Transcription
We have 100% occupancy. We never have a vacancy. So, every day from the minute that house is ready, we are occupied and we never have a day when we're not. Imagine that, because what I heard from a lot of the speakers today was retention was an issue. We don't have that issue. Permitting was an issue. We don't have that issue. Code compliance was an issue. We don't have that issue.
>> Rahima is a community builder, speaker, and entrepreneur focused on mindset transformation and impact-driven living. Known for her grounded presence and ability to connect deeply with audiences, Rahima plays a key role in shaping conversations around mindset, community living, and the future of housing, helping bring transformational housing concepts into real-world execution. Take a look at the screen.
>> [music] [music] [music]
>> Co-living is not just a roof over your head. Co-living means you're part of a family, you're part of a community. You're getting a chance to rebuild your lives with a safe and stable housing position. Housing shouldn't be for the privileged few. Housing is something that everybody needs. It's not a privilege, it's a right. And what we're building goes beyond business, because what we're building is a mission and we invite you to [music] join this mission with us.
>> Rahima! [applause]
>> [cheering] [applause]
>> Thank you guys. I'm sure some of you were hoping Jimmy would be here, but I am part of that real estate royalty, right? I'm Jimmy's sister. I worked with Pace Morby and Lori Morby. We've done all kinds of projects together including a TV show. So, I know a little bit about real estate and I'm hoping that I can show you maybe a different approach to co-living. First, I want to say how proud I am of all of you that have shown up, given your time, given your weekend and I can see that you're excited about this concept of co-living because it's new. You guys are truly the pioneers of co-living. I think in a year this room will have to at least double and in 5 years that you will need to rent a stadium. I can assure you that because we are on to something really [applause] good. And so, you guys being here in the beginning shows that you have a level of commitment to investment and I believe that because the way that this is aligned, right? When you're thinking about co-living, I don't think all of you are in here just for the ROI. Right? A lot of you are in here because of what it means in your heart to provide housing right now when we see all around us in every state, in every city in this beautiful country of ours, we have people that are really struggling with housing. Yeah? So, are all most of you here for the social part of this in in addition to the ROIs?
>> Yes.
>> Good. I'm happy to hear that because what we did with Housing Accelerator and with the Banana Slug Club is we integrated the ROI with social impact. And the way that we did that was to really partner up with different nonprofits and say, "Hey, look, you need something and we have it. So, let's work together." And by being able to do that, we actually have 100% occupancy. We never have a vacancy. So, every day from the minute that house is ready, we we are occupied and we never have a day when we're not. Imagine that. Because what I heard from a lot of the speakers today was retention was an issue. We don't have that issue. Permitting was an issue. We don't have that issue. Code compliance was an issue. We don't have that issue. A lot of the issues that you guys are facing, being the pioneers of this, we've sort of already figured out because we've been doing this for the past 2 years. 2 years ago, I knocked on my called my brother and I said, "Sweetheart, I'm going to retire. I am done. I am tired. I am done flipping houses. I'm out. The market is and I can't do this anymore." And his response was, "You sound stuck. Let me send you my shaman."
>> [laughter]
>> Okay. Shaman shows up, beautiful young lady, gives me some DMT. I take a hit.
>> [laughter]
>> I see when I was split. That's what I did.
>> [laughter]
>> Okay. And I'm like, "Okay." I like dessert, but I'm not sure I'm getting the full effect of this. Uh she says take another hit and lie back. I take another hit and lie back and I see this. I see co-living. And I I took that as it was an absolute truth. Because when you see it, you have no chance to not believe it cuz you already saw it. Right? I saw the stadium. I saw the people. I heard the conversation. I saw the houses and I said, "Okay, Jamil, it works. I figured it out. I'm not going to retire, but I definitely need a vacation. So, in 30 days I'll come back, we'll figure this out." 30 days later, we started our first house. And we renovated this thing. We did I did the first one with no permit. I decided to take a three-bedroom, one-bathroom house in Phoenix and reconstruct it into a seven-bedroom, seven-bathroom house and not pull a permit.
>> [laughter]
>> Ay, ay, ay. So, here I am about 3 weeks into construction and I'm starting to get nervous because I understand that I'm going to have to go past the regular Facebook ads, the you know, all the ways that people get tenants. I knew that I wasn't going to be able to rely on that because I saw a much bigger vision. Much bigger than, you know, the the person by person rental. So, how am I going to show this to the city of Phoenix knowing I didn't pull permits? That was Thursday. Friday, my contractor calls me, "Hey, are you sitting down?" No, but go ahead, tell me what's going on. We got a stop work order. Oh my god. Thank god. We got a stop work order. You have nothing to worry about. Take the weekend, send everybody home, pay them for the day, take the weekend, let's do the drawings, I'll meet you at the city on Monday. I will wear leather pants and we will walk out with a permit.
>> [laughter]
>> And he said, "Okay." And that's exactly what we did. The city um planning and development looked at the plans because it had two kitchens, seven bedrooms and seven bathrooms, and they said, "Can you tell me what you're building?" And I looked at him dead in the eye and I said, "What do you mean?" "Well, why does this house have seven bedrooms, seven bathrooms, and two kitchens?" And I said, "I'm Asian. That's normal."
>> [laughter]
>> What is it I was saying? Okay, I got a stamp of approval. That was our permit. Wow. And so, I've made the errors, I've made the mistakes, I've done the non-permitting, and yes, it's not worth the heart palpitations. I've done it. Well, you know, when you're building and like we built the 7-7 and we built the 8-8 and we built the 9-9 and then we're like, "Oh man, we should we should keep this at six because for the city that I live in, for the city of Phoenix, 6-6 is your max. 6-6 unlimited people is kind of like your you're in the in the happy zone. Now, I'm lucky because I live in a city that allows me to build ADUs. So, that allows me to maximize how many beds and people can live on my properties because in addition to my 66, I can build another 44 and then another 44. So, really I can have 14 beds and baths cuz I only do a one-to-one ratio. Because if I don't want to share a bathroom, I don't want anybody else to share a bathroom. Do you know why? I don't want that call or that text that says, "Somebody had explosive diarrhea and now I can't use the bathroom. Somebody needs to come and clean this cuz I'm not cleaning it." Well, I'm not cleaning it either. And so, I'm one of those people that really doesn't like conflict. Really. Even though I'm JLo's sister and I work with Pace and I do all the things, I don't like conflicts. I don't like it at all. I like it easy like the life where nobody calls me with a problem, the life where I get to just show up with pizza. Cuz I never ask for rent. Do you know why? Cuz the nonprofits that I work with, they wire me every Friday. So, I'm the person who gets to show up on Wednesday and says, "It's free today!" And we have pizza together. So, what I'm trying to say to you is is there is an elevated way for you to be co-living operators or co-living owners without having to do a lot of the work that you guys are doing now. And I can only say that because I've done it all. Two years of it. I remember the day when I had to put on a hazmat suit to clean up the vomit and all that in one of the rooms. And when that happens to any of you guys, make sure you call me cuz it's going to happen because it happens because you can't control who lives and what happens in this house. You don't live there. So, unless you're house hacking, you have no idea. And the story that we heard about the guest or the slash ghost who was eating pizza at 2:00 in the morning, and the poor host is getting calls saying, "Who left the dirty dish?" The way we construct our houses are always a one-to-one ratio, one bathroom, one bedroom, en suite, on suite. Everybody has their own television. Everybody has their own desk. Everybody has their own clean bag. Everybody has their own mini splits. Do you know why? I live in Phoenix. It is hot It is so hot that I don't want to hear from the lady who's menopausal and he's down at 62, and I don't want to hear from the other guy who wants it at 78. Pick your temperature, folks, and that's your room. Be happy. And also, the power bills in my houses, even in the summer, are no larger than about 250. And that's with everybody running those AC mini splits all day long. So, it's it's great for the environment, it's great for the pocketbook, it's great for the operator who doesn't have to handle the call, right? I've done all I've made all the mistakes, guys, all of them. And so, I want you to understand that there isn't a volved way to do this where you're not necessarily having to deal with the day-to-day. Now, in Phoenix, we had a big gap with deportations. And the industries that got affected the most were construction, service industries, construction industries, because either people were deported or they left, they self-deported before they got deported. So, we were looking at, well, we have a few different issues here. How are we going to build these houses? And how are we going to fill these houses? Those were our two questions. And I'm really lucky because I have an amazing team, and my amazing team has all kinds of answers. We said, "All right, well, where do we find people that are documented and that are looking for another chance?" Prison. We'll figure it out. The city of the state of the rather the county of Maricopa releases 900 inmates a month.
>> Wow.
>> 900 inmates a month get released and the majority of them have nowhere to go. Now, nearly 100% of them are going to go into something called an IOP, which is an intensive outpatient program, which doesn't have a housing partner. So, we knocked on the doors and said, "Hey, how about you use that Medicaid funding that you get, that's guaranteed by the government, and you use a part of it for towards housing, and we build you these amazing houses and you fill them." And they said, "Wait a second. We have 400 people living in a hotel right now. Are you trying to tell me we can get them out of that hotel and into these houses?" Yes. And we ran out of houses. And so, now we've got people coming in out of the prison system, into the IOPs, getting therapy, living in our banana suites. Step two, we still have a shortage of employment in the state. How do we help that? Well, the other thing is second chance employers are far and few between. But, if you decide to have say, "Hey, we have a gap in construction and you guys want work. How about we train you?" So, now we're actually in a situation where our members are being trained in construction and are helping to build the next houses. Go go figure. That's one That's one nonprofit that we work with. Another one that we just And you know, kudos to you guys for showing up because I actually made a a connection today with somebody I already know, but didn't realize how we could work together. She's got a nonprofit mission center of the state. This woman is incredible.
>> [applause and cheering]
>> I have a nonprofit that deals with children that are aging out of foster care. She figured out a way to secure them a full scholarship, a full ride through any of the universities in Maricopa County, including ASU, our community colleges, and GCU, which is a private college. And we sat there and I said to her, "One second. We just finished a house, and they just got their financing. Do you want it?" And she got so excited, she wanted to leave early so [laughter] she could figure it all out. And I said, "No, just wait. At least hear me speak, and then go." And that's what she's doing. She's going to take on one of the next houses, and she's going to fill it with kids that are aging out of foster care that have a full ride, and we are our maybe a two-block walk to the university. So, that's one conversation. You guys live in states where you want to do this, go have the conversations. There are people that you can talk to. And now, if you're tired and you don't want to, or your W-2 doesn't allow you to, then just call me, and I'll help you do it in Phoenix. Will I help you do it in Florida? Probably not. Will I move out of Texas? No. A lot of hair, a lot of humidity, not interested. But, once we have enough data in Phoenix, I should be able to give you that data, and you should be able to go to your states and your cities and your governments and say, "Look, this is working in Phoenix." And I'll show you how much money the city of Phoenix made on permit fees, on taxes, on income tax, because now we're dealing with people that didn't have employment that are now consumers. Right? Everybody wins. Everybody wins.
>> [applause]
>> I didn't realize I had so much talking in me, one second. Okay, so we started at 8:00. This is what this says, but really it's because I was high. But, here we go. We started with an asset because the demands exceeded the traditional housing. Absolutely, 100%. You guys know all this. You guys are already co-living guys, so let's keep going. Affordable housing is under pressure, 100%. They need stable housing, not luxury housing. Co-living Kate, I don't mean you. You guys are great. You keep doing those luxuries. Um the organizations that we're dealing with like Mickey's Place from Michelle, like these different IOPs, they really do need a housing partner. They need a housing solution. Because how do you provide therapy or outpatient treatment for trauma to 70 people living in 30 hotel rooms? It's just not possible. You need one vulnerable person there to fall off the wagon and you have 69 new problems. Yeah? We're a co-living operator and an investment platform. Yes, I have Vladimir. You didn't think you were going to get away. Just stand up for one second. You see Vladimir? He [applause] is a tech guru and he's trying to introduce me to the world of AI. I'm over 50 years old. The world of AI seems to me like bananas. I'm like wow, AI age is not interested, but he is introducing us to that and he built the entire platform that Bananas Split runs on and it is an incredible platform. Um What do we do? Well, we're going to help you find a house because remember Jamila is my brother. Probably one of the best tall sellers in the country and I don't think there's a there's a property that gets released that doesn't hit him first. So we help you find it. Then we're going to figure out, is it is it right for co-living? Now when when you when I say is it right for co-living, I'm not looking at the traditional is it next to a bus stop, is it next to a mall, is it walkable? Those aren't always the criteria we need. We have to look at the vulnerability of the people that we're housing. So even if it's next to transit, even if it's next to a mall or it's walkable, is it in an area that's going to be difficult for vulnerable populations to to live in. If that's the case, we don't take it. So, we drive I drive I drive and I drive all day every single property before we acquire it to make sure that it's in the right neighborhood, right for our partners. Now that we're we're bringing on Michelle as a partner, we're going to look how close is it to a school? How close is it to post secondary and does that particular post secondary also allow for a full ride for her students? So, as we continue to grow, we're going to continue to open up our parameters and see which is the best location. We're going to renovate and optimize. I got my contractors license. Oh my god, it's like four novels of books. And they ask me the most ridiculous questions like, what size screw will you need if you were in a seismic situation? Sweetheart, I'm in Arizona. I don't need any seismic stuff. No, but you're going to have to be working it if you work in California, then you would you would know. Okay, anyways, I passed. So, I got it. So, we will help you renovate renovate and optimize layout. Now, we don't necessarily turn a three two into a six six by adding some walls. We take it down to maybe one wall. Right? There's only one wall we need. And then we're going to rebuild that entire property. And then at that point, we're going to be able to say it's done. Or we're going to buy land and we're going to we're going to build on land. And so, we have certain blueprints, certain plans that we're always going to follow. Then we're going to manage it and we're going to and we're going to make sure that everybody it's always filled and we're going to send you a wire. Well, Vladimir does. Vladimir sends a wire every month on the 15th, everybody gets paid. We have a few of our Housing Alpha members members I think here. Rebecca's here. Rebecca's probably our our best She's our natural our only lender cuz she's the best lender. So, she's our lender. She knows >> [applause] >> figure out everybody's DTI in the end. Um and we don't have to do any of that, hey, let's let's build it this way and get the appraisal and then let's redo it this way and get another We're we're just not interested in that. We build it right the very first time. Everything's permitted the very first time. And then we get an appraisal the very first time and that's how it works. We don't do a bunch of nonsense in the end. And then we're going to give you the check. That's it. So for those of you who love to do the work, this is a good time for you to go get a coffee. For those of you who don't want to do the work and still want the ROI, keep listening. We're actually able to put them in our single-family structures. I'm not rezoning anything. So even when I have 14 beds, 14 baths, I didn't apply for rezoning. Because the state the county rather allows me to build my ADUs. So I can build up to three. Now, Ms. Rebecca has a house that has will have three ADUs and the main house. So six six on the main house, three ADUs at five five. That's 15 and six, 21 beds. On a half acre. Yeah, you're on a half acre. Half acre. So still plenty of land, but 21 beds. And she bought that property for 300 grand. So the her ROI is bananas. I'm going to show you some good ROIs here in a second. Why do you think it makes the ROI make it stronger? Well, because you're not dealing with the the calls. I mean, none of you want it None of you want that call. The explosive diarrhea call, no. The dishes in the sink call, no. Nobody wants that. The fentanyl room call, you know how I found out about fentanyl? Because the guy next door called me and said, "There's fentanyl in this in the guy next door is making fentanyl." What am I What am I going to do? I mean, you've got no choice. You have to go and clean it up. Okay, so unless you said it was one of our nonprofits, we we house 100 individuals like like that. Right? Remember they had them all in a hotel. So it took about four days to get everybody mobilized. And we have It says 100 waiting list, but I think we're closer to 165 right now. So, I can't build them fast enough. I I honestly can't. Housing is not just a bed, it's stable. Housing supports employment, routine, recovery. Now, my brilliant team came up with that plan, right? About the employment. So, construction was definitely the first way we started offering employment to our members. The second way is we're actually opening up a second agency. Now, imagine this. You are the hiring manager at Amazon. And your biggest issue is you only pay $21 an hour. And at $21 an hour, the chances of all of your employees making it to work every day is slim. Because at $21 an hour, you probably as an individual don't have stable housing and probably don't have a car, right? Especially at six bucks a gallon, even if you have a car, you're not filling it up. We're there to say we're going to provide you a shift. So, imagine the bus comes, the Bonanza bus comes, picks everybody up. So, we've offered a shift. 54 54 people fit in that bus. 54 people get picked up and dropped off at Amazon. And then at the end of the shift, they get picked up and brought back home. I don't think there's an employer ever that's going to say no, thank you. That's what our next step is. And and we're getting there. We're We're making the calls, knocking on doors, getting it done. What does an investor and a financial actually look like? Well, you're going to get It's just going to be done. I And I don't want you to feel like I'm taking anything away from you. So, if you like talking to the wholesalers and you love dealing with contractors and you want the exclusive diary and call, you should do this on your own. But if any of those things don't sound appealing to you, then you should probably give me a call. Acquisition to refinance the cash flow. There we go, one more time. I'm going to give you some case studies. This is our 21st street. This is three houses side by side by side in South Mountain. That's basically what our floor plan looks like. There's our renovation breakdown. So, total is 331871 to build. These are all new constructions. This is what it cost with the purchase price of the lot at 115, the renovation budget we're at 446 is the total. Six bedrooms, 260 a week, projected ARV, projected refi, how much cash is returned, investor capital remaining. So, the people who bought into this deal they got 41,000 about 40k in the deal. And this was their ROI, cash on cash. Give them a round of applause. Yeah, I know, right? One more time, give me one big round of applause.
>> [applause]
>> That was better. So, this was an existing house. This was not new construction. And so, there's our renovation breakdown. It was 244586. Total cost of the project was 409. His cash on cash return is 405. Here's our Solano rendering. That's you, right? That's your house. So, there's hers. There's she. Her total for the rehab was 211. Her cash on cash is 44%. And here's Q&A, 5 minutes, okay. Q&A, uh so, here's our Miguel rendering. These are three on the on the main road, on a main thoroughfare in Phoenix. And the front colors because that particular neighborhood is a really like a historical neighborhood. They're not going to be fluorescent, but they're going to be brighter. Like like like think cozy condo. Like think yellow, right? Yellow, pink, blue, like that. That's the the floor plan. It's These are two stories. There's our case study. Their cash on cash is 60%. Our core strength is our proprietary software. You guys pay 7% I think on passive. 7 8 What's what's the 8%? You're paying for the You're paying for the the software, right? So, we're already we're offering you that software. Uh the value we create is a social and economic impact. We're having neighborhood employment. Now, imagine houses that we're buying. If there is a house there, you can imagine it to be the worst house on the block. It probably has infinite amounts of rodents, cockroaches, termites. Is Is that the worst you've seen, right here? Oh, yeah. The feces The feces is out there. Whenever you have the animal you have the feces. We had one house that they had left I think they were they were evicted, so they left four dozen eggs out. The house was vacant for 3 years. It was a lot. It It was a lot. I mean, my my guys have been through a lot in terms of construction and they were having a very difficult time keeping anything down. I'm not kidding. It's It's phenomenal. And the fact that you get that check or that wire You send a wire, right? A wire every month between the 15th and 16th is You get it on the 15th and 16th, Rebecca? Yeah, there you go. Um it's great. But, it's more than just the cash flow cash because if if you guys were just interested in the money behind real estate, I don't know I'm not sure you'd be in this room. There is that element of social impact and that's what co-living allows you for. And working with organizations and nonprofits really gives us that opportunity. Here's a plug for me. Uh we do have a coaching program. It's called Housing Alchemy. The demand is really yes. We don't have a lot of space in it and I'll tell you why because everybody who joins Housing Alchemy ends up buying a house in Phoenix, ends up um and so I can only take on so many. So, I think we're we're only opening it up to like six people. So, if this is something that interests you, I will give you a QR code and you can join. If you don't, it's okay. You can wait for the data and take this to your own state. I'm okay with that, too. I want the movement to go far.
>> I was very inspired by you what you and Mel are doing. And so I started properties of purpose here in Colorado as you know that person who digs into the organizations to find who can actually who needs the housing here in Colorado. And so I'm always inspired by you guys' story and and what you're doing. But my question is is when you're building from ground up I know Arizona Phoenix is much different than Denver. But I'm I'm curious about the numbers and how they work with Mercy Center, right?
>> Yeah.
>> Um because you know a lot of the organizations and the nonprofits sober livings aging out foster care domestic violence like a lot of those organizations don't have that kind of money.
>> Do you have a spice? Do you have a calculator? Do you have a phone?
>> I have a phone.
>> You have a phone.
>> That's why I'm asking. How do the numbers go up?
>> So let's look at HUD bash. Okay. So HUD bash is VA. So don't worry about HUD bash. Let's look at HUD. HUD will pay up to $1,200 per room on holiday. Okay. Divide that by 4.33.
>> 2277.24
>> That's what you get for a week. So HUD which is a government agency will pay that. Now let's think about So what what I'm asking you to do is Renee, right?
>> Yes.
>> What [clears throat] I'm asking you to do Renee is when you are starting to talk to people I want you to ask them how do you how can we help you fund your housing? Does that mean we need to help you find the HUD vouchers? Or does it mean what if you're because like Mercy Center the IOPs they get money from Medicaid. They get roughly $500 a day per person. If you divide 260 by 7 that's $37. All of them are willing to pay $37 out of their $500 for safe and stable housing. So they may say well we don't have the money. And that's probably because they They like they don't know where to get it.
>> Right. But a lot of HUD vouchers are frozen right now. So, there's not more people getting HUD vouchers in certain states.
>> I haven't seen that in in Arizona. So, is that something that you guys are facing in your area?
>> It's actually something I'm working with somebody in Chattanooga.
>> Okay.
>> And she is experiencing that with um some of the organizations there.
>> Anybody else here having any trouble with HUD? No? You? What state are you from?
>> Um Baltimore with HUD.
>> Come on. Come on. Stand up. And can you get her a mic?
>> Um in Baltimore, we're trying to put properties in Section 8 and they said they have
>> So, it's not the voucher program? Come on up here and sit.
>> [laughter]
>> Section Section 8 is different than HUD. Okay. Section 8 is a part of HUD, but it's not HUD. Section 8 does not identify co-living. It doesn't allow for it. But HUD does.
>> Okay.
>> So, two different things. What I need you to do is actually go to the federal level. Fed Section 8 HUD is federal. And I want to I want to talk to you about something interesting.
>> All right.
>> Okay.
>> [laughter]
>> So, we're done?
>> Yeah.
>> [laughter]
>> I want to talk to you about something interesting. A lot of people here say, "Well, how do I get past the what the city says I can build?" How many people unrelated can live in a house, right? How do we get past that? There is a way. It's a HUD reg- it's a HUD regulation. It's called a functional family. A functional family is not determined by blood or marriage. It's determined by function. So, if you decided to build the 88 or the 99 or the 14 13, whatever you The The numbers I heard the last two days have been phenomenal. If you decide to build that and you have a functional family living in that house, what does that mean? You can't have locks on your pantries. You can't put a lock on your pantry because if you're a family, you share food. Okay? But other than that, there really isn't that much else.
>> No locks on the bedrooms?
>> Locks on the bedrooms are were
>> So, the calls we should be doing are different than it should have been.
>> The calls are still going to be to the housing authority?
>> Yes.
>> Our local housing authority. How should our questions change?
>> So, are you looking maybe to work with vets?
>> Yes.
>> Okay. So, you have to go to the VA.
>> fill these houses.
>> The VA. The VA will will give HUD VASH HUD VASH vouchers to the veterans. And because it's HUD, you're allowed to have the the payment go into co-living. Now, imagine they don't That voucher is only $1,200. They max out at $1,200. And that $1,200 has to cover the where they sleep, and all the utility, and Wi-Fi, and everything else. And if it doesn't, then they have to come out of their own pocket. So, by providing that room and around $270 a week, you're falling in line with exactly what they need.
>> Okay. So, we're just going to be be better at making calls and asking the right questions.
>> Do you have stand-down events in Maryland?
>> No. Not that I'm Not that I'm aware of.
>> So, I want you to do this. Soon as you get back,
>> Okay.
>> I want you to look at veteran events.
>> Okay.
>> And then I want you to call the organizers.
>> Okay.
>> And then I want you to say, "Hey, look, I offer affordable housing." And I want you to look at that event.
>> Okay.
>> I want you to show up at the stand-down events. Any events where there is veterans.
>> All right.
>> And I want you to say, "I have the right house for you." Because you're not going to be alone. When you have six people living in a house and they're vulnerable, like veterans,
>> Yeah.
>> if you give them a situation where they're not alone, then we start fighting that the new newest epidemic, which is loneliness. We start fighting that, you'll be surprised at how much help you'll get. You'll be the belle of the ball.
>> Okay.
>> Thank you. Thank you. Thank you.
>> So,
>> [applause]
>> I'm going to finish I'm going to finish your question. So, the second part of your question was
>> I'm not I'm not in that part of that conversation as far as the second part. Um I I think just the the numbers and how they work out, you know, on the new build because, you know, I'm looking at a lot of conventional
>> So, so tell me, what does land typically cost in your Denver? What does land typically cost in Denver?
>> Oh my gosh, if you can find it in Denver.
>> So, you want to do this in Phoenix? A typical lot in Phoenix is anywhere between 130, 150. 130, 150 can usually get you at least enough to buy a in 166 and maybe 244s. So, the numbers I'm giving you are Phoenix numbers because I don't have your I don't know what land costs in Denver. And our And our we're building it around 135 a square foot. So, on a two-story, it's 2240 square feet. You've got the calculator. Do two 2240 * $130. What are we What are we at?
>> $291,000.
>> So, that's my cost of construction is about 300k. I bought the lot around, let's say, 150. What am I at? The median household price in Phoenix is $450,000. I have to stay within ARV. Cuz if I don't stay within ARV, the person that bought this The investor that's invested is not going to be able to take that hard money out and pay the hard money back. So, even though I'm building a 66 and there's no comps for a 66 and but and the neighborhood is a 32 at best, but it's at 450, I stay at 450. Which means I have to get my land down to the price where I need it because my construction is pretty well the same. I can't really say why I'm building in South Phoenix, so I need a better rate on my drywall. That's not going to work. So, I have to get my land to be exactly where I need it to be so that I'm always going to be under ARV. Which then I think a lot of you suffer with that, right? Is how am I going to get this to comp out? Because how am I going to get this to the number where I need it to be so that I can get the hard money guy paid out. And the way we do it is if you're buying land, I typically have the investor buy out the land. So, generally, most of our investors have to come up with about 150k. 150k will either get you your first land deal or your first land and I'll get you the rest of financing to build or the 150K will be 30% of the rehab of the purchase of the rehab property and the first draw. Then I can get you the hard money for the rest. What I got to make sure I get that hard money out. So you being successful is up to is me being successful. If I can't get that hard money out then I can't really use that money, right? So what I need you to do, Renee, is you have Do you have a contractor that you deal with?
>> No, not yet.
>> First step, find out what are the contractors charging per square foot. And Renee, when this is done, will you ask me for my email? And I will give it to you and I'll send you a format. So then the contractor understands what you're building. Because six bedrooms and six bathrooms cost more to build than three bedrooms and two bathrooms because living rooms take up a lot of space, right? So that's space that they don't have to add extra bathrooms to. So I need you to take this to a contractor and say, "If if I give you this project, what's your cost per square foot?" And then you work backwards and say, "What's the What's the ARV in this neighborhood and how do we make that work for the price that I'm going to buy this house at?" And then you go back and you make a disrespectful offer.
>> [laughter]
>> Say, "Hey, I'm not going to be able to buy this for anything less than this. You know, I can't buy this for anything more than what what this is because this is what I'm going to do with it. So if you want it sold, um you're my buyer, but I need you to get it for this price." Yeah?
>> Yeah, I'll see tonight at the meet up then.
>> Yeah, actually that's the gist of it. I have to run cuz I have another meet up today. So I love you guys.