, and then they will go to that and do the research uh attached to getting this zoning change, right? And when the zoning change happens, that's when you create value, right? It increases the highest and best use, and that's what real estate development is is increasing the highest and best use of that particular parcel, right? So you did the work, you did the application, you you got the the variance and the zoning change, and then now we can build a upgraded um property or sell it to another developer that will spend the time to to develop it and you increase the value, right? So that's kind of how that works. So uh review the setbacks, height restrictions, and parking requirements. Uh all of these are gonna be important, right? So, based on the square footage of the home, are you gonna need two spots of parking or are you gonna need three? All right, what is the city going to uh allow, right? The setbacks, if you don't know what setbacks are, it's the boundaries of the property, right? So typically what happens is on the sides is gonna be shorter, on the front, there's a setback, it could be 25 feet or so in the back, it might be 20 feet, you know, or something like that, right? These are general um setbacks in my particular area of South Florida, and then that's where the building can start. So uh it's important to know because the city needs access to whether it's underground plumbing or uh underground electrical or access to power a power pole or and stuff like that, and it needs to be to have a right-of-way to access these um these uh these these things, right? So that's what's what the setbacks are important for. Um evaluate land cost versus potential revenue. All right, so I'm gonna tell you, I'm gonna share a simple formula uh for you guys to help you guys calculate um your profit and then also the max uh land um purchase price. All right, so here's the here's the uh here's the formula, right? So you take the projected sales price uh minus the development cost minus the profit will equal the maximum land purchase, right? But when you get that maximum land purchase, you're not just done there, right? So now you have to also pull the comparables of the land just to make sure that your math is not off, right? Or you could get even more of a reduction in um in price. So you're gonna pull the comparables to similar deals uh to ensure that you're buying it right. So that's kind of how you evaluate a piece of parcel to make sure that you're not paying too much for the land, right? So I'm gonna give it to you again. The projected sales price minus the development cost minus the profit gives you the maximum you could pay for the land. All right, so whatever that is. So when you're looking at um a particular house or a parcel, that's how you calculate it, right? So easy, easy math equation for making um quick decisions, right? So uh you have to assess the the infrastructure and and and the site condition, check check, check the utilities. Also, too, what what's important for me is I like underground conduit, I like underground electrical. Um, I don't like areas where there's power poles and and stuff like that. Um, you have to talk to the city, figure out uh if they are going to upgrade that or change that. These are the types of questions that you need to know and understand, kind of walking in. Uh evaluate road access and traffic flows. These are going to be important, right? So sometimes uh never happened to us, um, but you catch these stories on the news. There is a piece of parcel, someone bought this piece of land, but then there is an access road, but they didn't know that that particular road is a private road, and then that owner of that private road won't allow you to access that piece of parcel um through that street. So then now you're landlocked, right? These are the types of things that you need to know, right, and to know to also uh avoid. So um evaluate the road access and traffic flows. This one is very important, especially for us in South Florida that have tropical weather conditions, right? So you're looking for environmental uh risk, right? Like flood zones, right, which is big down here in South Florida. Uh, every time there is a new hurricane, it makes you even more aware of what's going on in the area when it comes to flood levels, right? So there's FEMA requirements, these are the types of questions that you want to ask, right? Not everywhere will experience what I'm describing, but these are the types of questions, right? Is there contaminants in that particular um piece of piece of land or dirt that needs to be remedied? All right, is there is there clay that needs to be demucked, or is there piles that need to go in to get to bedrock to make sure that the structure is gonna be sound, right? So these are the types of things that you're gonna need to learn and be comfortable with. Is it is it a wetland, right? What's gonna need to be done there? What type of drainage is gonna be needed to make sure that the soil is kept um kept firm, right? So these are the types of things that you need to be aware of when you're assessing site conditions, right? So uh identify off-market deals and distressed properties, network with brokers, city planners, and local developers, and uh search for distressed properties, tax liens, and um motivated sellers, right? So if there's a particular area that is either transitioning popular, is there an opportunity zone that there's going to be a level of transition happening in that area? You want to know. You don't want you want to so the luxury that we have as developers is we could kind of create our own market, right? But you don't want to be dumb, and you want to make sure that this is strategic. The city planner is forecasting uh a big change in the city. You could kind of get in front of the vision of the city planner, and then you could pick a neighborhood and pick that site and say, hey, I'm gonna be here for the next 15 to 20 years, and I'm going to develop a lot of these homes in this particular area. And that's the smart way that developers that are doing one to four units are doing it, right? Um, and and that's how I would recommend it too, because now you're not spread between different cities, going between different sites, you know, you know the area, you get to know the city commission, right? You gotta understand there is a lot of politics involved, right? And the the more that you know and understand and make relationships with city officials, they know you, they know your brand, they know what you're what you're trying to accomplish. Guess what? They're gonna help you, right? And that's something that you need to understand uh up front and in advance, that you need to make these relationships with the city commission. You need to sit in on these meetings and kind of get some understanding and show your face and and really be a community builder is what's gonna make um your vision truly come true. Alright, so um use creative finance strategies like subject to or seller finance to reduce the acquisitions costs on the front side, right? If someone has a piece of parcel and they don't want to get taxed on it right away, maybe they might uh do a seller finance deal and allow you to transfer it and then take a little uh take a little ride with you in the in the profit department when you get the building up, right? That could help you out a lot. That could be, you know, as much as a half a million dollars that you didn't have to come out of the pocket. Where you needed to put 10% down on the land instead. Right? Strategies like that could significantly help you get off the ground. And these are the types of things that you need to be thinking about moving, you know, moving forward. So check check for different tax incentives, right? And tax benefits. Opportunity zones are definitely one of them that provides that for a lot of people. There's a lot of tax credits that have tax breaks for upgrading these particular areas. And you want to know that in advance. Look for public and private partnerships or city incentives or specific types of developments. I got that question pretty much today from somebody in the group that they want to focus on affordable, afford building affordable housing. And that is a big opportunity that you can get some sort of subsidy from the city or the municipality for taking on that kind of project. And then also to performing that feasibility study, getting more comfortable with understanding all the numbers, all the variables that are going to be needed to execute this project and get it off the ground. So these are exactly the steps that you need to take when you are launching a new project and how to identify profitable development sites. So hopefully with this training, you guys got some nuggets from that. Hopefully, if you have any questions whatsoever, feel free to reach out to me and feel free to continue to connect. Feel free to continue to dream and grow in this particular area. So I'll be coming back to you every week and dropping off as many nuggets as possible. Outside of that, have a great day.