Speaker 1: 0:20

Well, hello everybody. Ryan Garland here, founder and chairman of Paradigm. We have Mike Reveley, our CEO today, and I want to thank everybody because it looks like we have quite a bit that are already logged on for joining us today. Make sure those arms stay steady. There we go, joe, you got to do your job, thanks, buddy. So, but thank you guys for joining us today.

Speaker 1: 0:37

We have, you know, we're getting a lot of requests to talk about kind of the exit strategy for investors and kind of what seems to be common, what a lot of people have questions on. So we felt that it was necessary for us to kind of talk on that. I think you guys will appreciate kind of where we're taking it today. Obviously, mike from his background on Wall Street and kind of really working with larger institutions and how they position themselves for exits, because it's always about how to not only make money but retain the wealth that you've created. So Mike has just got a ton of knowledge on how a lot of guys are maneuvering around for taxes.

Speaker 1: 1:12

But really just talk about our experience with what's happening with the barn caves, what's happening right now with Lake Havasu and just kind of paradigm in general. So we again, we thank you guys for joining us today. Mike, thank you, buddy, for joining us as well. And what would you like to talk about first? You want to talk a little bit about all the things we have going on, just so we can kind of give more of a background for some of the new participants.

Speaker 2: 1:31

Right.

Speaker 2: 1:32

I think that's great because I'm on the front lines with a lot of our investor calls and I think the one thing that they're surprised because they're obviously getting information on our current project, the Barncase but that's really just one of many that we have going on here in Havasu and really, you know, in other parts of the country and I think they're surprised by the sort of the depth and breadth of what we're doing overall as Paradigm and where that vision takes us from here, right. So investors, they want to know what you're doing now, of course, but they also want to buy into what you're going to do in the future. And I think if you look at the barn case project, it's very unique, obviously, and people buy into that sort of unique nature of that particular development. But there's a genesis story to that right and that the genesis is here in Lake Havasu, where you really got your start as paradigm development right here in Havasu and we're wrapping up, you know 200,000 square foot development of, you know, man caves here in Havasu. So I think that genesis story is something that I think people need to understand more about paradigm. We just keep, we need to hit that a little bit let people understand exactly what we're doing here and how that translates to where we're going to be over the next three to five years and how we're going to, essentially, from an investor standpoint, make sure that we're executing on that vision. And I think that's fundamental.

Speaker 2: 2:52

I think the paradigm it's fundamental to understanding who we are as a company and then our projects and, from an investor standpoint, what the endpoint is right. Because everything that we're doing in paradigm and I think this is important is that the timeframes that we're looking at from an investor standpoint are short. They're short duration assets. They're one to four years right. So if you're going to lock money, what we typically see is people that are coming onto the platform begin to roll over to that next project and that next project. So giving people, I think, a sense of not only what we're doing here in Havasu but how that translates to other markets is important. So I'd love to start there. Man, I think you going through what we're doing here in Havasu, how you got into Havasu and why you think it's a market that, quite frankly, we could hover here in the next 10 years and not satiate the demand that we see for for what paradigm is building. So I I definitely love to start there.

Speaker 1: 3:51

All right. So you know, I have the philosophy, which is kind of nice because one of my mentors, his name is Dan Stevenson, he owns a Europa village and has owned a company called Rancon group and has been in Temecula for 70 years and he was kind of there since the 70s and so he had mentioned, you know, when he went out there he just saw the opportunity to basically build an empire there and really build some wealth for not only himself but his clients, and so he just kind of stuck with inside that geographical area and really has done amazing jobs by the best reputation in the area for development. So I kind of have that same philosophy and I think really it stems from just being a kid and coming out here, you know, and then my father retiring and moving out here and so what has happened since the pandemic? That's really really started to kind of open up our eyes as far as the migration and really watching the data of everyone's spending habits and so forth.

Speaker 1: 4:39

And right now in Lake Havasu, not only we have 225,000 square feet, which is Paradigm Storage Barn Caves is roughly 530,000 square feet. And to give you guys an idea, in this little location off Retail Center Drive which, again, this is on the north side, right next to the mall and across from the airport. We share our property line with Paradigm Storage, with Home Depot, the entire retail center as far as Dillard's the mall. Walmart Home Depot was it JR Motors? Millard's the mall, you know. Walmart Home Depot was it JR Motors? Jcpenney, you know all of that retail over there is roughly 730,000 square feet. If you look at the numbers just right here, that Paradise building is equal to. It's another 750,000 square feet or so under roof. And so ultimately, when you look at it from, let's just say, from the city's perspective, or you look at it from, you know, a vertical perspective, that's a lot of square footage under roof and we're ultimately doubling the amount of development that's already in place here on the north side. So when you have that much going in, you're more of an institutional player. People start looking at you differently and if you have a proof of concept and things that you're making money, that really starts standing out.

Speaker 1: 5:45

So paradigm storage, guys, is probably one of the best examples to start with, but to move forward. Separate to that is you have Boathouse as well. Boathouse is 49 units. It's a paradigm storage product, their condo map. But it's a little bit, I would say, more affordable just because of the location. It's out there by the 40 and the 95. Paradigm Storage is within the city limit, so it's a little bit closer to home. So people will obviously spend a little bit more to be closer to their home.

Speaker 1: 6:13

And then we have our headquarters that we're building and we don't talk about it much just because it's kind of our little secret weapon or what have you. That's a 20,000-square-foot office building. Ultimately it's a 20,000 square foot house. It's just a big office and that's right here off Dover and industrial. So it's central part of town, closer to the water. And then we have barn caves in the gym, right.

Speaker 1: 6:31

So you have four different models that are really going on here and the demand is continuing to show Example. Today I think we have an offer coming in for another five units just in paradigm storage, and my broker, which everybody knows, eric Adalia, he texted me and said, with this velocity, given the amount of units that we're selling, by the time this project is completed meaning the buildings are up we have already sold all of the units. So to be able to say, in this volatile market, in this environment, you're still able to produce an asset that is holding and investors are comfortable with. That's a big deal. So it does open up the doors for larger institutional investors and we're going to talk about JP Morgan here in a minute, but that really kind of gives you an idea on how we're hanging our hat here. But the data does support it. It's really nice for a group like us to be able to have our resources, whether it's subcontractors, the relationships with the city architects, engineers, city engineers when you know kind of how people maneuver, it allows us to actually have a well-oiled business. So that's where a lot of the heavy lift is gone. So being able to kind of hone in on an area that we see the demand, the data supporting it baby boomer spending habits is there. Healthcare is a big on the forefront. As the city, too, we can kind of come in and build these assets that we think are going to continue to have the demand. So that's really important. But again, really you know what's the next step, right? So, okay, we build these things.

Speaker 1: 7:49

Now it's about the exit. The exit's always really important and even today I was talking to one of my favorite investors and she's been with me for a long time and she's in every one of our projects and she's like Ryan, I'm about to make a bunch of money on paradigm storage. What about taxes? What do I need to do? Right and legally I can only guide so much because we're not advisors. But we can say well, this is what we're doing, you know, and obviously we want everybody to cross their T's and dot their I's.

Speaker 1: 8:14

But right now, you know, if you haven't seen some of the stuff that we've had in the past, we actually brought on a tax attorney that really does a lot of deferred sales trust.

Speaker 1: 8:22

So we've already been in the game of trying to position our investors to see other options, to position themselves to not only retain the wealth that they've created on that equity kicker but maybe reposition it and continue to earn, or even to start shifting it and diversifying.

Speaker 1: 8:37

What have you so really, that's what's happened with the barn caves really kind of started that too, guys.

Speaker 1: 8:49

For example, with solar, we can pass on the tax credits to our investors on solar and therefore for the next four years you're getting tax credits on your K ones or your 1099s it depends on when we start issuing distributions but you're starting to get some tax advantages on maybe some additional income that you have coming in on through those K ones, you can start saving on taxes.

Speaker 1: 9:02

So there's a lot of little things like that, the developers like us that need to continue to be sensitive to, not only for our own income but to continue to provide those resources to our investors. So, with that said, mike, let's talk a little bit about some of the things in conversations that you're having with clients about taxes and really kind of what you're seeing most people are leaning towards. Now again, we know about the IRAs and people rolling over, but what seems to be the common conversation? Because we are getting ready to pay off our investors on paradigm storage and so we're already starting to start our phone calls to welcome and thank them now and thank them for being a part. But what are you seeing?

Speaker 2: 9:36

I think from an investor standpoint, you know the typical things that I hear. You know people looking to do and we've seen this in paradigm storage. I think in particular is the 1031 exchange.

Speaker 2: 9:47

You know I'd love to say it's 1031 exchange into a unit. In the barn case we're not there yet, right, that's a fun. But we as an institution we are offering that option for 1031 exchange right here at paradigm storage and that, I think, is the easiest transition from an investor standpoint, because a lot of people that we have are real estate heavy, they love real estate. That's where they've made their, whether it's a family office or it's a high net worth. They're constantly looking for real estate projects to invest in and that the 1031 exchange obviously is a common, common, common discussion that I have.

Speaker 1: 10:24

We just had 18 units purchased by it through 1031.

Speaker 2: 10:27

18 and perhaps another 10.

Speaker 1: 10:29

We had another 9, a 10, a 7, a 5. We've had a lot, I think. Out of all the 208 units, I think we're going to have less than 100 owners, because most people are buying more than one unit.

Speaker 2: 10:41

Yeah, exactly. So obviously that's something that we hear all the time, right, in terms of how do I really shelter this game that I have? And we just had a conversation with one of our larger investors but she's a bit older, right, and there's some things happening within the family. It's in a family trust. So how do we divert those assets out of the family trust in the paradigm projects and not have to incur taxes? That's always a question that we get right. So, you know, we, you know as a firm, I don't like to give tax advice, obviously, but there are ways to shelter that income and not have to pay the capital gains on it. So, you know, we're constantly looking with deferred sales trust another huge idea where people are essentially, you know, using that to invest and reinvest their, you know, their real estate gains and shelter it inside that DST structure. So, for the sophisticated clients and maybe this is just a reflection of where Paradigm has come over the last 18 months, the conversations that I'm having with our investors are no longer the smaller check writers, the $10,000 to $20,000 check writers. These are people that have $500,000, $1 million, $2 million, $4 million, right? So I think that's a reflection, I think, of the product that we're bringing to the market, the sophistication, but in a real way it's the track record, ryan, in terms of what you've been able to deliver and as, from an investor standpoint, people want to reinvest in things that have made them money in the past.

Speaker 2: 12:24

Right, so people are getting more comfortable with the overall asset class. I think they like storage and they're seeing this idea of you know storage plus residential. You meant true storage, not just you know, we're saying we're building a, you know a large garage. These are true boat and RV garages allowing people to keep you know their toys where their home is, whether it's a second home, first home or third home. So that product, I think, is catching sort of fire across the US and we've had people come in from Alaska, fly in to Havasu, invest with us. We have conversations with people all over the country that have seen this, given our reach on Instagram, facebook and social media platforms that have been able to see it. But there seems to be this buy-off, like I just can't get enough garage space and I think our demographics tend to be let's face it, they tend to be 35 to 60, right, that's our demographic in terms of our investor and our buyers, and that demographic is the one that has all the toys.

Speaker 1: 13:30

It's true in most of the wealth too, which ultimately are looking for more and more write-offs. I know one of the common things for local buyers what's happening is they don't have enough room in their current RV garage it's tied to their home and so they're coming out and buying another storage unit. But garage it's tied to their home and so they're coming out and buying another storage unit. But a lot of the conversations as I'm seeing them in passing, as they're maybe epoxy in their flooring or moving in and getting their keys they'll say, yeah, we had, you know, some tax implications and our advisor, you know, wanted us to buy more real estate or pay Uncle Sam which one is it, you know? Which obviously leads into additional opportunities to invest. If you have the same issue, instead of buying real estate, you could actually own a piece of real estate through an investment structure with Paradigm, and then you don't have to worry about work or management or what have you of the asset. So we do that heavy lift. There's another opportunity that we're actually working on right now. It's called the Qualified Opportunity Zone. For a lot of real estate investors, they probably know what that means, but ultimately it's locations within certain cities and counties where I would say, from a federal level, want to try to push more growth, and so what they've done is they've created incentives for investors to go into a fund that is an asset in a specific location that has, again, has been identified for needing growth. And we would get you know. You can roll your capital gains 1031 exchange sales from, maybe, a business and you can actually roll those gains into a real estate opportunity zone where, for example, a lot of people don't know this but, like, let's say, you have a sale of a business, you can't just roll those gains into real estate getting 100 percent, you know, right off on on your gains. You still have to. You can defer them, but only for so long. The same thing with 1031, it's like for like. So if you sell real estate that's what 1031 is for you can sell real estate and then you can roll that capital gains into another real estate investment. You have to own the property, you have to be on title. So, yeah, like for like. What we're doing is ultimately it is like for like it's real estate, but you can also sell businesses or any other assets and invest that into a real estate fund and get those tax advantages. So that's another fund that we're actually looking to open because so many people and investors are going.

Speaker 1: 15:37

Ryan, not only do we want the more diversification, we want to stay in real estate. We're getting a lot of profit on your end, but how do we maneuver for taxes? So it's either you could roll into some of the other funds. So what's happening is is we're just kind of, you know, ears to the ground and maneuvering our structure. It really doesn't matter the, the, the construction, the product, all of that. It has its own merits.

Speaker 1: 15:56

The same thing with paradigm storage. We know that there's a demand for it. The only difference is the location and the way we structure the fund for those tax advantages for our clients. So it's really just kind of maneuvering and implementing. You know, basically, the tools that are out there to provide those amenities to our clients. And so, with that said, you know let's say you know with not only Dover we want to do a cost segregation on that. We're going to do a cost seg as well on the gym, which ultimately means we get to pass those real estate what's it called, not tax credits but depreciation back through to our clients. So it's really kind of neat.

Speaker 2: 16:39

You know how we're actually making this more on the forefront, because again, our clients are making a lot of money and they're're they're looking for those, uh, again those tax advantages and I think, too, just the way that we're structuring and and we're finalizing this with our attorneys now, our tax attorneys and, uh, our fund attorneys but to be able to basically essentially have, within the barn caves structure, our investors coming into the uh, coming into the fund and actually viewing this as sort of a pass-through right, you're actually purchasing a lot as you're coming in to the fund and then maneuvering this so we can roll over the principal and profits into that down payment and have it in a tax-advantaged way, right? So this is, in a way, for us, you know, we're trying to stay at the forefront of, you know, real estate and tax law and be able to essentially help our clients manage that. You know, because I think, in particular, barn Caves is a unique product, right, because it's being seen as a high-return investment and we have plenty of people that are just saying, look, I love 31 and a half percent projected return on it and I sort of get it. It's 93 units, it's not. You're not building a thousand homes somewhere, you're in your home market, you're building. Sure, it's a $75 million project, but it's understandable, right?

Speaker 2: 17:59

So there's those people that just view it from an outright return perspective, but there's a heck of a lot of people that have sort of seen this and said, no, I want to invest in it, but I also want to own the unit right.

Speaker 2: 18:12

And we've got the AMI offices that are coming in for multiple units, that they're just basically taking their returns that they get from the end-of-life fund and rolling it into multiple units. So we want to be able to do that in a tax efficient and effective way for our investors. So I think we are trying to stay on the cutting edge of what we can do within the tax law and making sure that we understand it, our investors understand it and get the advice that we need and that, I think, is, from my perspective, I think that's our job. Right, we're not just developers but effectively, you know, the nice thing about us is we're a platform and on that platform, you know, we have consultants, we have attorneys, we have tax accountants all these people that we can not only, you know, use to our advantage but also for our clients' advantage, and so we're becoming much more of a quote-unquote family office, right with the development.

Speaker 1: 19:07

On, yep, that's exactly so. Let's unpack that a little bit more. So that's the fruit here. Guys, I wanted we're going to kind of, we're going to talk about that a little further so it's understood probably a better. So that's funny because some of our investors that are actually in paradigm storage are on this and want to own units or have already bought units once the project was, not only did they invest into it, but they also own units here. It's really kind of the same concept.

Speaker 1: 19:32

The majority of our clients do like real estate, so of course, no one's going to put all their eggs in one basket, right? You see, paradigm. You're like you know what? I want to dip my toe in the water. Hey, I've had several investments with them. I'm going to keep rolling capital, but they still have some of their liquidity and a lot of their net worth is still in other assets in real estate.

Speaker 1: 19:50

What has happened is we learned our lesson with paradigm storage, where, because these are condos, this is a for sale product. It's fee simple, each unit's a for sale product. That opened up the doors to a lot more buyers, a lot larger buyer pool, and you have real estate investors that don't want to do a step or can't do a step up in their basis, or because of interest rates are high, they don't want to buy another residential rental and the entry point is so low here that you can buy one or two. The management is much less. The kind of list goes on on. The reason why people continue to buy these. It really has to do with the returns are stable. You don't have a lot of turnover. People continue to buy these. It really has to do with the returns are stable, you don't have a lot of turnover, the maintenance is minimal and the entry point is low. So the net is a lot farther out from. Investors and people from across the country are buying these site unseen, because the asset class is getting more and more PR, from Goldman Sach opening up a $500 million debt fund for operators on takeout loans after construction for buying holds, in essence, so long-term debt, 30-year, 40-year mortgages against these assets. So what's happening is institutions are paying attention because the asset has been so stable.

Speaker 1: 20:57

But to fast forward, what's happened is with the barn caves, it really opened up the doors for investors to say, hey, ryan, we want to invest, but we want to buy a unit, and uh, and then we would like to own one. And so what happened was again learning. What's happened with paradigm storage is we went to our securities attorney and our tax attorney and said hey look, if we have investors that who invest and whatever that number is, and we can talk about it, and if anybody's interested that hasn't invested with us, you know, they can lock in a lot, invest a minimum amount, and then what happens is that 30% projected return. I can return that profit to them with a gift of equity. So now they're getting the gift of equity, eliminating the tax gains on on or the profit and on the taxable gains on the profit, and it's rolling into ownership and therefore our investors are going. I love that idea, right. So now let's say you roll into, you have an IRA, it's fine, we can roll those gains into ownership, but you take the principal back to your IRA.

Speaker 1: 21:51

There's so many different practices, but here's the biggest takeaway we have, I think, north of 100,000 people on a waiting list to buy these units. That's how much exposure. We've really pushed the barn caves for everyone to see. But the interest list has gone through the roof. On top of other developers, other landowners, other guys are trying to get a hold of our floor plans because they want to build something similar, because it's just taken root. It really has. It's really kind of impressive.

Speaker 1: 22:17

But again, what's happening is investors are going well, look, or buyers and investors are going I love what you're building, I love the price point as far as the sales price, so they're locking in on a sales price. So, from an investor's perspective, or even a developer, we're always focused on developing and selling to make a profit. If my own investors are looking for tax strategy, they're buying them and then we're gifting the profit to them for the down payment or a portion of their down payment. But yet we have a fixed sales price and we have right now I think it's 43 of our units or lots have already been chosen out of 93 lots we're already halfway sold, in essence right or close to. So what's happening is is now the investors that aren't necessarily know the location or don't want to own a home own? One of them is looking at it from just a straight, raw investment get my money back, move on or maybe reinvest? What's happening is they're going. Well, hold on. You already have set purchase prices, you already know it, so your pro forma and your projected returns are pretty locked down. The really only thing that we need to focus on is building them on time and on budget to stay on that pro forma projection.

Speaker 1: 23:24

So it really has created a lot of institutional players to start paying attention to the demand, because that's that's a testament to demand people wanting these, it's a testament to be able to build them at a cost that is favorable and affordable and attainable. It's a testament to the nature of the development and the and the fact that the majority of it is steel buildings, which lowers insurance costs, not only from a development side, from a construction side, but for an end buyer's, homeowner's insurance policy is actually significantly lower to have a steel building, all the way down to the technology that we're implementing for fire protection, which we could talk about on another webinar. But all of these things are changing the landscape of how Planning and approvals are being done internally with the city, at a private level or public level, down to how architects and engineers are trying to add value to developers by developing a let's just say the structural engineering of these buildings, where you can deliver the structural steel on one truck and it's cheaper for logistics and transfer and keeping the costs down. I mean, the list goes on on what we've created. So when investors the sophisticated people that want to know what they're getting themselves into are going to pay attention to all of this and then pay attention to what the world is talking about as well. So, with that said, again, this is what's happening is, is these investors are going? Ryan, we love where you're going because not everybody knows this we're working on buying another 37 acres right behind just west of Parad uh, barn caves, by the way because we the demand is there. But we're going to continue to develop right here in the area because, again, that demand is there. It'd be dumb for us not to.

Speaker 1: 24:58

And by continuing to provide those tax advantages, again by through ownership and gifting that equity, uh is really a big deal and I would say the majority I'd say maybe 50 of the investors that are in this fund want to own one. So by being able to create another vehicle for opportunity for clients, it's really kind of started standing out for other, let's say, operators like us that are trying to provide and successfully raise capital but provide more services to their clients. So I hope that makes sense. I know I talk a lot here, guys, but I hope that I was able to unpack that again. Again, the takeaway is investing, rolling your gains into ownership If you have, depending on the vehicle in which you've invested in, you can get some of that principal back, plus a prep if you need it, but you're not getting taxed on those gains.

Speaker 1: 25:39

That's a big play. So again, it's like you're going to buy a home. You're building a home on your own. If you keep the house, you're not going to get taxed on unreal, unrecognized or realized gains. You still own the home until you sell it. You're not going to, you're not, you're not going to have to pay taxes on any of the profits. Same concept here, because ultimately you're investing into the LLC that owns this project. So it's really just just a numbers game, is really all it is.

Speaker 2: 26:02

We're just simply going to have two share classes with them a share class for investors and a share class for investors that want a unit, right, so usually we can do that, I think fundamentally too. If you go through the numbers with the investors, I'm sensing too they sort of see this almost like an IPO, right. In a way they're like, oh well, you get a new stock that comes out of an IPO. It's typically cheap and it goes up after the stock is released, right, I think people look at this and going you're delivering this product at 425 bucks a square foot. Wow, okay, there's upside there, for sure. And I tell them look, these are our performers.

Speaker 2: 26:42

We're being tried to be conservative and, yeah, we could be releasing these at much higher price points over time. Right, we're phasing it out. Anybody that's not locking their home in through that V-share effectively. Yeah, I think we're delivering this below market. I've always thought that it's like, okay, $425, fair, but I think there's $450, $475, even pushing $500 a square foot, delivering the product that we can deliver out here at Havasu and making it. I think once you drive into the private drive with the palm trees and the favorite streets and you're going to get in there and going do I get to talk about that?

Speaker 1: 27:16

on this one, do I get to talk about that? I'm such a nerd.

Speaker 2: 27:19

Absolutely. But you're going to come in there and you're going to go wow, I'm just going to leave this place. This is so incredible. And then having a 32,000 square foot gym with a Dubai inspired pool and pickleball courts and all that creates the overall environment where you know that that price per square foot seems like a giveaway, and I think people are sensing that. They're like yeah, I see the upside in what you're trying to build here and also, from a concept perspective, we begin to brand ourselves in a way that when we come to that next location, they already know about the product, they've already seen it, they've seen what we've built here and that's why I think we're getting the take-up we get from Alaska or from Florida or from Missouri I'm having conversations with people in virtually all 50 states.

Speaker 1: 28:06

Let me add to this. So, guys, where I learned a lot of this? So my uncle. He was one of the presidents of Standard Pacific Homes, which ultimately sold to Lenar. He ended up going over to Western National that was building, I think, 33,000 apartment doors for the Irvine Company. He left there and became the president of Holland Partners, which builds high rises all over the world, and in my opinion, that would be my dream. He doesn't get much bigger than building high rises.

Speaker 1: 28:29

Okay, he always said that you make money on your acquisition. You make money on doing your homework and doing your research. That's where you make your money, and the biggest testament that we have to the success of where we believe the market is going is not only because the data doesn't lie, but you know, for example, paradigm storage. We thought we were going to sell these at $145 a foot. Our cost to build has actually stayed the same, which is ironic because we've been building through an inflationary period, but we plan on selling these for $145 a foot. Right now, on average, we're selling them for $175 a foot and the rest of Building E. We just sent out an offer actually, I countersigned an offer at $180 a foot, so it's the same concept as home builders. Right, if you buy earlier, in the phases, your cost is a little bit lower. As you deliver a product People are, you know, the demand goes up.

Speaker 1: 29:18

You can increase that price. That yes, the demand has gone up, but it also the market has slowed. I mean Q4 last year, during the elections was. I mean it was desolate, it was quiet and we kind of expected it. But we still were starting to see, we were still seeing trades where other real estate, traditional real estate, had slowed down and certain price points have definitely been hit.

Speaker 1: 29:38

But these assets just aren't, and it's simply because of the tax strategy. People are looking to continue to retain their wealth and not pay Uncle Sam so much. So that's been huge. So it's allowing us, because the demand for tax strategy is higher than homeownership right now. People own their homes. You may have a low interest rate on your home right now and you don't need to sell it because interest rates are high. You may want to move, to have a suit, but you can't because you're like well, I'm going to go buy a $1.2 million house but I'll have an 8% or sorry, right now, 6% mortgage where I have a 2% right now. So it's the. A lot of people aren't making those moves just because the rates aren't low and but they're looking for those tax advantages.

Speaker 1: 30:14

So, um, to move, to move over, and this is actually probably one of the most important things, and I think I announced this before, and if you guys were to Google apex, ap, ap, ap, apx, I believe they just bought 630 acres from the state just West and it's kind of northwest of the mall here, which is ultimately a left-handed rock throw away from us. Um, uh, to apex, I think it's like 10.2 or 10.3 million 630 acres, and then they're splitting that down the middle to the owner of viewpoint south point, which I think there's, like you know, 400 homes or 500 homes over there, which is literally you can see it when you're standing at paradigm storage and then, and then the idea is for they're going to build a lot more homes. So the demand is going up. But if you're seeing a 630 acre acquisition where there are two of the larger home builders in the area and including me, I'm going to actually end up taking 37 acres from the guy who owns a viewpoint North point for us to build more in that area as well, the demand is clearly there, and these are institutional capital-backed players. So we're really kind of in that same lane as they are. We just have a different product. They're building regular one-story RV garages on the next to the one-story house. Their product and what we're doing are two different worlds, so there's no real competition.

Speaker 1: 31:26

But if you were to Google that, what you're going to see is that they actually implemented Paradigm's gym and the barn caves in their PR when they were telling the world what they just did. So Paradigm has really created kind of this momentum for the north side to pick up, and I won't go too far into even a possible partnership with the owner of the mall because that still hasn't solidified yet. But we have a lot of landowners that we're working deals with all over the place. But you know that'll kind of give you an idea of our projections on the growth. And so what's going to happen is the barn caves are going to be really the first residential that's this close to the retail that's going to be delivered after that acquisition. So I believe we're going to control the market.

Speaker 1: 32:16

Right now our pro forma is showing that we're going to be just under $400 a foot. All the other sales in the area are north of that. So if we're already conservative on what we're selling and exiting these at, of course investors are like, yeah, I want to buy them. You're going to be on the lower point already. But let's say, investors, we decide to shut it down and we only have, let's just say, 43 units accounted for my investors that invested and this is important, my investors that invested. Same thing we did with paradigm storage the rest of the units that are not accounted for by my investors again, which have first right of refusal, we're going to start increasing the cost per square foot as we deliver the rest of those phases, so the other half of the of the project, if you will. I'm going to increase the sales price and I do believe the market's getting better. So and it's it's projected to get better by the time we deliver these units, I think we're all going to be in a much better position overall as an economy. With that said, that's going to change. Even the investors are walking into additional equity now from a gift perspective and from a documentation. It's not, it's just you're going to buy a house, and I'm obviously for X price, and then we're going to end up selling the rest of the phases for higher, so you're automatically getting an equity increase as you have owned that property over time, and then again you have all that development going up. So the point is is that there's demand there and I think the investors that are really digging their heels in to understand the barn caves and the location and what's going on in the city and where the demand really is, that's important.

Speaker 1: 33:31

Lastly and I'll open it up to you because I like to talk a lot, if you haven't noticed, guys, in the News Herald they just mentioned that the airport has been kind of a nightmare for years and years. Okay, they have been trying to figure out a way to make this thing profitable. It has been a nightmare. We went over there because we have helicopters that are renting units from us, because they can't find that which is cool, right, paradigm stores has helicopters landing at it, but they, they, they, those helicopter owners don't have a place to park their, their helicopters, they don't want to leave it in the heat and they don't have airplane hangers.

Speaker 1: 34:04

So we approached, you know, the, the airport manager and said listen, we, yes, we can build these things, we're willing to help you, we'll make some money, kind of aligned with our brand. But we also know that the man that that the city's looking for, and if we had a larger airport, more hangers, we're going to have more buyers come in. Okay, so, working with these brokers out here, that that's where a lot of buyers are hesitant to even buy out here, because they just don't have a place to park their, their stuff, their planes or what have you. So the idea is that we would try to help them build. So they just announced in the news herald that behind closed doors, they're talking about expanding and building out the airport even further.

Speaker 1: 34:39

So when you now have the city and now you have, like, the public side of things are really starting to bump up, or public side of things are bumping up and then the private side is already growing, or private yeah, public side of things are bumping up and then the private side's already growing I would like to think that this area is just really now starting to kick off for growth and that mall is really starting to turn up too. So I don't know, I'm a little biased. If you have mine and I'm trying to make it beautiful, when you come down Retail Center Drive from the 95, I have four date palms that are like 25 feet tall. And because Paradigm storage parallels the land for the barn caves, I'm going to just continue those date palms right in front of the gym and the barn caves and throughout the development, but that's going to be the main thoroughfare for people to get back there to where all those houses are going to be built. So I personally think that our location is really key here.

Speaker 2: 35:29

Yeah, the location is key and I think you hit it. It's really North Havasu where the money is going into over the next 15, 20 years. It's the migration into this part of town. It's going to be our gym that you've said has been sort of central to the people that are looking at if they're going to move into that area. What's the infrastructure there, right? So talking about potentially even a new marina on this side of town. So I think look there and the city's lining that up for us there's talks of it, we're not sure, yet not sure yet okay, I have a lot of.

Speaker 1: 35:58

We have a lot of conversations. Okay, there's a lot of talks of it. Yeah, people don't know what they're doing.

Speaker 2: 36:02

So I just want to let you guys know fair enough, but it would be nice to have something like that up there too I think it's part of this whole development.

Speaker 2: 36:09

I see that as possibly a good possibility. So, yeah, when we look at it, we're well positioned locally here and I think we're well positioned with the city. I think every time you go into the city or Dennis goes into the city, I think we're getting that okay. It's paradigm here's the quality to build. Yeah, we understand what you're trying to do here. And paradigm here's the quality to build. Yeah, we understand what you're trying to do here and I think there's a, you know, there's a consistency which we're bringing to those conversations which are important. Right, because you're exactly right, you've sort of flagged a couple additional developments that we're going to do here in uh, in havasu, which is terrific, but there's no shortage of building the city out. It's just, it's really just beginning in terms of it's what I think is going to be the next really important phase for Havasu right, hotels, more infrastructure, bringing the big supermarkets in here. It's going to be an amazing. Especially north side of Havasu is going to be amazing place to live.

Speaker 2: 37:05

And I think, from my perspective you look at the map the barn caves is the gateway to all of that activity. You're going to go right, right next, right past the barn caves into all that development, right? So I think we're really well positioned for that and, of course, you know we deliver on our performance, just like we did here at Paradigm Storage. I mean, initially, we're performing at what? 145 a square foot. We're, you know, selling this stuff at 180, 185 a square foot, right? So I think, if they could, that's what I see for the barn case project and I think it sets the stage for Paradigm and what we do going forward, whether it's storage or it's, you know, storage plus residential. And that really brings us into the topic of how do you finance all this stuff? Right? Because that's from my perspective-.

Speaker 1: 37:55

Hold on Before you go too far, because I know exactly where you're going. Okay, anybody who has questions so far? Because Mike's about to tee off on something that's really important for you guys to know. I can see it in his face he's just biting at the bit to talk to you about it. If you guys have questions, please go ahead and start asking those questions now, and then we'll go ahead and answer them right after Mike talks about it. But this is also something that's very important and, again, it kind of goes in line with kind of the institutional side of things?

Speaker 2: 38:19

Yeah, I think so. So you know my background, as everyone knows I think that's been on these before or have chatted with me. It's an institutional background Wall Street for 10 years, private equity in Asia, taking companies public, you know. So, dealing with this idea of how to scale businesses and how do you bring the right financing mix to those businesses. When I was in Wall Street, I basically did debt deals for the largest companies in the US. I brought them transactions all across the globe and swapped them back into US dollars and whether that was GECC or Toyota, this is sort of what I did early on in my career.

Speaker 2: 38:54

Ryan's done an amazing job of building out his reputation in social media and the crowdfunding area, which, in a lot of ways, essentially is you create your own destiny through that model, and you do. You know your projects tend to be serial, right, one, one, one one. There could be some overlap between those projects, but that capital raise means they probably take a little bit longer to do the capital raise and because of it, you're also taking a bit longer to do the actual project itself. So my goal here within Paradigm, is to sort of take what we do really best the crowdfunding model, but then marry it up with more institutional capital, right? So what does that mean? Ultimately, that means we have to go get a revolving credit facility from a major institution, get that in place and bring some capital to that and then, therefore, when we go to our next race, effectively what we're saying is, let's go to the family offices. That's going to essentially provide the equity to support that line of credit. We've got JP Morgan right now. Knock on wood. I don't have wood here, but I think I'm going to have a term sheet from them, if not this week, early next week, which is going to allow us to do that.

Speaker 2: 40:15

So I met with the head of credit in JP Morgan New York. It's a relationship I've had for 25 years, and when I was in their office explaining why I'm there now and why I wasn't there three years ago and the differences in paradigm from a scale, from an infrastructure, from a vision and from our ability to execute, you know they took a look at that and I just saw the light bulb go on Right. It's like they're like oh, wow, ok, I love your business model. We here at JP Morgan want to get behind it. We want to basically be that lending institution that takes you from where you are today to that three billion dollar company in three years. We want to be lending you as much money as you can possibly take. Million dollar company in three years. We want to be lending you as much money as you can possibly take, but let's structure it in a way that makes sense for you today, but you can scale into a bigger facility over time, and so that's where we are. So what you're going to see from us on a go forward basis is the ability essentially to move as quickly as we possibly can with projects in parallel. Right, so you're talking about three, four, five projects at a time across the US, with institutional capital backing it. But how can we do that? Well, we've got the development team in place now. We know our costs, we know we have the migratory trends across the US. We know where we want to be. We're going to pick our locations very carefully, we're going to partner in the local markets when we need to, and we're effectively replicating something that we've done over and over and over again.

Speaker 2: 41:53

In addition to that, what the guys at JP said? Well, two things. One I don't think anybody else is doing this, are they? No, they're not, not the Barn Caves product. We haven't seen that. And number two, we really like the fact that you're not taking this to Los Angeles, new York, miami. You're taking this in the areas which they see as well migratory areas, where you can get land a little bit cheaper, where you know the demand is going to be there over the next 10 or 15 years.

Speaker 2: 42:26

And when you get a tailwind, by the way, with interest rates a bit lower, which I think they're going to be lowered here very shortly you're going to get a tailwind from an interest perspective right, your debt costs are going to be lower. So I think you know there and I was, you know, in those discussions I was perfectly honest with them. I said look, the I am less concerned with the rate that you charge me Right, because within the paradigm model we have the ability the way we build and engineer and structure we're built to go fast. We go fast. The faster we go, the more money we save right at the end of the day. And therefore I can be more generous to my, my partners, jp Morgan, and my and my equity partners, my LP partners, because we have embedded within our profit margins the ability to do that Right. If you're a traditional builder building 500 homes somewhere, yeah, you may not have those business projects. You need to count every penny.

Speaker 2: 43:27

I think, from Paradigm's perspective, the partners that are looking at us right now are, well, the partners that are looking for. I would call this like phase two of Paradigm, right? Phase one the traditional crowdfunding Phase two is going to be a little bit more institutional in its nature, right. Phase one the traditional crowdfunding phase two is going to be a little bit more institutional in its nature, right. So the people in, you know, phase two are going to be the larger family offices, the bigger check writers, but they're going to want to come in and essentially share a piece of the pie for everything that we do. Right, they're going to buy into that and therefore, that sophistication level is going to be you know it's much higher at the end of the day it really is.

Speaker 2: 44:11

So they have to buy into what you're doing, where you're going to do it, the timeframes you're going to do it in, and then make sure that you as an institution, as paradigm, are de-risking every part of that supply chain right, whether it's the debt, the equity piece or the underlying you know development aspects of it and I think they bought into the our ability to de-risk projects and our ability to deliver on time and on budget. So that that's the key part of this for paradigm. Now we enter phase where you know it's I would say it's not turbocharged, because I don't want to use that word but, um, we're going to go a lot quicker and and bring this sort of product out. And I don't know if you want to have granular on this stuff, but this can be like an amazing thing where we're putting a barn cave, you know unit, on a truck, semi-truck, and delivering it to a job site and erecting it in two days from a framing standpoint. So we can go that fast. But that's the advantage of having more of an institutional capital.

Speaker 1: 45:14

And I'll kind of open it up here too what's kind of wild is? I originally went into planning and designing this in a way that allowed us to go to the high dense areas the downtown Nashvilles, the LAs and build these in a way where you can go into a high dense area. You're looking for a high dense zoning. They're tall, they're skinny, they're kind of like those condo townhomes that are more affordable. That's how I looked at it originally. It morphed a lot from there and kind of went more into yeah, we're, we can make them luxury, believe it or not, with the same price as going more attainable. And so it's morphed over time and we got to a point where we are happy with it. But what's happened is a lot of other builders and developers started reaching out to us. So equal the amount of people that are interested in buying them. We've had landowners and developers across the country. They're asking to buy our floor plans from us or can we manufacture these buildings. So what's happening is, from like a firm perspective, we're even thinking about setting up our own manufacturing so we can actually white label these products and start giving them to other builders and developers. So think about it, guys. They say that the people that made all the money during the gold rush are the ones that provided the picks and the shovels. Right, if we're able to, if people can change the skin, maybe make some adjustments to walls or what have you, and we have that in place, you know, then then builders can actually buy these, put their name on it, we manufacture it and ship it to them, and we were handling everything from a back office side. So when you look at how many we can actually get out, institutions are looking at lending us the capital to do all of these things. So that's what Rev was going to talk about is, once these larger institutions are getting involved, they want a piece of all of the cash flowing perspectives that Paradigm has built into play. But what that does ultimately for you is create security and our investors, regardless of how big these check writers are, current clients stick with us regardless, because there's other opportunities with inside the brand and that are inside the company that we still want all of our existing clients to be a part of, and we still always open it to new investors.

Speaker 1: 47:12

But what's happened is is that I did not expect I have to give credit where credit's due. I told Mike, jp is not going to look at us. Man. He's like, trust me, it's relationship based. I'm like jp is not gonna look at the, the density is not here, you know we just the census bureau's data is not accurate. You know you're, you can't get the data unless you do private. I do like some serious private research from a third-party firm. And he's like trust me on this. And I'm like I know we have a good product, but will people will, will bigger institutions look at it? Because again, we're in a secondary market.

Speaker 1: 47:40

You know this is an area where people are really moving to to try to bring down their income or bring down their overhead. You know it's it's as much population small it just doesn't make sense for what larger institutions are looking at. Once they got which I have to give you know, mike was able to pitch it to get them to go I'm probably kind of interested. That's when it started opening up to really the inner workings and what we have created, because these buildings can be popped up in any you know, any geographic location in the country and any atmosphere. You can stack solar on any of this stuff. You can print these things out while you're doing your horizontal improvements. The buildings are being cut and printed by, just like paradigm storage. Right, paradigm storage has 56,000 pieces, including the screws and every one of these and everyone. We can get to a point where we know that number, that much detail in these barn caves.

Speaker 1: 48:28

So what's happening is is these institutions are going like man. When you get to a point with inflation and with all the cost of management and and even all the way down to like we have less, less labor and less trades, we can cut that, we can. We're cutting the risk. That's what they care about is risk. How are we mitigating the risk? And so all of these little attributes is what's creating that. So we feel that we're on the right track.

Speaker 1: 48:53

The demand is there and ultimately now it's like how can we print these things out and build the relationships with our clients and investors to believe in our vision and say, ryan, we want to be a part of it? And then implementing these additional tax strategies to open up the door for investors to be a part of it is huge. But then you can roll these back over and your capital back into either ownership or rotate into other projects with us. And that's what's really happening here with Paradigm Storage. Paradigm Storage, for the most part, is going to pay all of our clients not only the principal back but their equity and everyone who already wants to allocate the capital and roll them over to barn caves. We're going to shut down the raise on the barn caves. So we pretty much are done on the first raise for that product and now it's just about building it as fast as we possibly can, build awareness for it and continue to try to implement better practices for our clients.

Speaker 2: 49:40

So we're on the way and that improves. We've seen that here at Paradigm Storage, where we're sitting right now. Right, so we're now in the last two phases, two buildings F and G. Right, we're forward on where F and G we're putting the. You know we'll be putting the retaining wall in shortly.

Speaker 2: 49:55

So I think, from a Paradigm Storage perspective, we've learned a lot from Paradigm Storage right In terms of from the phase A to, you know, building G. There's a lot of information that we gather as a builder from that process. And, you know, I think one of the things I talked about when I was at the bank meeting with JP it was, like, you know, we can, under the right circumstances, build 50,000 square feet of new storage construction in 90 days. Right, that building gets dropped. We build very, very quickly. And they were impressed with that. They're like, okay, well, that sort of turns that model upside down, because the other model is sort of what you'd refer to with Goldman. They've committed a bunch of money to go take these C or class B storage units, storage facilities, and redo them and bring them up to market. Right, that takes a heck of a lot of investment and a heck of a lot of reinvestment in terms of bringing everything within that product up to market, whereas we can go and build 50,000 square feet in 90 days Once we got the building engineered and dropped. We go very, very fast. So in a way, they were like, I think from a JP Morgan perspective, like, okay, yeah, I sort of see that guys, yeah, you've sharpened your blade on the storage side, you've got apartments going up in San Antonio. You, as a builder perspective, you cut your teeth. You've got apartments going up in San Antonio. You know, as a builder perspective, you cut your teeth and now you've come up with a design which is unique in a lot of different ways, but you're not looking to put it necessarily in the hot. You know where. It's going to cost you 15 million bucks for 18 acres or 20 or whatever. It is right. You're going into areas that are affordable, but has that migration and we want to be in water. That's the other part of it too. We sort of feel like there's something about the boat world, the RV and boat world. That's part of our DNA and I don't think that's, you know, from a development perspective, certainly from an MFR perspective, that you know people haven't focused on that yet, right?

Speaker 2: 52:01

In addition to that, the way we build with steel and concrete. You know, after the fires in LA, I have municipalities calling me up going oh wait, okay. So what can you actually do here If we put in restrictions in terms of what that rebuilding looks like? You know what does this look like? Can these burn? Can they not burn? What's the wood content? You know from an insurance company, have insurance companies, have they looked at your product? Right, because these municipalities are looking at all that right now and determining what they need to do on a go-forward basis to rebuild those communities, right.

Speaker 2: 52:36

So I think the tailwind is there, for you know what we're trying to do, paradigms trying to build and the vision that we have, which is great. I like to see that. I'm not going to go and rebuild Pacific Palisades or anything. It's not on the agenda right now. But I think, whether it's hurricanes or fire or other weather, these structures are meant. Really, from our perspective, they could be anywhere. Florida has the problem with their structures right now, whether it's wood or other building materials, right. So we have some advantages, you know, at Paradigm in terms of what we're doing, I think we just parlay those advantages into markets that we think we can return and maintain the types of returns that we're giving right now to our investors, because ultimately, that's all that we care about at the end of the day. If we're not delivering the types of returns for investors that we promise, then okay. Then what's the point?

Speaker 1: 53:34

there's, no, there's no business. What's?

Speaker 2: 53:35

the point. So you know, if there's and this is what you know, really going back to my experience like how do you scale, scaling is important, you know, really, going back to my experience, like how do you scale, scaling is important because you can scale too quickly or you can scale too slowly and you've got to do in a way, effectively, that you as an institution, as Paradigm, feel comfortable with. And from my perspective, you know, within Paradigm we're in a much different situation than we were three years ago. We know our vision. We have enough experience now as an institution to be able to deliver that and walk into the most serious whether they're LP investors or banks and provide the business model and the numbers to support what we're doing. So I think that goes a long way.

Speaker 2: 54:22

And I to my comment more and more of my conversations with investors because if anybody's on this that I've spoken with, these are people that are much more comfortable with a million-dollar check or a $2 million check.

Speaker 2: 54:39

That's just a function, I think, of where Paradigm has come and where we're essentially heading. So very happy to see that and obviously, for our investors that are currently with us. Yes, ryan's absolutely right, regardless of what model we have from a financing perspective or a scaling perspective. We are always going to have an opening for our current investors, always going to have an opening for our current investors, and there'll always be a crowdfunding aspect to what we do, because part of our DNA and part of Ryan's DNA is having, whether it's a large or small investor, he wants those people to participate with us right. That's why we go to the extra length of setting up a reg, a right for everything that we're doing, so we can have those conversations with the investors that don't have a million dollars, let's face it well, and my philosophy originally and we'll sum it up too, because our philosophy originally was, you know, I grew up with a single father.

Speaker 1: 55:33

My father didn't do very well and we didn't, you know we didn't, I didn't go without, but I didn't do great, and so with the amount of relationships I built, pretty much from being boots on the ground in the mortgage space, the people that started trusting me a long time ago were my own friends and clients that I was doing loans for, and they just kept believing in me and they just kept investing this over time. It's just. It's really just snowballed to where it is today. So we've made a lot of good decisions over the bad decisions to get to where we are. But with that, let's answer a couple of questions and then I'll kind of tee off on that and we'll try to stay at Reddit an hour for you guys, so we don't want to take up too much of your time. Again, you guys have more questions? Let us know, chevy. So good question in regards to ownership. So what's happened is the 43 clients and I could be wrong. Tiffany, our relationships manager will correct me here in a little bit, but I think it's about 43 of our lots are already accounted for from current investors when you look at now. Mind you, for those of you that are on this, you know I have, for the most part, a personal relationship with you. Some I talk. I talk to some people more than others, and some people have things that happen in their lives and they call me because they just they're worried about the world and the market and we just establish a better relationship. But what has happened is is we knew that these properties are going to probably be a little closer together.

Speaker 1: 56:44

To get rid of the riffraff of like Airbnb is really important. I don't like Airbnbs whatsoever. I've never wanted to own them. Airbnb in general right now is not doing so well, so we don't think even the investors that are really, or even buyers, investors that are looking at it from an Airbnb side, that had maybe some experience in Airbnb, are starting to consider not Airbnb-ing them, which is good because, since we're going to own the HOA company, we're not going to allow Airbnbs. Just so you know. And to go back to that is the 43 clients that I have in there, that I have relationships with. I know what their overall goal is to live here or be out here a handful of times a year, whatever it is, they don't want that riff raff either. So, really, what's happening is the nature of the owners that are inside this, this, this, uh, community. I'm going to know pretty much every one of them, um and, and it's really kind of nice Cause it's like my own little network of like a real estate community of people own, and so, listening to them, they don't want that riffraff either.

Speaker 1: 57:42

In fact, even for parking is kind of a problem for us. To get you know, if you have a, if you were trying to throw a big party, you'll be able to be okay to park it, but if you have five or six different units are all throwing big parties at the same time. People are parking on the street, you know, down, like out by the gym street, so there's not a lot of extra room for parking. So that way the riffraff isn't going to be there. We're going to make a requirement that people have to pull their stuff in the garages you know all that fun stuff, because we want to make this place look really good, like, for example, we don't have street lights and every single one of the units that have the lights on the side of the garages, right? So, like outdoor lighting, every one of those lights, every unit, on front and back of some of the garages Some of the units, as you know, have garages on both sides, in essence, drive-thrus All of those are all going to be lit by the HOAs. Now, mind you, the whole project is on solar, so the HOA is not going to feel it, but both sides of those lights will be on all the time. So if you're an owner and you come down the street which, by the way, we're putting all the streets in pavers but when you come down the street, every single unit will be lit up and the unit owner doesn't have to pay for the electricity. It's all on the HOA. So it's really pretty neat on on just the nature of what we're creating inside the community.

Speaker 1: 58:52

And people just don't want that riffraff and, to be honest with you, I don't want it either. So the fact that we're not allowing short-term rentals is a big deal. To finish the question and answer it long--term rentals, yes. So we will allow the long-term rentals, the six-month one-years. We are going to choose a property management company that we know that will vet those tenants and do background checks and collect deposits and so forth. That'll be tied to the HOA as well because they have to get approved to go through the gate anyway. So we're going to kind of sniff a little bit of that out and maybe provide those services to the people who own them and want to rent them out. Tammy, to answer your question too, we're going to be anywhere between 850 and 1.2. The largest unit is going to be 1.2 and the smallest unit's 852,000 is what we have right now.

Speaker 1: 59:40

Real quick story, and I'll kind of start with one thing and then back into a story we're even looking at. So one of the things that we learned about paradigm storage is people want, you know, air conditioning, if they want all that stuff. So, moving forward, after our phase one, we started delivering our units completed where we are, we'll offer, you know, our unit owners if they want you know, epoxy floors or certain things done inside their units. We're we're helping them with that, um, and it's where we're helping them with that and that's what people want. When you kind of get to know the culture of people out here or what the buyers like, they just want projects that are done, completed. They don't want to have to deal with the work. It's because they don't want to come out here. They just want to come out here and enjoy the time with their family or get away or what have you. They don't really want to work.

Speaker 1: 1:00:21

Now what we're going to do for every one of our unit owners or buyers, we're going to sit down and you're going to have a design center and you can adjust whatever cabinets and looks and hardware and countertops and flooring and you could do all that. So we actually have a full blown design center for our, for our homeowners, and then ultimately we're even going to allow appliance packages and what. And we're trying to partner with two or three really well-known furniture stores, not only here, local, but even other ones that they would ship. And we'll actually have our buyers choose the furniture that they want, because obviously we'll have the dimensions. We'll have a couple of units you can kind of walk into and feel, but then by the time they close escrow and they're ready to move in, we'll actually have the whole thing furnished and taken care of to what they wanted and what they paid for. So we're trying to go over and beyond any even builders out here. They don't do that right. You sell them the house, then you got to go get your appliances and your washer and dryers and you got to do all that. We will have that all handled and picked right in escrow and the people that buy these are just kind of getting a much more hands-on experience with a paradigm brand. That's what we want to provide. So if we're that red carpet feel for our investors, we want to give that red carpet feel to the people who are buying them, because that's where we're making our money at the end of the day. So hopefully that answers the question.

Speaker 1: 1:01:29

And one last thing about a story. And it's been hard. Originally when I started designing these, I was trying to design these in a way where I have a lot of really great friends, in fact someone who's on my civil engineering side, her name is Jamie. She actually oversees all of our stuff and works for our civil engineer, so very close with her. And she's a single mom and you know, being out here, the income levels out here, trying to make a living and get into homeownership, has been very difficult. So we were trying to design these in a way where even you know kind of that, you know single parent can afford, you know, or a single person can afford, you know a home because you know let's let's be honest divorce rates and singles, it's just it's. It's something that has to be considered if you're a good developer. So we were trying to implement some of that and I think some people will be able to hit that mark.

Speaker 1: 1:02:15

But, to be honest with you, one of the reasons why the numbers are as high as they are is because and I know I may get my hand slapped for this but a lot of the utility companies, they want bigger easements. So they've pretty much used a lot more of our land that we wanted to build more units, therefore the cost per unit would go down, but they want more easements. They want more easements in front of the units and the back of the units, on the side of the units. They just they've been eating up all of our land. So it's hard to try to cut our costs down. I think a lot of people think developers are just making tons of money. But it's not. With rules, regulations and approvals you just kind of get. It's a juggling thing that is really difficult for developers. But we're still trying to compress those costs the best we can. But I think we landed where it's safe for everybody. Okay, let's see. You're welcome. You're welcome, yes, it will.

Speaker 1: 1:03:06

So the home itself will have solar. If you guys are looking at the renderings on any of our websites, social media, what have you you'll see. When you scroll in, you'll see that there's panels on each unit. So the idea is to when we're going to build these and deliver the house with solar and you're, in essence, buying the house and the solar, so it's not like you have to lease the solar or any of that stuff. We're actually going to inherit the cost and then hand over the keys with solar, so you have the ownership of that solar as well. To go further, we just met with Unisource and Clean Energy department. With them, we had a private meeting about it, because we're going to be the largest development out here, not pulling from their grid, because we're able to produce that power.

Speaker 1: 1:03:50

The biggest issue that we have right now is storage. So a lot of the power that's going to be generated during the day is going to be inherited by the unit during the day, but we don't have the ability to create storage. Now, if you are a homeowner, you decide to create, have your own battery backup. That's different, but we can't get that in the beginning in our approvals. So therefore you're still going to have a little bit of a cost on your power, but during the day when you're running your AC and you're pushing all that, you know all that power through your unit it'll be catered by solar. So you know again, that's just kind of part of the approval process. In fact, because of the nature of the solar, we actually separated the buildings to 10 foot setback. So there's a lot of moving pieces but we are, we're trying to deliver this and it will be delivered with solar. So we're, we're past that part which of the project is funded already.

Speaker 1: 1:04:41

I'd say we're North of half of the project We've already. The biggest problem has always been getting through the approvals. All of that's for the most part done. We've already started grading but we're already halfway through our raise. I'd say another half would be good, but we already have maybe 6 million or so already committed from paradigm storage and that's not profit, that's just principle. So once the profit comes in, we know we're going to oversubscribe.

Speaker 1: 1:05:02

We're not necessarily going to try to do that, we're going to be looking at other projects anyway. So the current clients that have been rolling their money with us over time, going through IRAs, trying to focus on tax strategy. We're going to continue to try to be on the forefront of giving them more options to get involved in things that we're doing, but keep it close right. Continue to invest in areas that we know. Keep all of our sub base here. We know the relationships with our architects and energy right. We're going to kind of stay in that realm. So we're going to be offering up more opportunities for people as well.

Speaker 1: 1:05:32

No, corby, they won't, and there's a lot more to it. In fact, you know we were. We just had a conversation about it this morning. I don't know if we should say this on web. So all you guys, hope you love me. If I go disappear somewhere, um, just know it's because I get. I went live with this pot, this webinar, um, so we learned that the power company is implementing AI now to start tracking how much power you're pulling using uh, which is not uncommon. You know the marijuana industry created that problem a long time ago, starting in California, but they're utilizing AI on how they're identifying units that are implementing certain battery backups and and how much power you're pulling, and so on and so forth. So there's there's there's more to that. Maybe you and I can jump on a call and I'll tell you, maybe some more inner workings. There's only so much I'm willing to share here, but there's a lot of.

Speaker 1: 1:06:19

They don't want you, they will not buy. Basically, it's a money game. They're in the business to make money, so they don't want to buy power from us. If you think about how much power we can produce and the reason I'm saying it this way is because the majority of our buyers aren't going to live here full time, they're not going to be pulling power so we were looking at it as a developer, going, hey, the whole, all of them. So we're like, okay, how do we, how do we commit? I wonder if we can make some more money, not only, maybe, income for the company, of course, that's how we're going to look at it for sustainability but maybe we can pass over that cashflow to our investors, even after they made their money, and get, get out. Because, again, what we did, just to let you be producing this and bringing in our own legal to kind of do the negotiations for it.

Speaker 1: 1:07:05

But yeah, they don't. They don't want to buy power. Therefore, hence the backup batteries, because if you have storage, then they can pull from that storage when they need and then you're selling that power Right. So, right now, that's that's one of the reasons why they really don't want that backup, so, or that battery as well. So, just to kind of keep an idea that it's a, it's a money game, man, these, these, these how this world works. We just got to kind of dance and, you know, kind of play and maneuver around it and we don't have a lot of control, but that's kind of one of it. So hope that answers that question.

Speaker 1: 1:07:35

So, all right, guys. Well, thank you all very much, mike. Is there anything else you want to add? Cool guys, we're actually not only going to let this go live for everybody that has registered and you can watch it in our in a data room, but we're actually going to put this on our podcast platform as well. So if you guys want to share this to anybody, uh, please do as you guys can. Hopefully you guys can tell we put a lot of energy and effort into the design of this product.

Speaker 1: 1:07:53

Obviously, if we really want to take this serious and go across the country in different atmospheres, if you will, different jurisdictions, there's certain compliance and codes and building uh practices that need to be implemented to be able to take it nationwide. So a lot of that is right here. It's implemented. We've got a lot of good, positive PR and really we couldn't do it without our clients and our investors. So truly, from my family to yours, thank you guys for all your trust and love. We see a lot of our current investors in here and I hope we can continue to knock it out of the park for you guys. So until the next time. We really appreciate you guys. Uh, we feel that the world's okay, it's not burning like it was a few months ago. Um, and we're we? We see that there's, uh, there's an uptick in activity. So again, thanks for joining us, guys.