Latest / Own More Doors / #62 From Duplex to 51 Units: ADU & ED1 Blueprint for SoCal Investors (Andrew Slocum)

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#62 From Duplex to 51 Units: ADU & ED1 Blueprint for SoCal Investors (Andrew Slocum) · Own More Doors

0:00
SPEAKER_00: In today's show, I'm going to show you how one of the investors that we're working with took a duplex and is now going to be building 51 units on that site.
0:09
SPEAKER_00: The site is a 9,000 square foot lot.
0:12
SPEAKER_00: Only in South LA through the ED1 program, we're going to be talking about that.
0:15
SPEAKER_00: We're also going to be showing you that if you own a four-unit building and you have the space, you could build four ADUs.
0:22
SPEAKER_00: If you have an eight-unit building and you have the space, you could build eight ADUs.
0:26
SPEAKER_00: That's accessory dwelling units.
0:28
SPEAKER_00: So tune in to today's show when we interview Andrew Slocum and let's learn from him and what he has to say.
0:34
SPEAKER_00: Hey everyone, Juan Weezar here, and I'm pleased to have and welcome Andrew Slocum, who's a housing advocate and a developer.
0:41
SPEAKER_00: He's an investor.
0:43
SPEAKER_00: And what I like about Andrew is that he not only talks the talk, he walks the walk.
0:50
SPEAKER_00: And so we're going to dive in today on what are the best ways that multifamily owners, housing providers, what are the best ways to make money?
0:58
SPEAKER_00: And the reason why I have Andrew in here is that Andrew's going to be talking about ADUs developments in Long Beach, South LA.
1:07
SPEAKER_00: He's going to be talking about his projects.
1:09
SPEAKER_00: And we get to learn from Andrew, someone who's actually doing it.
1:12
SPEAKER_00: How is he making money?
1:14
SPEAKER_00: How are his clients making money so that you could be a better investor?
1:18
SPEAKER_00: So, Andrew, thank you for being here.
1:20
SPEAKER_01: Absolutely.
1:20
SPEAKER_01: Thanks, Valley.
1:21
SPEAKER_00: Hey, so let's go over right now.
1:25
SPEAKER_00: When people buy apartment buildings in the past, it was hey, I'm I'm buying an apartment building because um I want to do value add.
1:32
SPEAKER_00: Sure.
1:32
SPEAKER_00: And that meant that you were going to make the property better, raises income.
1:36
SPEAKER_00: And when you raise the income, you raise the value of the property.
1:39
SPEAKER_00: That's like a very basic level, that's what that means.
1:42
SPEAKER_00: Andrew, you you were out there working on a hundred plus projects with housing providers, multifamily owners.
1:50
SPEAKER_00: What are they doing to make money?
1:52
SPEAKER_00: What are you doing to try to create wealth or or uh equity in your assets?
1:57
SPEAKER_00: Like, what are the top ways that you could tell us about?
1:59
SPEAKER_01: I think you hit the nail on the head.
2:01
SPEAKER_01: Like before, the only path to ownership and to create value was just the value add strategy.
2:07
SPEAKER_01: And uh what we have now is um a value add with another value add component on it.
2:12
SPEAKER_01: And that's the ability to um add more units, whether it's conversion of space or new construction from detached ADUs.
2:21
SPEAKER_01: Um, and that is the new path uh that I see, especially in California, because these are state laws that we're using that aren't just in Long Beach or just in South LA.
2:33
SPEAKER_01: This is all across California that you can use this strategy.
2:37
SPEAKER_00: Andrew, so when when they first passed the ADU law, it was only if you had a single family home you could build an accessory dwelling unit.
2:44
SPEAKER_00: That was in the beginning.
2:46
SPEAKER_00: Every year it seemed to me like they were loosening up the rules and now you could build more than one.
2:51
SPEAKER_00: Because you focus in on multifamily and maybe walk us through.
2:54
SPEAKER_00: I mean, sometimes people think like, hey, I have an eight-unit building, I could only build one, right?
3:00
SPEAKER_00: What's the new rule?
3:01
SPEAKER_00: Where are we at today?
3:02
SPEAKER_00: You know, we're we're uh, you know, towards the end of August in 2025.
3:06
SPEAKER_00: What are you seeing?
3:08
SPEAKER_00: What is being allowed by a lot of the cities?
3:10
SPEAKER_00: Like, and let's just use like an eight-unit as an uh example.
3:13
SPEAKER_00: It's got parking in the back.
3:15
SPEAKER_00: What are they allowing for for something like that to have in terms of ADUs?
3:18
SPEAKER_00: Because it's no longer one.
3:19
SPEAKER_00: No.
3:19
SPEAKER_00: Okay.
3:20
SPEAKER_01: And and there is that misconception, like ADUs, it's adding a unit in the back to your single family home for your grandma and called Granny Flat.
3:28
SPEAKER_01: And that has been not really the same since 2020.
3:32
SPEAKER_01: Um, and as you mentioned, like the rules keep changing.
3:35
SPEAKER_01: Every year they get stronger.
3:36
SPEAKER_01: So uh between 2020 and 2024, it was you could just you could add two detached ADUs to a back of any multifamily building, which is like a duplex or more.
3:47
SPEAKER_01: As of 2025, you can add up to eight units of detached accessory dwelling units, as long as you don't exceed the number of units.
3:57
SPEAKER_01: So if you have a duplex, you can add two.
4:00
SPEAKER_01: If you have a four-unit building, you can add four.
4:03
SPEAKER_01: If you have the eight-unit building, like in this scenario, you can add eight.
4:07
SPEAKER_01: That's where it stops.
4:08
SPEAKER_01: So if you have a 10-unit building, it's eight.
4:10
SPEAKER_01: That's the cap.
4:12
SPEAKER_01: But you also can convert space that is unusable in the existing building as well at 25%.
4:19
SPEAKER_01: So if you had an eight-unit building that say had tuck under parking or attached garages, eight times 25% is two more, plus you have the eight.
4:29
SPEAKER_01: So in this like ideal situation that is rare, you could turn an eight-unit building into an 18-unit building.
4:36
SPEAKER_00: Okay, so let's go back.
4:37
SPEAKER_00: Okay, because so that's a lot, and that's good.
4:39
SPEAKER_00: So this is this is if you're if you're an owner and you're looking at your building, the market has been sluggish and multifamily.
4:47
SPEAKER_00: I mean, it's it's been tough.
4:48
SPEAKER_00: Andrew Owes uh owns several buildings throughout Long Beach and other parts.
4:52
SPEAKER_00: We've been able to work together on deals, had some success.
4:55
SPEAKER_00: It was the highest price forplex in North Long Beach that that we were successfully able to work together, get that one sold.
5:01
SPEAKER_00: And so the market is sluggish.
5:03
SPEAKER_00: And so when you're an owner, you got to be thinking, okay, I'm either gonna list the property because for one reason or the other, I'm I'm kind of fed up with all the rules and I can't keep up anymore, or can I add value before I sell it?
5:16
SPEAKER_00: Yes.
5:17
SPEAKER_00: Or do I just let someone else do the work?
5:19
SPEAKER_00: But so there's there's different options and there's no right way depending on who you are.
5:23
SPEAKER_00: But for the people who believe in building an ADUs, because this is a question that I'll get from a lot of clients is it worth building an ADU?
5:30
SPEAKER_00: How do you answer that?
5:32
SPEAKER_01: I I have yet to see a situation where it isn't, may it doesn't make sense for multifamily building stat and ADU.
5:39
SPEAKER_01: When you're talking about your per unit basis and what you're building them for, it is always much lower a basis to build a new unit than what the value of it is.
5:48
SPEAKER_01: Um, whether or not you know the headache of construction is for you, if you're built for this or not, I think that's a question that you should ask yourself.
5:57
SPEAKER_01: Um but I think even if you aren't looking into it, you should understand if your property has this potential when you're talking about selling it.
6:05
SPEAKER_01: Um, because there is an upside to people who are using ADUs as what they look for.
6:10
SPEAKER_01: So there is multiple groups, and now that that number is eight units, it's attracted private equity and larger capital groups that when it was two units, they weren't excited about two units.
6:20
SPEAKER_01: Now adding eight units to an eight unit building, you're doubling the unit count.
6:23
SPEAKER_01: That's very exciting to people.
6:25
SPEAKER_01: And so if you aren't looking at this to your buildings, even if you aren't gonna do the work, I think you're missing out on what the potential for that is.
6:34
SPEAKER_00: When Andrew, when you talk about a per unit cost, um, can you give us an example?
6:39
SPEAKER_00: Like if someone comes to you and says, hey, ballpark, what's it gonna cost?
6:42
SPEAKER_00: Like I own a fourplex, I hear you.
6:44
SPEAKER_00: It turns out that I do have the space for four more units.
6:48
SPEAKER_00: What are you telling them it's gonna cost per unit?
6:51
SPEAKER_00: I mean, I could tell you what I think we could sell the units for, but what what's the cost that you're seeing?
6:56
SPEAKER_01: And I I know it could change, but just more or less.
6:58
SPEAKER_01: I mean, it's obviously the hardest thing to in stone say, but I would say like between 125,000 to 200,000 based on the like the size.
7:07
SPEAKER_01: So um, right now I'm building uh four detached ADUs as two duplexes, and those are 800 square feet, two bedroom, two bath, and they're roughly around 190,000 a unit.
7:18
SPEAKER_01: And you can't buy 190,000 a unit in these places where they are.
7:22
SPEAKER_01: And um, so that's what I talk, what I'm talking about when I'm saying like the the basis of what you're paying for and what you get out of it, you there is that delta between what it's worth and what you're creating these units for.
7:35
SPEAKER_00: I think if you're if you're an owner and you're thinking about selling and you don't know the possibilities of what you currently have, and let's just say you do have uh a large lot, or let's just say you do have parking in the back, Andrew, how would you advise them?
7:49
SPEAKER_00: Like, what's the best way?
7:50
SPEAKER_00: Can they, can they, because I think because you're saying, hey, there's there's there's larger investors now chasing these types of property, so long as we have the opportunity.
8:00
SPEAKER_00: Now we know that there's apartment buildings where they're maxed out.
8:03
SPEAKER_00: There is nothing that could be built.
8:07
SPEAKER_00: But what can someone do to say, you know what, I don't want to leave money on the table?
8:10
SPEAKER_00: How many ADUs would the city lay?
8:13
SPEAKER_00: Like, is there a way to say, I don't want to build them, I don't want to sign up for the plans, but can I find this out?
8:18
SPEAKER_00: Does that exist?
8:18
SPEAKER_00: Can they can they call you?
8:20
SPEAKER_00: Is that something that's a service, maybe?
8:22
SPEAKER_01: Yeah, I mean, they they can, but I think really the rules are so simple.
8:26
SPEAKER_01: Like it's is there open space?
8:29
SPEAKER_01: And the setback, meaning from like the property line to where this new building is, is four feet.
8:36
SPEAKER_01: And then let's say on average, you need a six-foot separation from the existing building to the new building.
8:41
SPEAKER_01: So with those two numbers, you can go to your building and take a look and say, is there space there with a six-foot separation and four feet on the rear and the side?
8:50
SPEAKER_01: Is there space there?
8:52
SPEAKER_01: You don't even need me to say that.
8:54
SPEAKER_01: You can figure at least that part, and that's where you can say, Oh, I do have this opportunity.
8:59
SPEAKER_01: Then once you realize that, then you can go and figure out in more detail, like, oh, I can add five or six 450 square foot units and really dive into it.
9:10
SPEAKER_01: But when you have a building that's fully maxed out, there's no anything but units and staircase and hallways, like this isn't, this isn't for that.
9:17
SPEAKER_00: Right.
9:18
SPEAKER_00: You could certainly reach out to us here at Sage Real Estate and say, hey, this is the site that I have.
9:22
SPEAKER_00: Um, or one could actually call the city, right?
9:26
SPEAKER_00: Someone could call the city and say, can can, you know, call call the planning department is where I would start and say, I have this property, I want to build something to use, I have the space.
9:34
SPEAKER_00: Now, here's what I've learned, Andrew, is that you could call the city five different times, five different days, and you're gonna get five different answers.
9:40
SPEAKER_00: Sure.
9:40
SPEAKER_00: Or or no answer.
9:41
SPEAKER_00: Or no answer, or or the answer is no.
9:43
SPEAKER_00: Yeah.
9:43
SPEAKER_00: So yes, so don't give up by calling once.
9:46
SPEAKER_00: I would say call several times.
9:47
SPEAKER_00: But like if you're someone, like no one wants to leave money on the table.
9:51
SPEAKER_00: Right.
9:51
SPEAKER_00: And I think that if we if we market a property and and if you hire the wrong broker who says, oh yeah, someone can build an ADU or two in the back and it's eight units, that broker doesn't know the potential of the eight units plus the 25% that Andrew just mentioned.
10:05
SPEAKER_00: And all of a sudden, the other side representing the buyer does know maybe they're paying you your price, you think you're winning, but you're you're probably not maximizing on what you should have because you didn't know.
10:16
SPEAKER_00: And not everyone is gonna know this.
10:19
SPEAKER_01: And I'll add, like, I don't really care what your philosophical feeling is on parking or things like that.
10:26
SPEAKER_01: Yeah, the buyer gets to decide that.
10:28
SPEAKER_01: So whether or not you don't like that you get rid of parking, well, there are buyers that are buying and and don't really care about that as much as you are.
10:36
SPEAKER_01: So by not by focusing too much on what you think it should be, I think you are leaving that option for people who think differently.
10:44
SPEAKER_00: I I giggle because sometimes people would say, yeah, but if I get rid of these four parking spaces, I rent each one out for a hundred dollars.
10:51
SPEAKER_00: I'm like, that's four hundred dollars.
10:53
SPEAKER_00: Yeah, what's your unit gonna be?
10:54
SPEAKER_00: How much do you think you're gonna get for one unit, let alone four if you have the potential?
10:59
SPEAKER_00: And so I just think that there's um there's there's a lot of income that people are and the other misconception is people think if I eliminate parking, my tenants are gonna leave.
11:09
SPEAKER_00: Yeah, and it's not.
11:11
SPEAKER_01: And in my experience, most of the garages or parking isn't even used for cars, it's mainly storage.
11:17
SPEAKER_01: And of all the buildings I've converted, the garages or parking units, I haven't had that problem.
11:23
SPEAKER_01: In fact, some of them have lines out the door to lease them up.
11:26
SPEAKER_01: You know, there is uh wherever you are, you may have to do a reduction of services based on like the housing department if you take something away from someone.
11:35
SPEAKER_01: But that number is still so much lower than what you get when you're saying like a parking spot's$100.
11:40
SPEAKER_01: A unit isn't, you know, it's thousands.
11:43
SPEAKER_01: Yeah.
11:43
SPEAKER_01: So it's that delta between it almost always, in my experience, makes sense.
11:48
SPEAKER_00: Got it.
11:49
SPEAKER_00: Andrew, you've you've successfully purchased um different types of properties, but the ones that I'm familiar with, you've you've bought like a duplex, you've built two more ADUs, um, you've bought in different sized properties and you're building ADUs.
12:01
SPEAKER_00: Can you kind of walk us through maybe some simple math on like, hey, this is what we're paying for these types of properties, this is what we're selling them for.
12:08
SPEAKER_00: Um, just so that we get it, so our viewers get an example of like why you're doing it and and more importantly, are you making money?
12:14
SPEAKER_00: Yeah.
12:15
SPEAKER_00: Yeah.
12:15
SPEAKER_01: One thing I thought about when we were going to talk about this is that I do have a building that uh was a duplex where I added two units.
12:22
SPEAKER_01: And I think if I went back again, I would do it differently.
12:24
SPEAKER_01: Okay.
12:25
SPEAKER_01: I think I would have just added the one unit instead of the two.
12:28
SPEAKER_01: Okay.
12:28
SPEAKER_01: Um, when we're talking about uh under that four unit delta where you're still in like a um like a residential loan, um, we have found out that uh the FHA loan guidelines don't allow for two units.
12:44
SPEAKER_01: And we really restricted our buyer pool for that.
12:47
SPEAKER_00: Uh okay.
12:48
SPEAKER_00: I okay.
12:48
SPEAKER_00: So so what Andrew's saying is he had a duplex, he added two more, and adding those two more created a financing problem.
12:57
SPEAKER_00: So typically when you're under four units, I tell people you have the biggest pool of buyers.
13:02
SPEAKER_00: But in this case, those additional two created financing issues.
13:07
SPEAKER_00: In fact, I have a listing right now.
13:08
SPEAKER_00: It's two units in the front, two units in the back.
13:10
SPEAKER_00: Is it mine?
13:11
SPEAKER_00: No, it's not yours.
13:13
SPEAKER_00: Oh, okay.
13:13
SPEAKER_00: It's not yours.
13:14
SPEAKER_00: We we sold the one I'm thinking of, but but there's but there's one that that I have on Sixth Street that that I don't think you built.
13:19
SPEAKER_00: And and it's creating a problem.
13:21
SPEAKER_00: And I I think you're right.
13:23
SPEAKER_00: If it was one unit, yeah, it changes it.
13:26
SPEAKER_01: Yeah, and a larger unit that maybe rented more, I think I would probably have a little bit less value on the total, but I would be able to exit.
13:34
SPEAKER_01: Where right now I have no interest um at all.
13:38
SPEAKER_00: Yeah, so like I was saying, interest rates are still high.
13:42
SPEAKER_00: Yeah, everyone's waiting and reading everything out there, and some things just look positive, like interest rates could be dropping.
13:48
SPEAKER_00: I mean, I know everyone that that works in real estate is like praying for this to happen.
13:52
SPEAKER_00: Every owner out there that has a property on their market, uh, has a property on the market keeps saying, well, if interest rates drop, then my property will sell.
14:01
SPEAKER_00: But this is, you know, and and that's kind of a tough thing to say because then you still have all this inventory out there.
14:08
SPEAKER_00: So, like, is all of it going to be attractive?
14:10
SPEAKER_00: Are there that many buyers out there?
14:11
SPEAKER_00: Or I think we're still gonna be competing.
14:13
SPEAKER_00: But I know that that's kind of like the Hail Mary that everyone's waiting for is interest rates to drop.
14:17
SPEAKER_00: Um, there are buyers out there.
14:19
SPEAKER_00: I think that they're it's it's still a buyer's market and they're able to negotiate price in terms on the prices, on the prices that they are on the units that they want.
14:29
SPEAKER_00: Um, let's get into some of the larger development stuff that you're primarily seeing, mostly South LA.
14:36
SPEAKER_00: Yeah.
14:37
SPEAKER_00: What are the biggest people?
14:38
SPEAKER_00: What are you guys doing?
14:39
SPEAKER_00: I know currently you as a developer are working on 51 units there.
14:44
SPEAKER_00: What was it before?
14:45
SPEAKER_00: Tell us kind of like um what happened specifically in South LA where you're seeing tons of building going on right now.
14:52
SPEAKER_00: More so there than any other city that I've worked in.
14:54
SPEAKER_01: Yeah, I mean, and this is a city of LA program that builds upon state law.
14:59
SPEAKER_01: Um, and so oftentimes the old school developer would go to planning and they would say, Hey, what do you guys want to see here?
15:07
SPEAKER_01: And they have a conversation with their friend John, who they've worked with forever.
15:11
SPEAKER_01: That's the old school developer.
15:12
SPEAKER_01: The new developer now knows this uh stack of different state laws or city programs for density bonuses and rules that you don't always know, you know, what you can build there, or there's options.
15:25
SPEAKER_01: And so the city of LA, um, a city that has to build something like 480,000 units, and they've only done about 15% of that when they're more than halfway there, they they have a problem.
15:37
SPEAKER_01: They knew they needed to come up with something.
15:40
SPEAKER_01: Um, and they a part of those number of units, there's a uh regional housing needs allocation or arena saying this many of these units need to be low income, these need to be moderate income, and these can just be market rate.
15:52
SPEAKER_01: So the city of LA came up with this program called Executive Directive One, which built on some of these state laws that allow for basically unlimited density uh within the constraints of the zoning.
16:05
SPEAKER_01: And then you can do incentives and waivers to change your development standards, which would be like your height, your floor area ratio.
16:12
SPEAKER_01: So if we take uh this South LA project that you're talking about, it was a vacant, dilapidated uh two-on-a-lot duplex.
16:20
SPEAKER_01: Okay.
16:21
SPEAKER_01: Right?
16:22
SPEAKER_01: And you know, on a corner lot um in an inch.
16:26
SPEAKER_01: How big is the lot?
16:27
SPEAKER_01: It's uh it's around 9,000 square feet.
16:29
SPEAKER_01: So it's a good size lot for there, yeah.
16:31
SPEAKER_01: Yeah, I mean, but this there's people with 7,500 square feet.
16:34
SPEAKER_01: I mean, it's just it's the dimensions of the building that you have that doesn't completely change it.
16:40
SPEAKER_01: Um, the zoning here didn't allow for more than two units.
16:45
SPEAKER_01: Um, but we've had found that in every city has uh a general plan land use, which is something additional to zoning that says you can do this many units here.
16:56
SPEAKER_01: And we looked at that and found that this qualifies for this executive directive one, which streamlines uh 100% affordable process uh projects, makes them quicker, and then builds on those state laws to where you can almost build anything that you want um in terms of height or unit count within these constraints.
17:15
SPEAKER_00: So you went from a duplex property that had duplex zoning.
17:20
SPEAKER_00: Yep.
17:20
SPEAKER_00: Um that was dilapidated.
17:22
SPEAKER_00: So I could only imagine how how cheap you bought it.
17:25
SPEAKER_00: Yeah.
17:26
SPEAKER_00: And and right now you're um uh you're you're gonna be building or you are building 51 units.
17:32
SPEAKER_00: Yeah.
17:33
SPEAKER_01: I mean, we're about to sign our construction loan in the next few, like maybe a week or two from now, and we'll break ground on a five-story, 51 unit, 100% affordable uh housing project.
17:45
SPEAKER_01: That is huge.
17:47
SPEAKER_01: And and another thing is many times people think of affordable, they think of tax credits and having to do all this crazy paper.
17:54
SPEAKER_01: This is privately funded, meaning it's my money and investors' money and a construction loan.
17:59
SPEAKER_01: Very much how we do typical uh projects of any kind.
18:04
SPEAKER_00: What's the I mean, for some of our clients, I mean you know, some of our clients, savvy investors, and and they're saying 51 units, bring it on, I can do that.
18:12
SPEAKER_00: Or in fact, I want to learn more about this ED1 program in Los Angeles.
18:18
SPEAKER_00: Um, what's the gain plan for after?
18:22
SPEAKER_00: I guess what's your exit plan?
18:23
SPEAKER_00: Okay, you're gonna build 51 units affordable.
18:26
SPEAKER_00: Does that, when you say affordable, does that mean that you have to keep um the rental values under a certain requirement?
18:34
SPEAKER_00: Is that what that means?
18:35
SPEAKER_01: It is.
18:35
SPEAKER_01: And affordable has a lot of different definitions, but for us, affordable means that there is a deed restriction saying that we can only rent it to this income level at this set rent price.
18:49
SPEAKER_01: And that means that's affordable.
18:50
SPEAKER_01: It's deed restricted and it's not just whatever the market determines.
18:54
SPEAKER_01: So the whole building is set on this deed restriction for uh an AMI area median income of what we can rent them for.
19:02
SPEAKER_00: Um going back to the exit plan, right?
19:04
SPEAKER_00: You build 51 units.
19:06
SPEAKER_00: I mean, are we sitting on this?
19:07
SPEAKER_00: Are we refinancing it?
19:08
SPEAKER_00: Is this a buy?
19:09
SPEAKER_00: You're not flipping it.
19:10
SPEAKER_00: You're not flipping it.
19:11
SPEAKER_01: We're not flipping it.
19:12
SPEAKER_01: That is a bad strategy.
19:13
SPEAKER_01: I don't recommend it.
19:14
SPEAKER_01: And you know, there's a lot of people that are getting hurt from thinking that that was the the case.
19:18
SPEAKER_00: Yeah, yeah, yeah.
19:19
SPEAKER_00: So, so so the goal is the goal to to build it and then refinance, pay off the construction loans.
19:24
SPEAKER_00: That's correct.
19:25
SPEAKER_01: And we're we're looking at a five-year look after the building has been stabilized to say what does the market look like in five years with like a 10-year timeline to say we're gonna sell it.
19:36
SPEAKER_01: Got it.
19:37
SPEAKER_00: So, so probably the exit plan is is uh a 10-year timeline to make a decision, but the goal is not to build it quickly, build it cheap, uh, because we're because we're gonna sell it to someone.
19:48
SPEAKER_00: Sell it to someone and it's their problem.
19:49
SPEAKER_00: It's their problem.
19:50
SPEAKER_00: Yeah.
19:50
SPEAKER_00: And so that's not the case with you guys.
19:52
SPEAKER_00: No.
19:52
SPEAKER_00: What is, I mean, when you're looking at 51 units, what's the property worth when you're done with it?
19:57
SPEAKER_00: Not that you're gonna sell it, but but what are you thinking it's gonna be worth?
20:00
SPEAKER_01: Yeah, I mean, and and there is uh a substantial return.
20:04
SPEAKER_01: Yeah.
20:04
SPEAKER_01: Uh even at the five-year mark and then 10-year mark, it's even better at the five year, but we have to see what the market looks like compared to any other development uh project that we're looking at, even just regular market rate.
20:17
SPEAKER_02: Yeah.
20:18
SPEAKER_01: Um, you know, to get into these exact specifics, I mean, there is close to a high 7% yield to triggering like almost an 8% yield of what we'll be returning versus our costs.
20:31
SPEAKER_00: Um, when you're saying that for the people that are losing because they look for a quick flip, yeah, why is it just maybe make some comments on why is it that maybe they've made an error and and that stuff.
20:42
SPEAKER_00: I mean, so Andrew is is big on X, so Twitter, and so he's out there posting a lot, but but from all the social media platforms, I mean, outside of YouTube, which is a great long-form educational content.
20:55
SPEAKER_00: So I appreciate our viewers.
20:57
SPEAKER_00: X to me is such a great place.
20:59
SPEAKER_00: Like I spend more time on X learning from people like Andrew and people who are out there saying, I just built this.
21:05
SPEAKER_00: Here's my here's the list of all my cost, and this is how long it took me, and this is what I learned.
21:10
SPEAKER_00: It's really impressive.
21:11
SPEAKER_00: It's really impressive, like how much value people are putting out there.
21:15
SPEAKER_00: And they're not even putting it out there like now buy this.
21:17
SPEAKER_00: They're simply saying, This is what we did.
21:19
SPEAKER_00: Yeah.
21:19
SPEAKER_00: And so I've been seeing that some people are getting their butt kicks.
21:23
SPEAKER_00: Absolutely.
21:23
SPEAKER_00: And what is it that went wrong?
21:25
SPEAKER_01: Uh I would say that it was extremely enticing that we can get.
21:30
SPEAKER_01: Early on.
21:30
SPEAKER_01: Early on, early on was enticing.
21:32
SPEAKER_01: Now enticing that I can get a big project of, you know, it doesn't matter if it was 50 units or a thousand units entitled and all ready to build in nine months.
21:43
SPEAKER_01: It's definitely achievable.
21:44
SPEAKER_01: That's very exciting.
21:46
SPEAKER_01: It used to be two, three years.
21:48
SPEAKER_01: And that's not that wasn't the case for this because it was expedite and streamlined.
21:52
SPEAKER_01: But I think what many people didn't think about is first, can I get the financing for it if I'm going to build it, right?
21:58
SPEAKER_01: So, you know, a 200.
22:00
SPEAKER_01: Unit project could be$50 million.
22:03
SPEAKER_01: Can you sign on the debt for$50 million?
22:06
SPEAKER_01: Can you sign the personal guarantee that they take everything when you mess up?
22:10
SPEAKER_01: Do you have that liquidity?
22:12
SPEAKER_01: Do you know people that you can get the equity from for that 30% if you get a 70% LTC loan?
22:19
SPEAKER_01: Do you have the 30%?
22:20
SPEAKER_01: Do you even know people with this type of liquidity?
22:23
SPEAKER_01: Yeah.
22:23
SPEAKER_01: I think many people didn't even think about that.
22:25
SPEAKER_01: What they thought was is I'm going to get this entitled, and there's going to be a bunch of people that want to pay for my box that I stuffed as many units in here as possible and didn't even think about it.
22:38
SPEAKER_01: Was it constructible at the right price?
22:40
SPEAKER_01: Is anybody going to want to live here?
22:43
SPEAKER_01: And there was this excitement of like, let's get whatever approved as fast as possible.
22:47
SPEAKER_01: And then all these people are going to want to just take it from me and buy it.
22:51
SPEAKER_01: And to me, I'm like, if it's that easy, why would someone want to buy your plans when we can do ours?
22:56
SPEAKER_01: Right.
22:56
SPEAKER_01: And find the right property and build it the way we wanted to.
22:59
SPEAKER_01: So there was this exit idea that we're just going to flip this paper to someone and they're going to pay a lot.
23:06
SPEAKER_01: And some of the first cops were were actually pretty, pretty solid.
23:10
SPEAKER_01: And there were people who did well on that.
23:11
SPEAKER_01: Okay.
23:12
SPEAKER_01: And that was that was people that wanted to get in this space and they wanted to just build something and see.
23:17
SPEAKER_01: But there was very few that really happened.
23:20
SPEAKER_01: And it started to turn into a race to the bottom.
23:23
SPEAKER_01: Is it even sometimes it's worth less than what you pay for to even get the plans ready because you just like what you designed wasn't good, the site wasn't good.
23:31
SPEAKER_01: Uh just all the things that we think of with development, like that, some reason that went out the window because it was faster.
23:38
SPEAKER_01: Like none of that mattered anymore.
23:40
SPEAKER_01: You know, it's interesting.
23:41
SPEAKER_00: Typically, when someone buys a site and they get it entitled, we kind of know like that's someone will buy it because you've done the heavy lifting.
23:48
SPEAKER_00: Right.
23:49
SPEAKER_00: But what you're what you're saying is the heavy lifting, that time frame was only nine months.
23:54
SPEAKER_00: So someone else could just go do it on their own.
23:56
SPEAKER_00: And why would they buy your property?
23:58
SPEAKER_00: Right.
23:59
SPEAKER_00: And so what is happening to those investors right now who who put themselves in that situation?
24:05
SPEAKER_00: Either they started building it and it's no longer what they thought it was going to be worth, or maybe they got it entitled and now they're stuck with it.
24:11
SPEAKER_00: No one wants to buy this entitled asset from them.
24:13
SPEAKER_00: Like what are they doing?
24:14
SPEAKER_00: I mean, I'm sure you're talking to them, or they're calling you saying, Andrew, buy it from me.
24:18
SPEAKER_01: Yeah, I mean, I have looked, I probably looked at everybody's plans and passed on them.
24:23
SPEAKER_01: Okay.
24:23
SPEAKER_01: Um, I I think the first option, there's very few that are are building it and then they're worried about it.
24:28
SPEAKER_01: Because if you get to that point, it makes sense and you're gonna make it to that point.
24:32
SPEAKER_01: Um, what your exit looks like is is a crystal wall because there isn't really a market for the end buyers.
24:39
SPEAKER_01: Yeah.
24:40
SPEAKER_01: Like, you know, people buy apartment buildings, that's fine.
24:42
SPEAKER_01: But is there a market for 100% affordable buyers?
24:46
SPEAKER_02: Yeah.
24:46
SPEAKER_01: And that really, because this is a new housing product, that destiny isn't fully developed yet.
24:51
SPEAKER_01: That's why we do that longer time frame to have it.
24:53
SPEAKER_01: And then the people who are wanting to sell it entitled, they're they're having to compete against all the other people that are in that same situation.
25:01
SPEAKER_01: They're either, you know, putting it for sale or just uh like trying to see if anyone wants it, or the segments, they're looking for other opportunities, whether it's new state laws or uh in city of LA, there's the citywide housing incentive program chip.
25:16
SPEAKER_01: So they're looking at these new things to say, okay, can we go to the new thing and will that be better?
25:20
SPEAKER_00: And will that be better?
25:21
SPEAKER_00: Got it.
25:22
SPEAKER_00: So kind of on a smaller scale, uh, last year, someone contacted me and said, Hey, I have a duplex, uh, a duplex, actually, actually, two homes on a lot.
25:30
SPEAKER_00: South LA.
25:31
SPEAKER_00: Um, I have the plans um ready to be issued.
25:35
SPEAKER_00: You call they call them RTI.
25:36
SPEAKER_00: So this person went through all the the work.
25:39
SPEAKER_00: Now, I think this was before ED1.
25:41
SPEAKER_00: And so the deal got better, but so he got a five-unit building approved for his site.
25:46
SPEAKER_00: It was originally a duplex.
25:48
SPEAKER_00: I mean, you got 51 unit units on your site.
25:50
SPEAKER_00: Okay, he only got five.
25:51
SPEAKER_00: And we thought, okay, yeah, someone's gonna want to buy this, go do cash for keys with the existing tenants, and they're gonna build it.
25:58
SPEAKER_00: We couldn't sell it six months later.
26:00
SPEAKER_00: The problem was they weren't able to uh to have the right conversations with the existing tenants to believe that they would ever leave because they may they may never leave.
26:09
SPEAKER_00: Um, and no one, so we ended up selling it to an individual who was gonna keep it a duplex.
26:16
SPEAKER_00: He said, Thanks for the blueprints.
26:18
SPEAKER_00: He threw them in the trash.
26:18
SPEAKER_00: He's like, I'm not gonna build five units.
26:20
SPEAKER_00: It wasn't so this our client went through this efforts of during that time, it took longer than nine months because this was before that law had changed.
26:28
SPEAKER_00: So years of getting to that point, he thought he had a little bit of uh profit there for him.
26:33
SPEAKER_00: Turns out someone didn't even care about the plans, and that's on a small scale.
26:37
SPEAKER_00: I mean, there's other people that are building you know, entitled to 100 plus units, and nothing, you know, you you spent all this money, they call it soft cost, and nothing's gonna come of it.
26:48
SPEAKER_01: But my advice is even if you're you may want to exit before you build it, always design and think like you're going all the way to the end because the person who may buy that is going to take it to the end.
27:00
SPEAKER_01: So don't think you're going to design something that isn't go to the end because you don't think that's the path.
27:05
SPEAKER_01: Everything you buy and you design, think all the way to the finish line because it may have to be you that does it.
27:11
SPEAKER_01: And if it doesn't work for you, why is it gonna work for me?
27:15
SPEAKER_00: No, you're right.
27:16
SPEAKER_00: Um, uh, Andrew, so one thing I learned about you, and it was interesting because I didn't know this.
27:20
SPEAKER_00: Um we worked together.
27:23
SPEAKER_00: I didn't realize how how involved you were in housing advocacy.
27:27
SPEAKER_00: Yeah.
27:28
SPEAKER_00: Yeah, I didn't realize you're out there uh trying to get laws passed.
27:33
SPEAKER_00: Why don't you tell us um kind of highlighting what it is you're working on and like where's that passion come from?
27:39
SPEAKER_02: Yeah.
27:40
SPEAKER_01: Um I I was uh you know activated uh when there was a a state bill that I looked, because every year, uh something like January or February, the new bills for the year get released.
27:51
SPEAKER_01: And I looked at all of them and I found one that I thought was really exciting.
27:54
SPEAKER_01: Um and this was when I was first getting into learning about state laws and how it affects, and it was the ability to convert vacant retail into housing.
28:03
SPEAKER_01: And uh there's places everywhere that it just can't lease or was required to be mixed use and it didn't make sense.
28:09
SPEAKER_01: And that bill, um, as it was going through the process, just disappeared.
28:14
SPEAKER_01: And I told myself, like, I can't not be involved in this anymore.
28:18
SPEAKER_01: Like, if my destiny and the what I want to do is on this, I can't just wait for somebody else, whoever they are, or nobody.
28:25
SPEAKER_01: And that was the reason why it went away because no one thought it was important, because no one was showing up or talking about it.
28:29
SPEAKER_01: So I I said, There's no more.
28:32
SPEAKER_01: I want to be involved in this process.
28:34
SPEAKER_00: So, so I, you know, I think I'm sure some of our viewers can relate.
28:38
SPEAKER_00: So, what you had this calling or this urge to do something.
28:43
SPEAKER_00: What was your next step?
28:44
SPEAKER_00: What did you do?
28:45
SPEAKER_01: Yeah, so I I joined groups.
28:47
SPEAKER_01: I joined uh a federal group, a state level group, and then a local group.
28:51
SPEAKER_01: So there's groups like Abundant Housing, um, California Yimbi, um, Yimbi Los Angeles, and there's these groups that propose legislation to fix problems, and then they go with an assembly member, a senator to run a bill.
29:05
SPEAKER_01: Okay.
29:06
SPEAKER_01: And so that was like the path of like join these groups and understand what they're doing, because they have a package every year on what they're doing, and you can sign up for like California Yimbi has a lobby day.
29:18
SPEAKER_01: And a group of people, hundreds of people, go to Sacramento and talk to their legislator about whatever these bills are.
29:24
SPEAKER_01: And sometimes they're not even real estate professionals, they're just people that want housing.
29:29
SPEAKER_01: Yeah.
29:29
SPEAKER_01: And they show up and they get to talk to their assembly member or their center and say, look, I live in X and X Place and it's not affordable.
29:36
SPEAKER_01: My kids can't afford to live here.
29:37
SPEAKER_01: There's this passion behind it.
29:39
SPEAKER_01: Right.
29:39
SPEAKER_01: And they get to talk about why it's important because there is two sides.
29:44
SPEAKER_01: There's people who also want no change anywhere, and my the life I live should always be there.
29:49
SPEAKER_01: I made it.
29:49
SPEAKER_01: I bought my house with a low tax basis, and like it sucks for you guys, you know.
29:53
SPEAKER_01: Right.
29:54
SPEAKER_00: Okay.
29:54
SPEAKER_01: And there's the opposite side that's thinking of the future.
29:57
SPEAKER_01: And so you have to balance out those voices so that people who are voting on this, meaning assembly member centers, hear from both sides.
30:04
SPEAKER_01: So hearing from one side.
30:06
SPEAKER_00: So, were you able to revitalize the the convert the retail into housing or or did you introduce something new?
30:13
SPEAKER_00: We we did okay slightly.
30:14
SPEAKER_01: What we did is we did it by definition.
30:17
SPEAKER_00: Okay.
30:17
SPEAKER_01: So instead of needing it to be commercial, because the reason why they didn't want that, is because they don't want to turn a main street into like a residential street, like losing that main street feel.
30:28
SPEAKER_01: But what we did is we defined it as non-livable space, meaning which is defined as like you know, a kitchen, a bathroom, like a unit can be converted.
30:37
SPEAKER_01: So we found a way that did what we wanted, but also like wasn't as direct.
30:43
SPEAKER_00: But if it's non-livable space, someone's gonna say, hey, but then who do you expect to occupy the space?
30:47
SPEAKER_01: So yeah, non-livable space can now be converted into ADS.
30:51
SPEAKER_01: Oh, got it, got it.
30:52
SPEAKER_01: So we didn't call it commercial because that word was the truth.
30:55
SPEAKER_01: It's not politics, right?
30:56
SPEAKER_01: It's all politics and what the negotiation and what could sell.
31:00
SPEAKER_01: But the the selling point, no one was scared of non-livable space being converted.
31:04
SPEAKER_01: They were worried about Main Street.
31:06
SPEAKER_01: So it's understanding what the resistance and the hesitance is and still getting to that objective.
31:11
SPEAKER_00: What what are you working on right now at that level that you're that you're trying to and it could, I mean, are you working on multiple things or there's one like this is the one, this is the one that I think is the most important?
31:21
SPEAKER_00: There's a there's multiple ones.
31:22
SPEAKER_01: Got it.
31:23
SPEAKER_01: Okay.
31:23
SPEAKER_01: The big the biggest one right now and um is SB79.
31:27
SPEAKER_01: Okay.
31:28
SPEAKER_01: Um, which would allow any property within a half mile of a high quality transit, meaning light rail or a rapid bus.
31:38
SPEAKER_01: So not just like your regular bus station.
31:40
SPEAKER_01: This is like real infrastructure we spent millions or billions of dollars to build that we can allow for denser housing up to seven or eight stories.
31:49
SPEAKER_00: Um and that's different from the other that that's different from ED1, that's different than all that stuff.
31:53
SPEAKER_00: This is statewide.
31:53
SPEAKER_00: Okay, this is statewide.
31:55
SPEAKER_00: So this would, would this be, you know, so ED1 was a way for it to be expedited.
31:59
SPEAKER_00: What you're proposing, would that also be expedited?
32:01
SPEAKER_01: It would be expedited in the way that it is required by state law.
32:06
SPEAKER_01: So local governments can't just say, no, I don't want to do this.
32:10
SPEAKER_01: State law has said, look, we built these train spots, we have a housing crisis.
32:15
SPEAKER_01: Like, if you're gonna build housing, uh wouldn't you want to build it next to transit?
32:19
SPEAKER_01: Like, where are we gonna put it?
32:20
SPEAKER_01: We really have to think we need housing.
32:21
SPEAKER_01: That's not a question.
32:22
SPEAKER_02: Right.
32:23
SPEAKER_01: Where do we put it?
32:23
SPEAKER_01: And what this bill does is it gives us a location that makes sense because you want denser housing, people are worried about traffic, they're worried about people.
32:32
SPEAKER_01: Build it next to train stations, right?
32:34
SPEAKER_01: Yeah, you know, a lot there, and look, I get it, single family homes are amazing.
32:40
SPEAKER_01: And I grew up in one.
32:41
SPEAKER_01: And we're not saying if you have one, it's illegal.
32:43
SPEAKER_01: We're just saying you have the option now, if you're near a transit line, to build something where people that live there would go use it.
32:49
SPEAKER_01: And this is really one of the biggest fights that we have right now.
32:52
SPEAKER_01: Interesting.
32:53
SPEAKER_01: Is this bill?
32:54
SPEAKER_01: That's that's one of the ones that uh we're talking about a lot.
32:58
SPEAKER_01: There's also a third-party permitting.
33:01
SPEAKER_01: So if a city can't review your plans in a right amount of time, that you can hire someone to review them.
33:07
SPEAKER_01: Same thing with inspections.
33:08
SPEAKER_01: Some cities just they don't have enough staff.
33:12
SPEAKER_01: And it it's not even necessarily the city's fault.
33:15
SPEAKER_01: You can't just hire and fire government people.
33:18
SPEAKER_01: So if and applications aren't just like straight.
33:21
SPEAKER_01: So one day there could be one application, next week there could be a hundred.
33:24
SPEAKER_01: But you can't just hire and fire people on the demand.
33:26
SPEAKER_01: Government doesn't work that way.
33:27
SPEAKER_02: Right.
33:28
SPEAKER_01: So the idea is to allow for the private industry, third parties that are just as qualified, the same people really, right?
33:35
SPEAKER_01: Um, to review these because then they can be on demand and go.
33:39
SPEAKER_00: And because they're not employed, it's probably easier to let them go.
33:44
SPEAKER_00: Absolutely.
33:44
SPEAKER_00: It's easier to let them go and they could bring them in as they need them.
33:47
SPEAKER_00: Absolutely.
33:47
SPEAKER_00: They could expedite building, which guess what?
33:50
SPEAKER_00: The state is wanting them to build.
33:51
SPEAKER_00: That's all a lot of the stuff is adding up.
33:54
SPEAKER_00: Um, Andrew, let's talk about.
33:55
SPEAKER_00: Well, there are a couple of different things that could go with you.
33:57
SPEAKER_00: Uh, construction cost, and I see you posting things on um, listen, we had some bad fires recently.
34:04
SPEAKER_00: Yeah.
34:05
SPEAKER_00: Talk to us about, I mean, you're you're doing some stuff in Altadena.
34:09
SPEAKER_00: Yeah.
34:09
SPEAKER_00: Are you doing anything in the Palisades right now?
34:12
SPEAKER_01: Not, I'm not.
34:13
SPEAKER_01: And I uh just to be very transparent, I I don't know what someone that builds a six million dollar, ten million dollar house wants.
34:20
SPEAKER_01: I'd be like, Do you want a wine fridge?
34:22
SPEAKER_01: I just I don't know that I grew up in Joshua Tree, a single mom, like I just don't know what you would want.
34:28
SPEAKER_01: And and I'm in Pasadena, so Altadena is like my family.
34:32
SPEAKER_01: These are my people.
34:32
SPEAKER_01: Got it.
34:33
SPEAKER_01: And and they uh they don't necessarily have the same amount of funding and they need help like right now.
34:42
SPEAKER_01: Um, whereas, and this isn't obviously the case for everyone, but people in the Palisades have a little bit more liquidity or more options, and this is not like they may be able to go to Orange County or they may be able to go somewhere else um and wait a little bit longer.
34:56
SPEAKER_01: People in Altadena are are not having that option.
34:59
SPEAKER_01: So I think it's a best use of my mission, my time, my skill to help that area.
35:03
SPEAKER_00: What are you doing there?
35:04
SPEAKER_00: Because I did see some stuff.
35:05
SPEAKER_00: I mean, it looked like you're building some some rear houses right now, or maybe some other like what's what's the goal with what you're doing there?
35:11
SPEAKER_01: Yeah, so what I realized is uh is most people don't build a house.
35:16
SPEAKER_01: They go and they buy a house, and that's what it was.
35:19
SPEAKER_01: The floor plan was what it was.
35:21
SPEAKER_01: They didn't design it, they just bought it.
35:22
SPEAKER_01: So people don't even know where to start.
35:24
SPEAKER_01: They'll think, I need a contractor.
35:26
SPEAKER_01: Uh, and then they get a bid for what?
35:28
SPEAKER_01: We don't know what you're even gonna build.
35:30
SPEAKER_01: So that's also very discouraging for people to get a price per square foot on building we don't even know.
35:36
SPEAKER_01: So it's educating people that you start with plans, which we do, we help them with plans.
35:41
SPEAKER_01: Um, we work with LA County, so we know how to get them approved fairly quickly, and then also to give them fair pricing uh because we live here and work here, and we're not our subcontractors work here.
35:53
SPEAKER_01: So I'm not saying everybody who's charging 500 to 700 square foot is are greedy, terrible people.
36:00
SPEAKER_01: They may not even have the relationships with people to get fair pricing.
36:04
SPEAKER_01: So because we live here and we have uh the relationships with subcontractors in here, we're we're closer to$280 to$300 a square foot on what we're building.
36:14
SPEAKER_01: And it's not always the best metric because you know you might have patios that cost less than the actual house, but that number, the 280, 300, is um when I look at the bids I compete against, I could be at 800 and the next guy's a million three almost every time.
36:31
SPEAKER_01: Well, it's a huge difference.
36:34
SPEAKER_00: Um, let's talk about uh recently you were in the LA Times.
36:39
SPEAKER_00: Yes.
36:40
SPEAKER_00: Um talk to us about that article.
36:41
SPEAKER_00: How did that come about?
36:42
SPEAKER_00: It's it's not every day that uh I think it's neat.
36:45
SPEAKER_00: You know, I I love reading in the Times, and so be able, you know, to be able to catch your article, I thought I thought was pretty impressive.
36:50
SPEAKER_00: How did that happen?
36:51
SPEAKER_00: Um, you know, obviously you're out there doing a lot of a lot of amazing things.
36:56
SPEAKER_00: So talk to us about that article.
36:57
SPEAKER_01: Yeah, I and also that's like how it comes about.
37:00
SPEAKER_01: I I think there's like paid media and things like that.
37:02
SPEAKER_01: This is just being out there and giving information to the people who just want to know what's happening.
37:08
SPEAKER_01: And that's one thing I've always been like when you're talking about X, it's like just put the information out there.
37:12
SPEAKER_01: I'm not selling it.
37:13
SPEAKER_01: It's not like to buy my course or to even hire me.
37:15
SPEAKER_01: It's just like there's enough out there for everybody.
37:18
SPEAKER_01: And so uh recently, I think this was my third LA Times article, but this one really meant a lot because it's our our affordable housing project in uh South London.
37:28
SPEAKER_01: But it's also was about a gentleman named Adam Miller, um, who who uh he built an education platform and sold it to Amazon and created a substantial amount of wealth for himself.
37:40
SPEAKER_01: But his thing is he wants to give back, he wants to build affordable housing.
37:45
SPEAKER_01: And so uh this project we're doing in South LA is one of his first investments into this fund that he wants to do.
37:52
SPEAKER_01: And so it's it's a uh a person who, a very impressive person, um, has done very well with himself, but like trusting in our team to lead his fund because he needs to also have successful projects to raise more money.
38:07
SPEAKER_01: Even if you're a rich guy, that doesn't mean more people are gonna give you money if you don't know what you're doing.
38:11
SPEAKER_01: Right.
38:11
SPEAKER_01: And so he invested in our project.
38:14
SPEAKER_01: And this is his first project.
38:15
SPEAKER_00: This is so that so he this is his baby.
38:17
SPEAKER_00: He needs this one to be a success.
38:19
SPEAKER_01: Yeah.
38:19
SPEAKER_01: Okay.
38:19
SPEAKER_01: And so, you know, it's a it's a lot, but it's it's it's it's a great, it is a great product and a story as well.
38:26
SPEAKER_01: A vacant building, affordable housing.
38:29
SPEAKER_01: Um, there's a lot to it, and we're really happy to be a part of it.
38:32
SPEAKER_01: So that's what that that recent story was.
38:35
SPEAKER_00: That is great.
38:36
SPEAKER_00: Um, Andrew, so you're a wealth of information.
38:39
SPEAKER_00: There is a lot that you know about when it comes to adding value, ADUs, highest and best use of a of a property.
38:47
SPEAKER_00: Um, are are you utilizing AI for any of this stuff?
38:50
SPEAKER_00: Is is AI helping you with some of these things, or or I'm just I'm just curious.
38:54
SPEAKER_00: It's helping me write emails.
38:55
SPEAKER_01: Okay.
38:56
SPEAKER_01: And I know that I know that's like a simple thing, but it I used to take because some of my emails would be arguments with cities where I have to quote uh code sections and it gave very detailed.
39:05
SPEAKER_01: And I I never want to be a perfectionist, but I know sometimes you get one shot at this.
39:10
SPEAKER_01: Yeah.
39:10
SPEAKER_01: And so uh what used to take me three hours now takes me two to three minutes.
39:15
SPEAKER_01: Okay.
39:15
SPEAKER_01: And that's just from uploading the code sections that you can get from the government or whatever.
39:21
SPEAKER_00: So you're grabbing the codes that that they printed, you're you're you're uploading it to a chat GPT or one of those, and you're saying, use this code to help me write this argument.
39:31
SPEAKER_00: Correct.
39:32
SPEAKER_00: How do you prompt it?
39:32
SPEAKER_00: What is the prompt?
39:33
SPEAKER_00: Yeah.
39:33
SPEAKER_01: More or less.
39:34
SPEAKER_01: You know, and you have to somewhat know, like, are you using section 66323 or whatever section is, and just saying, how does this email where they're saying no, where is the logic that that's not correct because this is what it says?
39:46
SPEAKER_02: Yeah.
39:47
SPEAKER_01: And so, yes, you have to somewhat know what you're talking about, and that I think that's with all AI, right?
39:52
SPEAKER_01: And saying, like, here's the email, I'm saying, here's kind of how I want to respond to it based on this.
39:57
SPEAKER_01: Put that together.
39:58
SPEAKER_01: But on the flip side, you could also use that to say, because these code sections say that, could I do this for this project?
40:03
SPEAKER_01: Does it does it work here?
40:05
SPEAKER_01: And you could start using it in both ways.
40:07
SPEAKER_01: Like just the main thing for me was like we're limited on time, right?
40:10
SPEAKER_01: We're doing so much.
40:11
SPEAKER_01: So it took what would take me three hours and a lot of stress because I wanted to do it right and turn it into minutes.
40:17
SPEAKER_01: And I know like writing is you know, sometimes I feel like I'm losing the humanity of writing, but like that's uh I mean me in person, like my emails are not like you're gonna know me.
40:26
SPEAKER_00: Right.
40:27
SPEAKER_00: Um, I would say on X, uh AI is not writing his X.
40:30
SPEAKER_00: I think it's all Andrew.
40:31
SPEAKER_00: And so, and so um Andrew, um, if someone wants to contact you or wants to work with you, who is it you're you're uh in a position to serve?
40:41
SPEAKER_00: Like if you're is for we have tons of viewers, uh loyal followers, like if someone owns some property, like who is it you want to hear from that that you think you're you're in a position to best serve?
40:52
SPEAKER_01: Yeah, I I would say you know, multifamily homeowners that are exploring adding ADUs is probably the easiest and best to help them in a quickly manner, because it's in to me, at least it's so simple of what you can do.
41:04
SPEAKER_01: When it comes to like a ground up development, like people would be like, I own a site, what can I do there?
41:09
SPEAKER_01: And there's a million things you can do there, and I don't know how much money you have, I don't know any of this.
41:13
SPEAKER_01: So that's a lot more difficult for someone to just and it takes a lot of time too.
41:17
SPEAKER_01: And there's you know, there's very it's it's not just something I could spit out and say, you're gonna do a 51-unit building here and you're gonna call Adam for the capital and this guy for the debt.
41:26
SPEAKER_01: And it's not that easy.
41:27
SPEAKER_01: It's not okay, it's not okay.
41:30
SPEAKER_01: So so that part, but like, you know, people who are interested in maybe a joint venture, like you own some land, you're like, what can I do there?
41:37
SPEAKER_01: But I want to give something too, like that goes a long way.
41:40
SPEAKER_01: The the problem is there's like an expectation of just like tell me what I can do and go from there.
41:45
SPEAKER_01: And it's like it's it's very hard to like do all these things and to be able to just give all that away, not even just for money, but like time-wise.
41:52
SPEAKER_01: Right.
41:53
SPEAKER_01: Um, so I would say that those two are probably like you know, someone who would want to work with me.
41:58
SPEAKER_00: And would you uh we're gonna have all uh Andrew's information down below, his website, his email address, uh phone number if he allows it.
42:05
SPEAKER_00: If not, what is the best way that you want to be contacted?
42:07
SPEAKER_00: Is email, a text, uh, the what's best for you?
42:10
SPEAKER_00: You know, email and text is good.
42:11
SPEAKER_01: Uh also follow, you know, X, like you said, Instagram as well, which is Andrew R Slocum.
42:17
SPEAKER_01: But the reason why like I I think that is out there is because like if you love cats, there's a lot of that.
42:22
SPEAKER_01: But I will post my emails of what I write to cities.
42:25
SPEAKER_01: Okay.
42:25
SPEAKER_01: And you can exactly see like pushback because, like you said, you go to the city and they might say no, but one of our company ethos is no doesn't mean no.
42:35
SPEAKER_01: Right.
42:35
SPEAKER_00: Yes, yes.
42:36
SPEAKER_00: It means you got to show up a second time and you'll get a second person who possibly, I mean, it's sometimes it's that simple.
42:42
SPEAKER_00: I mean, I get it.
42:43
SPEAKER_00: Andrew is is is having to research a lot more to be able to get to the yes point.
42:47
SPEAKER_00: But sometimes people get one no from one individual and it's a large city, that the next person would have said yes, or let me guide you differently.
42:55
SPEAKER_00: It's it's it's unfortunate that if you don't do a lot of work with the city, one no is heartbreaking and you you don't go back.
43:03
SPEAKER_00: And I think what I think what what I've seen through the years of working, uh especially with the city of Long Beach, is you got to just show up the next day.
43:10
SPEAKER_01: And you can't expect them to know the rules.
43:12
SPEAKER_01: I thought, I thought you go to the city and they should know the rules.
43:15
SPEAKER_01: It's like, no.
43:16
SPEAKER_01: In fact, I'm the one who has to teach many cities the rules because there's so many being shoved down that throat.
43:21
SPEAKER_01: And I've sometimes feel bad, there's not an education component for them.
43:25
SPEAKER_01: So, yes, you maybe get a no, but you could maybe look at some of the ADU rules or ED1 rules and say, what about this?
43:32
SPEAKER_01: And they go, Oh, yeah, you could do this.
43:35
SPEAKER_01: Yeah, because there's so many options of what you can do.
43:38
SPEAKER_01: Someone's not just uh for whatever reason, the guy on the other side isn't gonna be like, okay, here's how you make the most money.
43:44
SPEAKER_01: That's just not like that's just not the way they think or they work.
43:47
SPEAKER_00: It's it's not their job to know the highest and best use.
43:51
SPEAKER_00: And it's not their job to make you money.
43:54
SPEAKER_00: It's not, it's not their job.
43:56
SPEAKER_00: In fact, their job is easiest if they say no and you go away.
43:59
SPEAKER_00: The easiest, yeah.
44:00
SPEAKER_00: That's the easiest way because then it's less headache, they don't have to review and argue with you, all kinds of stuff.
44:04
SPEAKER_00: But um, it is their job to listen to you, to look at your ideas, to look at your plans, to figure out how much housing can I get here because every city and every city is uh has a problem right now at the state level that they need to create more housing.
44:19
SPEAKER_00: And so with that, uh Andrew, I'm gonna give you the final say.
44:23
SPEAKER_00: Let us know if there's anything else you want to cover.
44:25
SPEAKER_01: Yeah, I mean, for me, a lot of this speaking to people is to activate people to be advocates.
44:31
SPEAKER_01: Okay.
44:32
SPEAKER_01: Because we use a lot of these rules, the ADU laws, and we love it and we make money off of it.
44:38
SPEAKER_01: But we also have to participate in those conversations to make it better for each year, talk about problems and show up.
44:44
SPEAKER_01: Uh, show up at city council meetings and support housing projects when they're talking about are we gonna support SB9 or we're gonna do this?
44:53
SPEAKER_01: I know it's not fun, it's not sexy, you sit there for a little bit, but uh showing up to whatever it is that you are interested in in a pro housing or a pro-operator, you know, rent control rules, all of these things, they need to hear from both sides because the people who are sometimes speaking about it don't necessarily live in this world.
45:14
SPEAKER_01: We do.
45:14
SPEAKER_01: Like as an operator, you are the best person to talk about it because you're living it.
45:18
SPEAKER_01: But if you don't show up, the city council member who is writing the ordinance or approving it, or the state legislator, they don't do this.
45:25
SPEAKER_01: They need to hear from you.
45:27
SPEAKER_01: And you have a voice, and it's very important.
45:30
SPEAKER_01: And I learned when you show up and I see a bill change because I went and did it, like, and I'm no one, I'm no one special.
45:37
SPEAKER_01: Everybody can do the same thing that it's impactful and it helps.
45:40
SPEAKER_01: So I think you know, finding what your passion is and being involved in an advocacy way, because it's going to improve your business, or if you do nothing, it's really going to hurt your business.
45:52
SPEAKER_00: Andrew, thank you, thank you so much uh for coming in for all that you're doing.
45:58
SPEAKER_00: Um, folks, if you enjoyed this interview, make sure to like, comment, and subscribe.
46:02
SPEAKER_00: Send us your messages below.
46:04
SPEAKER_00: I want to know what you guys thought of Andrew.
46:05
SPEAKER_00: We'll have them back because every year laws are going to be changing.
46:08
SPEAKER_00: And we want to hear how are people creating wealth?
46:12
SPEAKER_00: How are we able to create more housing and make Southern California a place where people want to uh be able to live and afford at the end of the day?
46:20
SPEAKER_00: So that's all for now.
46:21
SPEAKER_00: Until next time.