Welcome From The Tennessee Ranch

SPEAKER_02 0:27

Alright guys, as everybody knows, Ryan Garland here. I'm gonna get right to it today because we have had an amazing last couple days. We got Steven Beagle here, and we're actually at the ranch. We're at a different location, which we normally are shooting in our podcast studio in Lake Havasu. But one of the reasons why we wanted to have Steven come out here is just to kind of spend more time together. We've spent a lot of time together. We really have.

SPEAKER_01 0:47

We have, and it's been so much fun out here in the middle of the mountains, you know, in Tennessee. The weather's been extraordinary.

SPEAKER_02 0:53

Unbelievable. This is the most beautiful time.

SPEAKER_01 0:55

You know, stunning. I walked out this morning at 6:30 in the morning, and the fog is over the river, and we I just had a great time.

SPEAKER_02 1:02

Yeah, I love it. Well, so for those of you that don't know and haven't uh you know new to the podcast, uh Stephen Beagle is actually our architect on the Barn Caves. And we're gonna get into, you know, really the depths of this project because we did a couple webinars and podcasts before, but I feel like we missed the mark a little bit, and that's the reason for today. And I really want everyone to not only know more about how this kind of came about in the design and why we went and got you uh, you know, to what I'd like to think is one of the best in the business, period into story.

SPEAKER_00 1:30

Thank you.

SPEAKER_02 1:31

And and I want to we're gonna we're gonna share with our audience really your pedigree. I want really people to know who you are, what you've done in your in your in your career, how long you've been in the business, because you've been in the business longer than I've been alive.

SPEAKER_00 1:42

And I'm not trying to rub it in here, but yeah, that's yeah, maybe we shouldn't talk about that, but but we will.

SPEAKER_02 1:48

You know, but it is it is important just for everybody to know, you know, how serious we even took it as a firm to build something that's just absolutely extraordinary. And it's always the story, right? It's the backstory, it's the story that sells. A lot of people know about my uh my connection with my mother. You know, we're sitting sitting we're sitting in a barn right now that was built in the late 1800s, and we built a home inside the barn, and I reconnected with my mom in 2017. I bought this property next to her uh during the pandemic. We didn't know which way the world was gonna go, right? You had you know, 2008 on the ever, I think, on the back of everybody's mind when the pandemic hit, right? And the kind of whole world shut down. And so I'm like, well, we got a little dry powder. Let's go, you know, if I have to work at Del Taco for the rest of my life, we'll put food on the table, we'll go just get real lean real fast. But I had reconnect with my mom in 2017, so when I bought this place right around the corner from her, we had this old barn that was built here, and I just had this kind of weird connection to it where I wanted to build, you know, a home inside that barn. And this barn has been repurposed several times to from livestock

Rebuilding Inside An 1800s Barn

SPEAKER_02 2:55

to you know, tobacco or what have you, things just leaning over as you know. I mean, you're looking at the poles behind us, and they're still leaning over, you know. It's engineered a little better than that. But you know, the idea was is to really share the story on why we came up with the barn caves, you know. And we'll talk more about it here in a second, but I really want to get into the weeds with you.

SPEAKER_01 3:14

Yeah.

SPEAKER_02 3:14

About your background too.

SPEAKER_01 3:15

But you know, here we are inside of an old barn. And you know, I take seriously the idea of new lives for old buildings, and this is a classic example. It is so well disguised as an old barn, and it's a very contemporary structure inside. It's a house inside of a house or a house inside of a barn. And it's really extraordinary. You know, if you were a tax assessor, you'd never know. I mean, this is just extraordinary. But it's a great studio. Yeah.

SPEAKER_02 3:42

It is a great, it's a man cave, is what it is. You know, it's my little spot. You know, I love it. It's great. Yeah, we ended up, you know, the the layout I think can hold about 6,000 square feet, but we built about 2,700 square feet, three-bedroom, two-bath. But it's a full house. I mean, you know, we we didn't go too you know too crazy with a Home Depot, you know, finish work or what have you, but something nice and easy and you know, not not trying to make it super expensive. And that was kind of the point, you know, simplify.

SPEAKER_01 4:04

Yeah, when I was up in Virginia years and years ago, I would buy these old stone buildings that existed back pre-Civil War. And the fascinating part about that is it was an old stone building, and they even had a a crawl space for a basement where they used to keep the sheep and the and the animals, and the animals would do their thing down there and heat the building. So the heat would rise from the animals up through the structure. And I I even found uh in the closet of one of these older structures a civil war relic. So these uh in the stair, when the when the when the um when the uh soldiers were retreating and in fear for their lives, they would hide out. They would hide out under the stair, and they thought it was their last day on the planet, last day on Earth, and they would scratch on the wall, you know, call my there weren't any phones, but they would say, This is who I am, this is my serial number, you know, and and I'm here and I won't be here. So there were those really weird moments where you could find scratchings on the wall.

SPEAKER_02 5:06

Wow, that's incredible. Yeah, and that's the reason why you're on this podcast. We're gonna talk a whole lot more about your history. And that we know how many cigars have we had so far since you've been here? Three? At least three. So we've really spent a lot of time together and it's been wonderful. And so let's get let's use the first segment of this to dive into the design of the barn caves.

SPEAKER_04 5:23

Oh, yeah.

SPEAKER_02 5:24

And then I really want people, as long as they want to stay on to this podcast, we're you and I are just gonna go off into our own tangent because I really think we have so much to talk about, even like the way we're raised in our lives and just how crazy this has been. That's why I'm just so glad you're here. You know, I don't I don't invite a lot of people to my my private home, you know.

SPEAKER_01 5:40

Well, and and I'm honored to be here. I mean, this is special. The Paradigm team is remarkable. You guys have treated me well. You've actually, you know, helped inspire me to do the best that I can do. I appreciate it. And that is, you know, you set the bar pretty high.

SPEAKER_02 5:54

Well, I want my team to hope my team actually will listen to them. And by the way, half my team doesn't even listen to my own podcast, man. Just so you know, they're too busy, but I love them no matter what, right? But I'm gonna make sure they know you. I'm gonna I'm gonna have Joe take this clip and send it to everybody in a big text and say, hey, just so you know, Stephen loves you all. Pay attention. Yeah,

How The Barn Caves Idea Started

SPEAKER_02 6:10

exactly. Um let's talk about the barn case, right? Let's talk about kind of our engagement, how we kind of got to know each other. I think that's important. Um, because really I think everybody does believe it's all about who you know. You know, it really is. It's always been that way. It's the way the life works, you know. And so, you know, let's uh the the the Pine Street project that's in San Antonio, yeah. You know, we had an architect and a designer that just really wasn't up to snuff. Right. We get the approvals, but as we start going into budgeting, we realize kind of how design what how bad this design really was.

SPEAKER_01 6:43

We won't go too far into that. No, no, it is serendipity in the sense that the uh the builder who was involved in Pine Street, he and I knew each other from a prior job. You know, he and I designed and built the tallest all stone uh lighthouse in the hemisphere in Corpus Christi. It's called Lighthouse Point. And these walls on this 165-foot tall lighthouse, right at the end of the New Oasis Bridge, right at the foot of the bridge, these stone walls are four feet thick and they taper in two directions. There's an inside taper and an outside taper at two different angles, and it tapers up to a width of two feet wide, and it's 165 feet tall, but it's all stone. Nobody builds an all-stone lighthouse. Usually you have brick and mortar. There are a lot of taller lighthouses in the world. You know, even Cape Hatteras is much taller, but to have an all-stone lighthouse was very cool. So we did it, we got it built, and uh his name was Matt Maynard. Yep, and we give him credit for having successfully built it. Yep. And he called me in when the Pine Street project wasn't going so well.

SPEAKER_02 7:49

Yeah, and and Matt has been honestly one of my favorite GCs I've ever done business with. And I've been in the space. You know, I've funded, I think, about three billion dollars in transactions now in my career. I think a lot of people have done way more than that. But from a ground-up construction finance piece, that's a lot. So I've seen a lot of budgets, I've seen a lot of things bust, I've seen a lot of things take longer. We've had you know stuff take longer with our contractors. So I I really do respect and appreciate what Matt has done. He did a phenomenal job for us, and I really appreciate it. I tell him all the time, really appreciate you introducing me to Steven. So you get in there, we repurpose this thing, we move the building, we get we we figure out the power lines aren't going to go underground. I mean the whole thing, right?

SPEAKER_01 8:28

It was such a bad floor plan. You had to pole ball across the toilet to get into the shower. I mean, it was such a ridiculous plan. But we fixed it and we got it done, and it's done, and it's rented, and everybody's loving it.

SPEAKER_02 8:38

It's turning it up, yeah. It's time to give us the I wish the market was a little bit better, but hey, like, well, you know, there's it's all about figuring out how to you know take assets and hang on to them and repurpose them or you know, figure out tax strategy and make it work, right? It's the bottom line, it's real estate. You just sometimes it doesn't work the way you want, but you got to hang on to them and you figure it out, and then it will turn up. It's just all about keeping the asset.

SPEAKER_01 8:57

No, I'm proud of it. I'm I recalled me. I know it cost a bunch of money more than you expected, yep. But I'm happy with the product.

SPEAKER_02 9:03

I did. It turned out great. Honestly, the it's probably one of my favorite because those are those units that ended up turning into condo size apartment units, they're not apart normal apartments. I mean, these things turned out great. So I know we're kind of going on a tangent here, but that's how we met, right? Is through that project. So we have experience together.

SPEAKER_04 9:18

Yes.

SPEAKER_02 9:18

And so what was nice is and we so we started and finished the project, which is always important. I want a lot of my you know people that are listening to us to understand that it's important. And then we didn't hit each other at the same time at the end. Holy shit.

SPEAKER_01 9:30

Yeah, I celebrated the day we got the occupancy permit because it was a long battle to get there.

SPEAKER_02 9:36

And then finally we got the Barn Caves as phase one on the the gym. You know, we got that uh permit and we're moving dirt, and that was uh that was an undertaking. Another struggle. That was another you know what it's you just I tell everybody all the time, you gotta have thick skin for this business. That's why there's not so many as many developers or builders out there, man. They're you know, but once you get it work once you figure it out and you have the right team, it's it can turn into a nice little you know profit machine. So um let's let's just go ahead and get right into that, and then why won I won't I want you to give us a little background. You know, how about this? Let's back up. Let's give you give a little background about you. You're gonna go very vague, but I want you to kind of share a little bit about your background, and then we're gonna go into the depths of that later, but we'll again we'll cover some part of the thing.

SPEAKER_01 10:16

And thank you for the platform. Yeah, so it's very simple, and the reader's digest

Stephen Beagle’s Career Origin Story

SPEAKER_01 10:20

version. Um, Stephen Beagle architect, um, born and raised in Texas, educated at Syracuse University in New York, uh, took my licensing exam in 1979. In those days, you the licensing exam was 12 parts, and the design piece was 12 hours on a single day at the top of a hotel. And they had a stopwatch on you. You have to finish it, click, and they you're done. And it was in pencil. I mean, you had to bring your own drawing table, you had to bring your own pencils, and you had to bring your own calculator, whatever you did. And you know, the funny part of that story is that uh I rode the elevator up shaking in the knees to the top floor to sit at my table and do the exam. And I rode with this young lady who had the the ginor the most ginormous drafting board I'd ever seen. And sh she looked at my little drafting board and she laughed, she started to giggle. And I said, What's up? What's what's so funny? She says, It's your first time, isn't it? I said, Yes, it's my first time. He says, Your board's too small. You're never gonna fit the paper on that board, you're gonna have to be moving the sheet of paper all day long. And I said, Oh man, I didn't read the instructions. I should have brought a bigger board. So I said, Well, how many times have you taken the exam? And she says, This is number six for me. Oh wow. And I'm like, Oh no. So now I'm weak in the knees, walking in, and I took the damn exam that day, the darn exam. I took the darn exam with uh my uh drawing board, moving the sheet of paper around every time I finished a piece of the drawing and uh calculating with a slide rule because I didn't trust this thing called Texas Instruments. Texas Instruments, the TI-50, had just been born, and I didn't trust it. So I I did the slide rule thing. Anyway, to make a long story short, uh this is now my forty-sixth year as uh an architect. And it's been a long ride and three thousand plus projects to my credit, you know, thank goodness. Every time I visit a city and get off an airplane, I rent a car and I drive to my projects. They're still standing, and it's like children to me. You know, it takes a long it's a much longer gestation period than having a child. You know, to to get to four years to have a project permitted is a long time. Yeah. Once they're permitted, then they get built, and then they're there, and then you have to go check on them from time to time to make sure they're still standing. So 46 years in and a lot of projects completed. The thing about me as an architect, and I think most architects feel the same way, you don't you don't actually you're not actually proud of your work until it's built.

SPEAKER_04 13:02

Yeah.

SPEAKER_01 13:03

All the best ideas in the world are are drawn and they're on paper and they're ideas, and they get rolled up, a lot of them get rolled up and stored on a shelf.

SPEAKER_04 13:11

Yeah.

SPEAKER_01 13:12

And they just don't ever get built.

SPEAKER_02 13:14

Yeah.

SPEAKER_01 13:14

Somebody should write a book about the ideas that never get built.

SPEAKER_02 13:17

Well, how many master plans do you have that are cooking that are haven't been built yet? I mean, we talked about that San Antonio project. You got all kinds of stuff all over Texas. I mean, you got you, I mean, you have some really big projects.

SPEAKER_01 13:27

We do, and and what's it's cyclical. I mean, what happens in this economy today is that a lot of investors and equity players are speculating and they're buying land. They're buying land and they're repurposing the land, they're rezoning, they're going through the PDD process or the PUD process. Um, they're not ready to pull the trigger, but they're they're trading on the come. They're trading on you know what tomorrow may bring. So they'll rezone it. So the master planning right now is phenomenal. I have more master plans on the drawing boards than I've ever had, and it's a good thing. But these are ideas on paper, and at some point you have to convert it from from potential to reality. And that's where I've been ri really fortunate in my career that a lot of it's built.

SPEAKER_02 14:16

Yeah. Well, I think what it helps what helps is when you have an architect that understands budgeting. You know, that's a really big conversation piece. You know, because without making sure, you know, you can design the hell out of something, but if you can't get the financing, you can't get it to pencil, and then deal's debt, you know.

SPEAKER_01 14:33

So and I I have to laugh about that because most of the clients who come to me, even the seasoned ones who've got experience at doing this, they'll come to me and say, We've got 300 acres here. We want to master plan it and we want it districted, we want a certain quantity of multifamily project you know, you know, housing, we want a certain number of retail spaces, we want a hospital, or we want a convention center, or some entertainment venue in the middle, and you put it all together and you make it work, even if it requires a rezoning, and then you sh you park it, you show where the trees are going to be, you show where the parking spaces are, how the roads are gonna are gonna access the property, you go to the fire marshal and you get access approved, and then they say our budget is 540 million. But no, it's not.

SPEAKER_02 15:22

Oh, you want to talk about that one? I know which one you're talking about, and I think it's 700 million.

SPEAKER_01 15:27

Yeah, it's it's a lot more than what you think it is, and it has nothing to do with inflation, it just has to do with reality.

SPEAKER_02 15:34

That's funny you bring up one that I know what you're talking about, like literally. We were looking at that one pretty heavily in helping this group, right? So all right, so your background. Um, been in space, obviously. How many, how many, how many years has it been now?

SPEAKER_01 15:45

46. In as a licensed architect, 46 years. I've participated in some of the most well-known firms you know in the United States. I was uh vice president of uh URS Griner, and uh that was a uh a team of uh started out as an engineering firm, so based in Columbus, Ohio. Uh we were a small company then, only 1,500 people, and we bought um the Griner Corporation out of Dallas.

SPEAKER_02 16:11

Only 1,500, okay.

SPEAKER_01 16:12

And we became 3,000 with that acquisition. Yep. And then we bought Dames and Moore, and then we bought Raytheon, and we slowly ratcheted up to the point where we were 9,000 people publicly traded. We were on a stock exchange, had to do our quarterly reports to the SEC.

SPEAKER_04 16:26

Yep.

SPEAKER_01 16:27

But we got to the point where a e com bought us. And at that point, I cashed out and said, you know, I can do this myself. I don't need a big company to buy little firms. Sure.

SPEAKER_02 16:38

So that's when I And then you started kind of going from a big boy to the smaller groups bought gobbling everybody up.

SPEAKER_01 16:43

Well, the requiring you know, I I figured it out. I mean, they taught me. They basically taught me how to do this.

SPEAKER_02 16:49

Once you go through an exit like that or a roll-up, it the light bulb turns on.

SPEAKER_01 16:52

Right. So I spent some from nine 2020, no, 2001, right at you know, I was running the Pentagon renovation from 1996 until the attack occurred at 9-11. And that was all part of the same company, URS Griner. And uh it was a terrible day, of course. I lost a couple of people at the Pentagon that day, and we had an office uh on Park

Licensing Exams And 3,000 Projects

SPEAKER_01 17:15

Avenue in New York, so my other staff watched the towers fall. And we can get into that because I want to bring that.

SPEAKER_02 17:22

I'm gonna ask you all kinds of questions that you didn't even know I was gonna bring up.

SPEAKER_01 17:25

No, and we'll get back to that, but you know, in terms of learning how to do a roll-up, the uh I I took my cash, I basically chilled for a year, wrote a book, uh Profit by Design, first edition. It wasn't published in 2003, but I took you know what I could take in terms of cash and I started buying the little companies. I bought um a firm in um Los Angeles called Taylor Fears Oren, I bought a firm in San Francisco called Ian McKinley Architects, I bought a firm in Arlington, Virginia called Settles and Associates, I bought a firm in Houston called the Spencer Partnership, and the strategy was these are mom and pop shops that are not well financed. They got a big debt structure and you know they're great design.

SPEAKER_02 18:15

Yeah, salaries and big overheads, yeah.

SPEAKER_01 18:17

So you you step in and you you realize that they're in trouble, but you you want to help, but you also want their portfolio. You want the skill set. The staff are the most important part of the acquisition. Always. The staff are the most important part of any acquisition if you're gonna buy a company. So we ended up buying several and then cross-fertilized. So the Houston firm specialized in K-12 and condos, and the firm in Arlington, Virginia specialized in renovating federal office buildings. The firm in San Francisco uh was diagnostic. They did a lot of consulting work with law firms and with insurance companies at a very high dollar, you know, this is high dollar. Which is a very $600 a month, you have $600 an hour just to you know be a consultant.

SPEAKER_02 19:04

But the firm in Especially for insurance claims.

SPEAKER_01 19:06

Yes. Yeah, and the firm in LA was into retail and uh doing specialty projects. So once you realize that you have sort of uh you have these theaters of of uh special skill sets, then you realize, okay, I've got this now under my umbrella. And feed each other. We can cross-sell. So all of a sudden, yeah, we've got K-12 schools in Houston, we can do that in Virginia. So we started competing for that. And if we can do retail in LA, high-end retail, Hollywood stuff, we can do that elsewhere. So you do it. And then what you do is collapse the overhead in all of them.

SPEAKER_02 19:45

Yeah, deal with all the back office and all just your overhead drops. Yeah, we're doing the same thing. So that's how we do it, right? So our overhead doesn't change every time the more deals we do, our overhead does not change. Same team, different same systems, just you're bolting on the same structure. We just we can take on another deal, bring our management fees down, and our back office still stays the same. Yeah, a little bit of a delta, but not compared to the profit margins or unbelievable compared to when you compress your back office.

SPEAKER_01 20:12

When you realize that each one of these smaller firms, mom and pop shops mostly, have an overhead structure that shouldn't be there. Yeah, too much overhead.

SPEAKER_02 20:19

They're drawing 100% out of it.

SPEAKER_01 20:21

And most of it is the mom and pop shop, so you've got to get rid of either mom or pop or the daughter or you know, all of all the hybrids.

SPEAKER_02 20:28

The boyfriend or the ex-husband, or you start yeah, you start looking at the family dynamic, you go, well, hey, hold on, you got an ex-husband with the kids and the chow all the money getting pulled out, and why don't we just shave all that down?

SPEAKER_01 20:39

Yeah, yeah. There's no reason for that particular little company to pay for your daughter's apartment in Denver.

SPEAKER_02 20:46

But you're trying to get the tax write off for another office.

SPEAKER_01 20:48

You collapse it, you collapse it and you consolidate the overhead into a single unit. So now all the marketing and the business development and the accounting and the the HR stuff that's all in one place, but it's servicing everybody.

SPEAKER_02 21:00

Right. Yep, love it. Same, yeah, same normal stuff. And that's honestly what you're doing. And then what happens, even from an insurance side, because now the insurance, and uh that's a whole segment we can talk about it when it comes to insurance, especially for someone your knowledge. But insurance costs have gone up, right? And it once you start having an umbrella policy and you have the right groups, you can start compressing your costs, start bolting it on. Insurance is you know what's funny, is a lot a lot of uh developers. Well, I think the the seasoned guys have really been bringing it up more often, but you know, a lot of these new these you know guys are doing maybe two, three deals every five years, right? Maybe a multifamily here, that, but they're not really looking at their their insurance play as like a big component to their balance sheet, you know, and we're looking all the way down to like key man insurance. So we're getting from when I say insurance, I'm talking every level of insurance, builders risk. I mean, you know, exit. So, like for example, paradigm storage, all my storage units, even though

Why Great Design Must Match Budgets

SPEAKER_02 21:50

we sell the building, we sell the units, we still insure the building. So we insure the building, which is on the HOA balance sheet, and then everybody, in as far as the owners of the units, have to just insure what's in the units, they don't actually have to insure their own units. Just like with condoms. Correct. Yeah, so they're condos is what they are, but they are fee simple. So you have you we did track map it in essence, and then you sell the units, and you now you everyone gets their bonus depreciation and qualify for 1031. It's just a hell of a product, which we'll talk about later. But um, anyway, so keep going though.

SPEAKER_01 22:17

I want to so that you know in the professional service business, our Architecture engineering and this is w one of the chapters in my book. So you you realize that it's expensive to do business as a small firm. So you've got to get bigger. It's less expensive to do.

SPEAKER_02 22:33

The glass ceiling you've got to push through, which is typically is capital.

SPEAKER_01 22:35

And there are a lot of metrics involved here. You know, I've learned over the years that you know if you're ten people, you're not very efficient. If you're twenty people with the same overhead, you're more efficient. You get to a certain point, you get to twenty-five people, and you've got to double your overhead. You've got to have a second accountant, you've got to have somebody else to add to the staff in the overhead. So there are there are tiers. So you can go from zero people or one person to twenty-five. You get to twenty-five, you're efficient, but you've got to break the ceiling and add overhead. So when you buy companies and consolidate the overhead, you're doing the reverse of that. You're consolidating the overhead, you're being more efficient, but you still have the basics, the insurance. And the insurance is a lot less expensive when you're insuring five firms. Right. It's all about the revenue.

SPEAKER_02 23:22

And then so you, and then you, you know, in essence, you just divide it over the you know each firm that you own, and now that costs are struck.

SPEAKER_01 23:29

It's an allocation.

SPEAKER_02 23:30

Yeah, right. It's it makes things a whole lot better. And those and insurance groups, if you have the right insurance group, they'll help, they'll work with it because they love the fact that you're referring business and you're just consistent, and you have a big number back there. There's a lot of people.

SPEAKER_01 23:41

And in the design world, in the architecture and engineering world, there are very few firms who will very few insurance companies who will take on that risk. I mean, even Lloyd's, you know, gets upset about that. But you get to the point where as an architect, there are there are minimums. You you know the insurance game. So what happens, you estimate your revenue for the next year, and based on the estimated revenue, they'll quote you a fee for your insurance. And it's always ridiculously high. You know, so you're oh yeah. So you estimate low, and then you exceed that, and the next year you get assessed. So it's a game, and we've played the game. Um I don't like the game, but uh that's why you have to buy another firm in order to collapse the overhead.

SPEAKER_02 24:21

Facts, yeah. Well, yeah, it is what it is. It's self-perpetuated. You know, and and uh, and I I'll I actually have questions on that too, because I I think there's some stuff I'll learn from you on that. But um, all right, let's talk about the barncaves. Okay. Because you we we I mean, obviously you said Pentagon, and there was we're gonna be able to do that. You want to talk about the Pentagon? Yeah, but we're gonna I want to get to the barn caves. We gotta get to the beginning of the segment. I want so I'm really glad you know the our audience really got a chance to hear a lot of that because the way you've you have people can when I met you, there's a presence about you, and this is what I really want my audience to understand. You are not, you are a very rare person. When you can and I think everybody will kind of shake their head while they're listening to this, whether they're listening to on a plane or why they're driving or what have you. There's certain people you meet in the world that you can tell they understand something, but it's so deep-rooted in who they are that they can they can articulate it to teach somebody.

SPEAKER_04 25:19

Right.

SPEAKER_02 25:20

Dumb it down. I hate I know it sounds weird, but when you when I spend time with you, you're able to explain things to me where I'm like, that makes complete sense. Because the architecture world, forget it, dude. That's not my game. But and I can be humble enough to say it. But when I talk to you, you share it with me, and I it makes sense. So I've learned so much, and that's why I think this is morphed to where it's at. And that's where I would, um what I'm trying to drive home to my audience is by hiring you, in my opinion, is one of the smartest moves because I learned so much because we spent so much time together to go over this product. We struggle, and that product has really morphed into what it is today. But uh this isn't this is so important, and again, this is the reason why we're talking about this podcast. We have over 1,200 people, and I've been telling that number for like seven, eight months now. So it's growing. I just in our CRM, we just keep putting purchasing in our CRMs about how many people are coming in, brokers, dealers, buyers, uh, landowners, developers, builders

Steel Tech Meets Real Estate Demand

SPEAKER_02 26:20

that are all across the country that are reaching out to us going, we want to buy your buildings. What are your numbers? Who what would like talk to me? Like, and I don't have the time for that. I wish I could, and I'm actually going to start opening up a division, which we're this is gonna be part of our conversation here. But it's this this product has morphed so much. But what's happening is I'm able to architect uh articulate the design enough now from the structural steel to the paneling to you know, we're not doing the finished work, we're selling the building, we're delivering the building, and then everybody can finish it themselves. You can do three bedrooms, four bedrooms, bathrooms. It's almost like this structure, not only from a from not only from being able to pop plop this down in any land when it comes to wind loads or snow loads or what have you, steel building methods, insurance costs for fire, fire protection, which is another conversation. Like this product is the movement of the future. And what got my attention was when the pandemic hit, and I manage a debt fund. A lot of people know I still I came from the private lending side. So in 08, when the market crashed, I had a big mortgage company, lost it all. We all have, right? But I continued to build relationships and establish relationships that people had dry powder to go buy distressed assets, and they hired me to repurpose those assets. So whether it was consulting or brokering or whatever it was, I would go and acquire assets, repurpose them, or if it was sitting on their balance sheet, I'd figure out a way to make money out of something that was bad, right? So hence me continuing to fund hard money loans, fix and flips, ground up construction, I had this ability to understand once the project is done or it's a certain way, your end user that you are targeting is X, and you have to make sure you deliver to that end user. So I had continued to manage that fund. And so that fund, I would fund loans, sell notes, a mortgage backed security fund, did very well with it. But the amount of people, when I moved my headquarters to Nashville during the 2020 event, right? During the pandemic, I moved to Nashville because I realized when I when you know, coming from SoCal, I'm gonna back up. Coming from SoCal, when you manage mortgage or in that that's the hub of the world. So the money always comes from New York, but the the originating team and the the lines of credit always came from the the West. It was so competitive because we were the biggest originators as far as the location. Newport, SoCal would originate all the mortgages in the country, basically. And when that would happen, we have to cut our rates and our fees and our points to be competitive enough to get the deal, right? That's the loan officers do. But once you start going east, people are paying a lot more money for the money. So, you know, if you're what let's say I would sell a 8 or 9% note in California or on the West Coast, I can go east and sell a 14 or 15% note. So when the the rate hike hit in 22, right? Because the rates were super low in 20 and 2021 and going into 22. But once the rates hikes hit, I couldn't sell my notes anymore. So the only way for me to go was to go west, because then I would, or I'm sorry, east, and then I would start funding loans in the east, and then I would have a larger spread and we would survive. So it was always about survival. And if I'm managing people's money, it's always about survival, right? It is. But one of the biggest loan requests that were coming across my desk were barn dominiums. And so I'm looking at these, mind you, I'm funding construction loans. I'm looking at the builder, I'm looking at their manufacturer, I'm looking at their engineering, I'm looking at, I'm looking at everything before I fund a loan. I'm a bank. So I was becoming more and more intrigued and impressed. And I like literally went into this hole. I couldn't sleep for like four months because I was so impressed on the still-building technology and the way the world was moving towards that, that I just fell in love with it. So when the opportunity came, that was the property where the barn caves are, which is 18 acres right next to Paradigm Storage, north side of Havesu, right? Same landowner, by the way. This the landowner that I bought paradigm storage from, which is 14 acres, was the same landowner that owned the 18 acres. In fact, I should have bought the 18 acres when he gave me the opportunity. I was like, no, I just want the 14. Because I wasn't planning on building more in Havasy. I just, you know, I was just gonna build that and move on. But I should have bought the 18 acres, I would have bought it for a million dollars less, just FYI, right? But he was smart, he knew, he knew. So, but anyway, so I buy the the 18 acres, and uh, and then we were looking at it going, look, the building itself, think about it, right? You know this. So I'm just using this for example for my audience. When that building is a box, basically, and we pitched the roof and called it a barn, a barn dominium, right? But we can slant the roof, bring down the height, right? You're laughing because we talked about this from a strategic, every day, really institutional capital play. We can slant that roof, bring down the height, and make it more modern, and just have like one side, you know, one draw on the on the pitch. So that would help with you know the height and putting these up in other places and look at from an institutional play. That's why JP Morgan gave us an LOI saying, hey, look, we love where you're going. We'll give you guys 80 million to start plopping these things down another, because we wanted to be in primary markets. We wanted those areas. So now we're looking at it going, when you have 1,200 people on a waiting list and all these people across the country reaching out to us going, we want to buy these units. Now we're getting to a point where we're starting to look at the manufacturing side and white label these for builders. And I'm gonna go a little bit on a tangent, so forgive me here. But what has happened is, and I don't want to drop too many names, but I have family members that have actually bought and sold building companies, Standard Pacific, sold to Lenar, right? The list goes on. I have family members in that world. A lot of people don't know. But when you start looking at where they ended up going, is they ended up opening up law firms for construction defect law. And if I'm gonna start manufacturing buildings, I already know where we can get hung up is manufacturing and construction defect, right? The defect of those buildings. We came up with an educational certificate program where these builders can buy the buildings, the builders come out to us while we're building our units in Paradise or at uh the barn cage location, because we have four years of developing there. They can come out, go through an entire training process and get a certificate, and then we pass the liability on once those buildings are being delivered to them. They take on the liability, right? It's not uncommon, normal stuff. Makes sense, but when you're developing something that's new, you got to start looking at from a litigation, insurance, right? The whole that's where it always comes lays out. So we've gotten to a point where we're looking at the barn caves from that perspective, hence the reason for this. And so again, I want to go back to the design of the barn caves. That's you know, but that is how far this is morphed now. This isn't just one location. We're looking at locations now in Ozarks and other places here in Tennessee. And it's it's it's getting to a point where this can ultimately become a public development where we go on the New York Stock Exchange and we start trading in. Yeah, I mean it's getting big.

SPEAKER_01 33:07

I agree. I agree and I love it. And when you first came to me with this concept two years ago, and it was uh your idea and Rob Sampson, our architect in the world.

SPEAKER_02 33:16

I want to give Rob, yeah, you love Rob. A lot of respect for him, yeah.

SPEAKER_01 33:27

You know, barn dominiums have been around for almost 30 years now, and it started out to be such a weird concept, you know, living inside a metal shell, and you know, it's really a hay barn that you put windows in. And so that's where that originated.

SPEAKER_02 33:39

Okay, can

From Sears Kits To Modern Barndominiums

SPEAKER_02 33:40

you know I tell everybody first and foremost, we're living in a hay barn right now doing this fire gas, and this is some pretty cool stuff. It's a really cool caliber is hanging out with me. That's a critical.

SPEAKER_01 33:51

So when I when I do the pathology and I trace it back, you know, the idea of manufactured housing and and the supply of housing and the the institution of providing prototypical housing delivered to the site ready to build. You go all the way back to the Johnson administration in the 60s and you look at uh Operation Breakthrough. So right after he took office, uh he signed into law Operation Breakthrough. And that meant the federal government was giving HUD, the Department of Housing and Urban Development, money to come up with a the least expensive form of housing they could imagine. So Sears and Roebuck got involved, and they you could buy a house for $5,000 through their catalog, and when you when you broke it down and looked at the details, they took a regular wood stud, you know, a two by four, they turned it 90 degrees, and it became a flat stud. So the flat studded wall was panelized, and they would ship you your house to your site and build it for you for $5,000. And there are a lot of these that still exist today. They're not well built, but but it is they start. They're still there. They're still there, they've survived.

SPEAKER_02 35:07

So you said you did 3,000 units in your life, 3,000 projects, and I asked you the other day, did any of them burn down? You're like, I don't think so.

SPEAKER_00 35:14

Right? And they haven't been you know born down, yeah, torn down yet. Yeah.

SPEAKER_01 35:17

And that's why I have to, every time I get off a plane, I have to go check to be sure that that's the case. So from from Operation Breakthrough, that resulted in the creation of manufactured housing on wheels, where you have a box on a trailer and you have a tongue, you attach to your car and you roll it around. So that was the second phase. That operation breakthrough 02. So you got the second version of that. That led to people having sheds, you know, prefab sheds that you can buy for a couple of thousand dollars.

SPEAKER_02 35:48

Which you still can get.

SPEAKER_01 35:49

Yeah, which you still can get at Home Depot. You can get so that led to the bigger shed, and that led to the barn dominium. So when you look at the pathology of in and how this evolved, we are now at the stage where the demand for housing is so high and the demand for flexible housing is so high. You know, people don't want to have uh you know several buildings with different purposes, they want all the purposes self-contained. So you take your cars and your toys and your boats and you put them all in the same place where you're sleeping and you're sleeping above. That was the origination of the idea. And I give you and Rob Sampson credit for realizing that, and thank you for coming to me to make it real. So we've made it real. And it's a box. I mean the the institutional part of this is to simplify the manufacturing and delivery of the box. That's where we are. When we started to get into the interior design of it, which is a lot of fun, but everybody has different desires, standards, you know, things it's like designing a custom home inside a box.

SPEAKER_04 36:58

Right.

SPEAKER_01 36:59

So, you know, how many uh shower heads do you come uh do we need in our shower, honey? And how many, you know, how how many kitchen cabinets do we need? So none of that really matters. What matters is uh the simplicity of the structure. So the structure in our barn cave design, the smallest one, twenty-eight by seventy-two, is ridiculously simple, and I'm surprised it hasn't been done on a more rigorous basis before. Twenty-eight foot a simple span outside wall to outside wall, which means that every floor, you go up three floors, every floor is open. There are no internal columns. You have no internal columns on the lowest level where your RV is or where your car or your helicopter, you you you slide them in and they're there. And they're they're there, they're protected, they're safe. You go above and you've got an open floor plan, a living level. Living room, kitchen. You can make it anything you want within that particular level in that particular box. You go up above, your bedrooms, your bathrooms, you can reconfigure that. So it's the simplest way to do this is to design the structure, which we've done, and put it out there in its simplest form, deliver it to the site, it's a kit of parts. You stack it up, you build it, and there you have it. You if you want to get your own interior designer to design the interior, as long as you've got the power and the plumbing, you know, the sewer line attachments, go for it. Yeah, do whatever you want, be creative.

SPEAKER_02 38:34

Yep. And that was the point when we brought when we brought you on, was more I want to build that box a certain way, and then we'll we'll do with the finish work, which we have. And then the same thing, if we have a builder or a buyer, we'll work with them on the on the finish work, and we're gonna give them options and you know, flooring and cabinetry, all the fun stuff. We even created it in a way where you know all these people get the opportunity to have that experience when you go to a builder and you build a new home or buy a new home where you can you know pick your flooring and stuff. We're doing the whole experience, so a lot of people get the opportunity for that. But to go back, and I wanted to kind of I want to make sure that I stated this because we I don't think we were that dead on about this or delivering this type of impact and why. So when I always tell everybody, the reason I named the company Paradigm is because for whatever reason, I've had this intuition that I've been able to shift ahead of things that got bad. I tell everybody when you're in the private markets in the mortgage-backed security world, and this is where I think a lot of people don't know this, but the mortgage-backed security world is where a lot of our government money and insurance money is actually buried in buying mortgage bonds. So when you have the mortgage backed security world, if I'm having a problem selling my notes and my buyers are fading, and my buyers, a lot of them are out of this country, and my buyers start fading, that means that the market's gonna shift within the next six or seven months. You're gonna it never hits the ground right away. It always takes a little bit of time, you know, from rate shock or what have you, right? So interest rates went through the roof. Wait, give it like a couple more weeks and no one will ever talk about the interest rates hikes again. They'll just hope that they're gonna come back down, but the market's gonna level out, and then everyone's just dealing with whatever the market is, right? So it's always that shock, and then once the shock fades, it just kind of goes back to like a different reality. Everyone just accepts. But what we have to do is how much will that change the outcome of people's habits or when I say habits, decisions? Um, fear drives a lot of people. So when you look at where we are in a war, if you were talking, if I was talking to an investor three or four years ago, the number one conversation is hey, what if 2008 happens? You're gonna what if we go to war? Well, now I'm talking to people like we are literally at war with a high interest rate environment. And I just sold the largest man cave in history in Lake Havasu for $700,000 at $185 a foot when I thought we were gonna sell these at $145 a foot. It is it what happens is this fear drives people, but then you track what they're spending their money on. I and people hear me talk about it. I watch baby boomer spending habits, healthcare. That is such a black and white thing that's going to happen. People are gonna start making decisions on where they're gonna move their money, they're gonna have fear. So if they do have fear, they're gonna make the move. And what are they gonna make? Normally they're gonna lower their overhead, start planning on retaining the wealth that they've created. All of my investors are boomers. They've already gone through the 2008, they've already gone through the divorces, they've already gone through cancer scares or have lost a child or a loved one. These are the people that I talk to every day. My investors, I've I've literally lived their life journey with them. When you have money, like, and a lot of these people have a signal, you know, think about it. A lot of people, especially boomers, most of their money is allocated, their wealth is allocated to real estate. It's very common, especially the average working family. They made their wealth, they've sold houses, they've that's where their wealth really came from. They used it and made good decisions, and now they're you know growing their wealth. But a lot of it's buried in real estate. So we are the first call that these people make when they go through something or they have fear. And then they tell us what they're doing in their lives. So it's not only am I watching what's happening in the market and watching the data, I am literally boots on the ground talking to people every single day about what they're doing, how they're maneuvering, focus on taxes. And now I'm like, okay, well, we'll just pivot where the most common conversation is leading.

SPEAKER_01 42:28

You're becoming an investment advisor.

SPEAKER_02 42:30

That's exactly what's happening, but it just can't be an advisor because we're not like securities license. But you know, at the end of the day, that's exactly what's happening. We're just pivoting the firm and then building awareness. And what happens is the reason why the success is there is because it just the stars align for people. You know, the ones that are are going through certain things, they look and go, okay, cool. Like steel building methods are going. Fire protection is a big deal. Look at all the fires that happen in California. Okay, barn dominiums are cool, like it's trendy. Yeah, the price point compared to everybody, everything else out there is about online or maybe a little bit cheaper. I can get this, second homes. Like it's just it continues to align the stars. That is how I'm pivoting my firm. And so going back, the reason why we wanted to build this, and the ri you know, mind you, these are small lots. These are kind of that. I hate to say it because I think this is so cheesy to say this way. I don't know another way to say it. The tall, skinny product, right? I hate to say it because I think people just have a really weird stigma about it.

SPEAKER_04 43:26

Right.

SPEAKER_02 43:26

But it works and it works great, and people love it because when you look at people going from a big overhead in California, they're gonna go to let's say they come out to Habasu and retire, they want to lower their overhead. Less maintenance, less overhead, they want solar, they want it, you know, power bills are only going up. Let's put solar on the property, right? It just do all the right things. So what happened was is, and this is dead honest, I wasn't a fan of the last administration. I watched the decision making that was happening there, and I fear too. And I thought that inflation was going to go through the roof. Look at where we are right now. The idea was to try to create a product that we can build through an inflationary period, even some sort of recession, which it's funny because no one wants to talk about a recession data, and we can talk about that. I'm sure you and I can talk about that right now for a long time. For a while. And you've been through this what, three, four times now? Yeah. We talked about that the other day, having a cigar, going like, yeah, we we're this is the you very unique time. Point is I want to be able to build something that people are going to want, but they're going to move to, and they need it. So it's a commodity almost.

SPEAKER_01 44:35

Well, it's the right time because you know the population is aging, right? So, you know, people my age now are not trying to acquire things, they're trying to consolidate.

SPEAKER_04 44:45

Yeah.

SPEAKER_01 44:45

So it's the time is right with an enormous demand for some form of housing that consolidates your life, where you can keep everything under the same roof. And to to have a formula for success here is to really mass produce a system, whether it's panelized construction, whether it's a steel frame with which is a big movement in itself, like you just brought up.

SPEAKER_02 45:11

It's getting bigger and bigger.

SPEAKER_01 45:13

And you know, where do you buy the steel from? And how can you acquire it at a reasonable cost and work it into the new paradigm and make it happen? So that's where we are, and we've figured it out. I mean, we have it figured out in terms of the structural integrity, in terms of the spans and you know, the connections. We even have you know floors between the the lower level where you store your vehicles and the main living level, the living room in the in the kitchen and all of that, where you can have a glass panel and you can look through the floor. And the glass panel and the floor system is that's an option, by the way. It's an option, right? It's an option. But it but the one-hour fire rating is met even with glass in the floor.

SPEAKER_02 45:57

Yeah.

SPEAKER_01 45:57

You know, I think it's kind of cool to look down and see your your cars.

SPEAKER_02 46:01

I think it's the killer people uh that's why it's so hard to I'm gonna have Joe edit all this in so people can see it on the video, right? Because that's the only way, because we could talk about you and I can visualize it even doing it. We go back and forth. But like to be able to walk over your second floor, and by the way, you're gonna buy this for an affordable price, right? And you're able to look down and see. Well, I don't care if it's the top of your RV in the air conditioner, if you want to see it, you can see it, you know, see your boat, see whatever. But everyone loves that idea, and just the fact that you can go, you know what, how much is that? And you're like, well, the only upgrade is XYZ, right? Right. But like, just put it in. Like, why not? Just put that in, you know? You can finance it.

SPEAKER_00 46:38

You can do it later, or you can do it now.

SPEAKER_02 46:39

Yeah, exactly.

SPEAKER_00 46:40

It's easier to do it now.

SPEAKER_02 46:41

And that's what the point is like, do you want a bathroom down in the garage? Do you want more air conditioning? Do you want, you know, just the the anyways, keep going. But there's ways to configure that properly.

SPEAKER_01 46:50

And and so we we've had so many great ideas that we've discussed and worked into the designs, even the prototypes, the the pneumatic elevators, case in point. I mean, you you come into your barn cave, whether you're driving in or walking in off the street, and there's an elevator there, but it's a glass tube. It's like going to the bank and you're putting the cylinder in the tube and letting it suck you up. So you get in the glass elevator and you hit the button, and it slowly moves you to the second floor or the third floor, but the whole time you're in a glass tube, so you get to see everything around you as you progress. And it's a cool ride. Same thing coming down. I mean, and it's noiseless, right? There's no quiet. It's so quiet. No, it's peaceful. No plungers, there's no safe. Yeah. All you have to do is have electricity and make the pump work and it sucks you up and lets you down. It's it's really cool. And we're using that same con concept at at our project called White Cap down in Corpus Christi, where we have 630 homes that are being built right now, and the elevators are the coolest thing.

SPEAKER_02 47:57

Which, by the way, just so everybody understands this, this is these houses have their own waterways that are man-made.

SPEAKER_04 48:05

Right.

SPEAKER_02 48:05

And you literally have your own dock, you put your boat or your center console, whatever, and you can cruise out into the open ocean from this place.

SPEAKER_01 48:12

So, and you know it's unbelievable.

SPEAKER_02 48:14

And by the way, what were the prices?

SPEAKER_01 48:16

Oh, the prices, we'll we'll get to that. And so the concept is what drives the cost. And how we did this, we had to go to the city of Corpus Christi and get a special zoning exception to do this. So we had a PUD approved planned unit development. We had 300 acres roughly, we tore down the old Schlitterbahn water park, we tore down the Waves Resort Hotel, and this is in North Padre Island, so immediately across the JFK Causeway, when you get to the south end of the bridge, there it is. So we took out a golf course, we took out the water park, we took out the hotel, and then because we had the Gulf of America on our left and we had the bay on our right, we created three miles of canals. And the canals, you know, they're only eight feet deep, but that's all you need to float your boat.

SPEAKER_04 49:09

Yeah.

SPEAKER_01 49:09

So we have two front yards. You have a front yard where your vehicles come in, where your garage is, or your main street, yeah. And then you have your back front yard. So your front yard where your boat is. And this was the coolest part of the concept. You end up investing in a house or buying a house, even if it's just a summer home or an Airbnb, but you you have two front yards. And in the in the design of residential buildings where you have a priority on privacy. So you have the public space on the road, and the public space in your front yard, and it goes to semi-public at your front door, and it goes to semi-private inside your front door when you're in the house. But to get to the private private space, you've got to go up to the bedroom level. So from both ends, you're going from public to semi-public to semi-private to private from both regions. What that does, it drives your vertical circulation to you know to the center, and that's where your elevator is. So you put your glass elevator there with glass on the walls so you can actually see the Gulf of America and the bay and the bird sanctuary and everything else as you go up. It's the coolest ride ever.

SPEAKER_02 50:26

Just so you know, Joe's over here. By the way, everyone knows Joe's my boy, right? So Joe's here doing all of our audio. While you're talking about that, I've never sent Joe Whitecap yet.

SPEAKER_04 50:36

Oh, wow.

SPEAKER_02 50:36

So I just while you're talking, I jump on my phone and I send it to him, and he look, I see his whole body language change. He's like, wait, hold on. That's whitecap. Obviously, he's gonna edit this in. That's why I sent it to him for right now, so he can edit it in. But it's I mean, it says starting at 300,000. Now that's a lot, right?

SPEAKER_01 50:54

That's the lot. Okay, so but 300,000 it buys you a 45 by 90 lot, which is basically what we have at Barclays.

SPEAKER_02 51:03

We talked about this. I know, I know. This is how much I keep telling everybody how much this is morphine.

SPEAKER_04 51:08

Right.

SPEAKER_02 51:08

So think of like I tell everybody, I went to Costa Palmas, we'll talk about that. But think of uh, and I know this is probably a little over the top, but the palm tree island in Dubai.

SPEAKER_04 51:19

Right.

SPEAKER_02 51:20

It's basically kind of it, right? On one side, you have your dock and you have, like you said, that two front yards.

SPEAKER_04 51:25

Right.

SPEAKER_02 51:25

You have your dock, you got your in essence backyard, but it's a front yard because you can come on with your boat and that's your front yard. Or you come down the main street on the other side of the building, and then you have your street and you have your garage and you pull into the your front of your house, right? It's just when I saw that when we were in Texas, right? I met the builder, I met the developer, and we sat there to talk about capital markets and what they're doing and how they're doing it. And I got a chance to really get to understand how they're doing that, and I thought it was just a brilliant idea.

SPEAKER_01 51:52

Well, we And they broke ground, they're up, right? Oh, but yeah, we've got the first five prototypes built, and the open house is October 29th of this year. So showcase of the plan on being there. They're front and center. Yep. And you know, we got lucky in a in the sense that in the course of getting the PUD approved from the city of Corpus Christi, they gave us an $800 million PID. So they're public investment funds that bonded it. $800 million. $800 million. Who should who who negotiated that? Who'd you bring in for that? Well, the bank. So IBC brought that in. IBC owned the property.

SPEAKER_02 52:24

And I met the bankers, right? I've introduced you.

SPEAKER_01 52:28

And then they are cool people, and they're and you know, they ended up taking the property back in in a you know, so they worked a deal with the data. So Schlitterbahn, that particular location for Schlitterbahn couldn't survive the pandemic. So they gave the back to the bank. So the bank said, Stephen, what can we do with non-performing assets? Yeah. So we created shocking.

SPEAKER_02 52:51

Weird how that works out. Oh, let me go bring in a better developer. And that was your builder, right? Your developer. So that was your relationship with the bank.

SPEAKER_01 52:57

Yeah. So actually, actually, my relationship was with the bank. The bank put three or four different developers in front of me, and we had many meetings before we landed on this particular developer, which was the Ashlar company out of Dallas. So we landed on them and they took the project with our designs and carried it forward.

SPEAKER_02 53:18

And there's a lot of secret kind of content with inside this conversation that I want my audience to see when I'm hear or listen to, right? Was um when I said an architect that understands budgeting, you have a bank that's going to an architect to say, hey, who's builders and what developers can we do for this? That's the the these are the kind of the little things that I want people to know. Because anyone who's a builder that's probably listening to this, and I have like 50 people I already know that drive back and forth to Havester that listen to my podcast, and they're gonna laugh when they hear this, because these guys are builders and developers too, right? And they're they're gonna be like, wait, hold on, an architect that cares about your budget? Wait, where's that? So you got an IBC multi-billion dollar management bank in, which is one of the largest guys in Dallas.

SPEAKER_01 53:58

They're both in Oklahoma, but they're all over Texas. Yeah. So it's and they're they're a great bank and great people. But every bank has non-performing assets. They've taken things back in foreclosure, and there's a waiting period. They sit in a folder for three years before they can do anything with it. But when they finally can let it loose and say, what do we do? What's highest and best use? It's nice that they come to meet to say what's highest and best use.

SPEAKER_02 54:21

Well, because you're gonna know who's actually got the bandwidth to do it. You know, they're gonna approach you, you have all the builders and developers calling you, going, Hey, I want to do this, I want this. And if you have someone who's able to identify land and good deals, that that's all builders and developers want because that's where it starts. Yeah, acquisition is where it is. You know, that's I my uncle he told me the money's always made on the acquisition and on the front end. All the upfront work is where the money's made.

SPEAKER_01 54:45

That's right. Yeah, it's true. And a lot of people bail out after the front work's done. That's rezone it, get rid of it. That's what happens in a lot of developers. That's why I I don't like that model because my good ideas that are on paper get on the shelf if they get out too early.

SPEAKER_02 55:00

Yeah, and so I want it built. And some builders, there's sometimes the developers will out oversell the land and then builders can't make a pencil. Right. And it sits.

unknown 55:07

Right.

SPEAKER_02 55:08

Yeah, so it's becoming a pencil. Yeah.

SPEAKER_01 55:10

But we've got this one up and running. I mean, it it took about I think we spent close to 15 million dollars building the canals, digging out the sand. And all we did was take the sand from here and put it over here and level it so we're building on it. But we created an eight-foot deep trench times three miles of it, and it's open at both ends to the Gulf of America and to the bay. So whatever little boat you have, there you're limited on the size of your boat because of the bridges. Yeah, right? You got a you got a bridge, and you got a boat. You both got to get under the bridge. So I think we're limited to something like a 20-foot boat.

SPEAKER_02 55:43

It's that you can but you still got a boat there. But you can go hang out and go do your thing. Yeah, how cool is that, right? It really I think it has to do with height, right? It's more height than anything else, yeah. Yeah, so how cool. So, all right, so let's go back to the barn caves. So,

Zoning And The Shift To 93 Homes

SPEAKER_02 55:56

again, the concept was you know, boat and RV storage, right? When we bought the 18 acres, I was trying to build basically Paradigm 2.0 and listen to my phase one buyers that had the larger units with all the infrastructure to customize and put bathrooms and showers and kitchenettes and man cave them out. They all wanted to go out there and stay in them because they were so nice. The insulation was incredible. I mean, those things, when it's 115 degrees outside, it's still 75 degrees inside there. And it is incredibly great how that building was put together. So we looked at it and said, okay, well, we can't build these things fast enough. Our buyer's market is huge. Let's go ahead and do 2.0 on 18 acres, which is only a little bit bigger than what we had. So the city, though, put a moratorium on building more storage with inside the city limits if it wasn't already zoned by right. Right. So we're like, okay, well, everybody wants to be able to live in these things. Let's see if we can just build maybe a little studio above the you know, garage and maybe have it shared walls similar to what we're doing, but the city wasn't liking that. They still looked at it as storage. They they looked at it was the living space wasn't as big as the garage. The garage space was bigger than the living space. And even though that's kind of a weird comp because that's like half of the houses being built out there right now, the garages are always bigger than the houses, but because it was above, they just looked at it as like a flex space. So therefore, they wanted to zone it commercial. And that's going to limit your buyers. You can't live in it, obviously, right? So we the idea was to try to get it financed. Now the price isn't going up. So for my background, I'm going, well, look, hold on. I'm already, I feel like I'm already walking the line with my current storage units. I've selling them for the lowest was like 125, and my highest is going up to like 500,000, even though the largest one I just kind of bragged about, but that's not there's only one of them, right? So, but all the other ones were like the 300,000 range. And once you start pushing above that, you know, you and if in most of my buyers are cash, you're gonna start limiting your buyer pool. You want to be able to figure out a product that's gonna be able to get financing, conventional mortgage financing. So we wanted to make sure it was SIF or S SFR, single family resident. We wanted to make sure that we can zone this properly. So, and then obviously when you sit down through your pre-app and you start talking to all your utility groups, right? And they're like, Well, we want this much land and these money easements, and you're like, Well, shit, you just ate up 30% of my land, dude. You know? So, okay, so now let's go. So it got to a point where I was trying to make them a little cheaper. That was really the idea, was to try to do about 140 units instead of the 93 that we came up with, because we wanted to try to compress the cost of these. That was the goal. But as we started working with the utility companies, how much they needed, we were like, okay, we got to kind of make this more like extravagant. This needs to be more of a luxury product, but we got to figure out a way to compress these costs and try to deliver a lower cost home. But with all the bells and whistles that no one's ever seen before, and get that kind of hook. And that's why we landed on what we landed at the 93 units detached, larger, I went with larger garages, more extravagant with a third story. I had to get that third story on there to get the living space that I knew we needed, which is gonna allow me to get to that single family resident conventional mortgage exit. And that just took root. And what happened was just like I tell everybody else, I go to I have I always have a handful of investors that always go into every deal that I start. Every single one. This is friends of mine, what have you. I'm gonna go into every deal Ryan touches. So I sit down with my advisory board, that's probably the best way to put it. I say, guys, here's here's the financial structure, here's the product, what do you think? Here's some you know, drawing and renderings that we you know kind of came up with, and they all fell in love with it. Yeah, and the reason why is because when I say they're involved in every deal, they're involved in my SIF too. They see that I'm funding these deals, right? There's a storyline here. There's a reason why we are doing what we're doing. And as they were looking at the data and the feasibility studies, because we spend the money on this stuff and we want because look, I look, I know I'm biased, right? Let's be real. I'm a grown man that loves Legos. I loved Legos when I was a kid. All my kids love Legos, they still love Legos. I look at a piece of land and I'm such a dude, going, Ah, we can build that and we can build this. I'm a guy, I'm gonna build a man cave. And I mean, come on, man. I'm just such a normal guy, you know? And so I but I know that about myself, so I gotta do the research, and the research just won't lie. So as we do the home, we do our homework on it, and I sit down, I look at it, and I go, look, all we gotta do is pitch these roofs and make them barn dominions, and it's gonna take a hook. Because mind you, Paradigm Storage, my last building, I named them, I named it, I named it Millionaires Row. And just because I named it Millionaires Row, I charge $200, almost, oh I'm sorry, $15 more a square foot.

SPEAKER_00 1:00:39

Right, just for the name.

SPEAKER_02 1:00:40

And they're already got I got a line of people that want to buy just because of Millionaire's Row. So if you're an investor behind the scenes, you're like, great play. Buyers are like, I just want to be a part of Millionaire's Row because I want to be the guy that's in Millionaires Row.

SPEAKER_00 1:00:53

I want that medallion.

SPEAKER_02 1:00:55

Yeah, and don't get me wrong, we're making it nicer too. 16 foot, longer, deeper mezzanines, whatever. So you're really getting there's it's worth the price, but you gotta you gotta you gotta create that polish, you know. And that's where pair that's where we morphed into the barn caves. So now we went up to the third story, and I want you to talk a little bit about the design from the second floor and the living space, and let's talk about the living space, and let's talk about the solar, let's talk about the air conditioning.

Fire Safety And Code For Living Above Vehicles

SPEAKER_02 1:01:20

I want to talk about all those products because those are important too.

SPEAKER_01 1:01:22

Well, we had many uh issues to address. So we ended we ended up when you when you and Rob came to me with the concept, and we'd already had a series of renderings and ideas on paper, but one of the things that was um a concern uh right at the get-go was how do you park your gas vehicles in the same space where you're sleeping.

SPEAKER_02 1:01:47

But with fuel and then above you, yes, and you're above it, right? So let's go back. I'm sorry, I don't want to interrupt, I'm so sorry. But I want people to know, and if you look at Lake Havisu in general, that are building RV garages, they're always next to the living space. Next.

SPEAKER_00 1:02:02

Yes, right.

SPEAKER_02 1:02:02

It's one story is next to the living space. So you have your fire rating wall. We had this is again why I wanted to hire a group like you, because you're talking about that much combustible stuff above the living spaces above.

SPEAKER_01 1:02:18

The old paradigm. The old paradigm was that you park your car in your garage, and then horizontal to that, you had a one-hour firewall, and your living space was on the other side of that vertical wall. To have your living space above you, you still have to have the one hour separation. So let's go here. There are many you know, aircraft hangars, even private aircraft hangers, that people would build all over these private air airstrips, and they would put uh a mezzanine in it and a bedroom and a bathroom, and it was in the same airspace as as the plane. Well, that's a no-no, and people get caught doing that all the time.

SPEAKER_02 1:03:01

People die, that's why and people die.

SPEAKER_01 1:03:04

Yeah. So the codes are the codes for a reason. It's protecting people's health, safety, and welfare. So in the case of the barn caves, we had to address that problem. So we solved it and we were able to get past the International Building Code and the International Residential Code because we held we held as you know, sacrosanct the one-hour firewall above the vehicles. Not the best solution, but it works. And then to just make it super safe, we added sprinklers. So that way, if anything happens, now you really never want to throw water on a gas fire, but you have the ability to put out the fire and to get the people out. Getting the people out of the building. That's the that's the point. So when we redid the new paradigm, the new paradigm was to get away from the one hour vertical wall separating your bedroom from your garage to the horizontal one hour to separate the living space from the parking space. It wasn't difficult to do. We did it, we just had to do it. And even the idea of you know a glass panel or a plexiglass panel or some side of some sort of lexan panel that you can look through, as long as it was the one hour met the rating, then you're cool. So now going back to the modularization of the barn caves, the with the population uh getting older, with people consolidating in large numbers, trying to bring their toys home and live with their toys and not have so much landscape to deal with or property to deal with, it's the perfect time to systematize the delivery of the product. And that's what we're doing. And you know, a year ago, when we did our last podcast back in August of last year, you had something like 80 or 90 reservations for the barn caves. And today you're telling me 1200.

SPEAKER_02 1:04:56

We have 1,200 people on a waiting list. It's incredible. Yeah, 48 investors have already invested to choose the lot that they want. Yeah. But you have I'm telling think about it from an institutional side though. I'm sorry, because I don't want to take off.

SPEAKER_00 1:05:08

Oh, that's good.

SPEAKER_02 1:05:08

But I have 50 of them, I have 50% of mine already pre-sold with investors that have invested a minimum of $100,000 to lock up that lot. Yeah. I mean, and well, there's tax plays involved, we'll talk about that later. But the point is that that that's the desire of this product. You know, keep going.

SPEAKER_01 1:05:25

Well, it's and it's to you know, I go back to the Sears and Roebuck thing. You know, you could basically have a catalog of you know prototypical barn caves ranging in size from 28 by 72 to 40 by 90. But tell me what you want. And tell me what size box it is. Right. We'll deliver it. Yeah, in what lot? Yeah. Give me it, yeah. Yeah, where's your where's your property? We can do it on your private property, or we can do it as part of our subdivision. You just tell us what you want.

SPEAKER_02 1:05:54

Yeah.

SPEAKER_01 1:05:54

And then it gets delivered. And it doesn't matter if it takes three trucks or four trucks, the steel arrives and you put it up and you panelize the siding and you slap it on and make sure it's, you know, safe and structurally sound. What we did with the prototype Barncave, we had to design it to the worst possible condition. So we took all of the worst possible um wind speed conditions.

SPEAKER_02 1:06:17

So let's go back. Why though?

SPEAKER_01 1:06:19

Well I told you I was going to go big with this. Yeah. So we want it, we want at least the prototype that we've designed to fit whatever location they want to put it in.

SPEAKER_02 1:06:30

Any any planning department, any state, county, yeah.

SPEAKER_01 1:06:34

You can do it in Utah, or you can do it in Denver, or you can do it in Florida. You know, imagine where the highest possible conditions to be met are. They're along the Gulf Coast in Texas and in Florida. They're along the East Coast, the West Coast, you got earthquake conditions in California. It's designed for the least common denominator, the worst case. Now, in reality, you can save some steel. If you do the Geotech and you get a smaller foundation and you get smaller steel sections, all you have to do is hit that button on the computer and it generates a different prototype.

SPEAKER_04 1:07:11

Right.

SPEAKER_01 1:07:12

And there you have it. You're ordering a different unit. But you can deliver it to the site on a bunch of trucks. And as long as you have a certified builder, you can get them built.

SPEAKER_02 1:07:21

You know, and that's a that's another thing. I you know, I want, and this is gonna, I'm gonna kind of go back and forth because this is important. I feel I feel bad, everybody. We're gonna go in through this, we're going down rabbit holes, but this is really the point. I want everyone just to kind of relax and listen to this because this is good, we use this is how we are. We just go back and forth. The this is what caught my attention, because I don't know if I got a chance, I don't think I brought you on yet or hired you yet, but you told me about a home that can withstand hurricanes. Yes. And so I want so this was a big decision making. So I again let's share about that, and then we're gonna talk about why then we went to H O K our engineer. So go ahead, bring that up. Go ahead.

SPEAKER_01 1:08:01

So very briefly, um right after Hurricane Ike came through Galveston in on September the 13th of 2008,

Building The Simple Span Steel Prototype

SPEAKER_01 1:08:10

I had a high right. Yeah, that's right.

SPEAKER_04 1:08:13

Yeah, you know the date. I know the date.

SPEAKER_01 1:08:16

You know, we were without power for two weeks in Houston. So September 13th of 08, Ike came through, and we had a seven-story condo building under construction. Five stories of the concrete frame were built, and they were we were basically pouring a floor a week. And, you know, bam, the hurricane hit. The storm surge came in, went out through the building, came in through the building, went out through the building, came in a second time and out through the building, and I was just concerned. I couldn't get onto the island until the Texas guard said it was safe to come on the island. So it took about five days for them to let me on. I ran down there to check on my building. So it did exactly what it was supposed to do. That's the Diamond Beach project. So it was fine. I was so relieved. However, what happened is that as a result of Ike, the wind speed criteria were changed for all buildings on the coast. I'm sure and you know the storm surge height was changed, so anything on the island its livable space has to be on stilts elevated to 17 feet above above sea level. So we went through that whole metric. So we got to the point where because of continue the continue evolution of prices, codes change. So here we are now dealing with how do you do with barn caves and what codes do you meet? So we designed it to worst case.

SPEAKER_02 1:09:43

So and that's why the lid's 19 feet tall.

SPEAKER_01 1:09:46

Correct. Yeah, so this correct.

SPEAKER_02 1:09:48

This yeah, keep going. Yeah, this is why I want everyone. Right. How serious this really is.

SPEAKER_01 1:09:54

So if you're gonna put one of them on the coast, you're golden. You're gold.

SPEAKER_02 1:09:57

We can make it work.

SPEAKER_01 1:09:58

You can stay on the upper floor, just watch the tide coming.

SPEAKER_02 1:10:00

That are steel structures. Keep going. I have a guy, just so you know, I wasn't even gonna bring this up. I have a guy in Key Largo that reached out to me that's got he's owned this land for 30, 30 years. It's really close to Miami. And it's like the it's basically it's the Manhattan, or it's like the yeah, it's the the call the Hamptons of like Key Largo, right? And he wants to partner with us to build these basically the barn caves on this site, and then he has you know, he has docks and fuel and all this stuff coming in. He where him and I have been going back and forth where he wants us to put the buildings up there. So this is how much we've talked about this in length about what goes on out there when it comes to storms and so forth. And he's like, this product will go perfect right here. It'll just stamp right on. Anyways, keep going though.

SPEAKER_01 1:10:40

Well, so you know, what we've designed as a prototype, you know, it has a steel frame, it has panelized siding that meets the energy code, right? You have a certain condition we have to meet, and um, it meets the air quality standards, it has a a gabled roof, it's shallow pitch, right? Because it's already 45 feet tall. We don't want to go taller, and we can go shorter. You can do a two-story product or a three-story product, you can do the flat roof pitched in one direction, a shed roof effectively, and you can make it look more contemporary. You can do all that, and you can put the solar panels on the roof, the structure's designed to take the load. You know, people come to me, and even in my little wood stick neighborhood, and they try to sell me solar panels all the time, and I laugh at the guy at the front door. I said, Okay, what do they weigh per square foot? He doesn't know, right? So my roof is designed for you know 20 pounds per square foot of dead load, shingles and plywood. It's not designed to take another 40 pounds per square foot for solar panels. And I laugh when somebody next door buys the solar panels and their the roof starts to sag, and they call me and say, you know, what's wrong with this? I said, Well, you've got to sister up all your all your trusses and on all your rafters because you shouldn't have done that.

SPEAKER_02 1:11:59

Yeah. Well, not a lot of these guys now are getting smarter. They'll just what they do, they're like, they'll give you a 20-year guarantee on the roof and redo your whole roof, and then like, yeah, it's wild to see what these guys are doing.

SPEAKER_00 1:12:10

It's so silly.

SPEAKER_02 1:12:10

Um, but yeah, keep going back as far as like I want to I want to keep going about um like uh what happened in Galveston during that, and then go back to the design of the what leading up to well when the hurricane came through in 08, I I ran up and down the island, drove up and down the island, and all of the single family homes were wiped out. Destroyed.

SPEAKER_01 1:12:30

They were gone. We've seen some famous photos where there's one house standing on Jamaica Beach, you know, for miles.

SPEAKER_04 1:12:36

Yeah.

SPEAKER_01 1:12:37

So I started to say, you know, why is this? And why is it that the insurance companies, even if you can get hurricane insurance, why is it that the insurance companies only give you enough money to build what you had?

SPEAKER_02 1:12:51

Yeah. Exactly.

SPEAKER_01 1:12:53

So, you know, this is insanity. So your house gets wiped out. If you have insurance, they'll write you a check. But it's the value of the house prior, it's not the new construction cost. And then you build exactly what just got blown over. And that's insanity. So I I took some time, went into my studio and designed something that I call the Hurricane House. And I'll sh I'll send Joe the video of this. So the Hurricane House is an aluminum house with a polycarbonate rail. So just to describe it briefly, it's it's stilted, it's up on a concrete platform. The concrete platform 17 feet above sea level, has a circular polycarbonate rail, and the house is designed aerodynamically, where the rail is attached to rollers, basically, like on a roller coaster. So you the rail is gripped.

SPEAKER_02 1:13:50

So it's it's be it's held on the rail.

SPEAKER_01 1:13:52

Yeah, so if I'm if I'm the rail, this this is the the s the slide. Yep. So the the rail is embedded in the

Wind Loads Earthquakes And The Hurricane House

SPEAKER_01 1:14:00

concrete in such a way that you can move the it's just like a roller coaster. You know, roller coasters go upside down because you have the ability to do that. Right. So when you have that figured out, the wind speed determines you know how much pressure is on the house. So if you know what you're doing, the house is aerodynamically designed, just like at the airport where you've got a wind sock and it tells you what direction the wind's coming from. The house rotates, rotates on the rail and it into the wind, so that the smallest part is facing the direction of the wind and the largest part.

SPEAKER_02 1:14:35

And the utility lines are still tied in.

SPEAKER_01 1:14:37

Yes, and we designed that so that the utility lines fracture and break at specific locations at specific points. For example, as the house rotates, the uh the water feed is valved. You turn off the valve here, you turn off the valve here, you have an umbilical in between, and it will rotate to a certain degree and then break, but it breaks here. It doesn't break everywhere. Sewer line, same thing. You've got a fernco connection and a valve and a valve, and it breaks within 18 inches, you know it's gonna break that three-inch diameter plastic pipe's gonna break. The electrical is on an umbilical, you can it'll go whatever way it's just an umbilical, yeah. And so when you come back, after you've been told to leave the island, you you basically pull a cotter pin and let the house go. When you come back, you get on your computer, you push a button, the battery-operated you know, engine that drives the house back into its original position, you put your cotter pin back in, and all you have to do is replace 18 inches of pipe, and you're back. You don't have to replace the whole fucking house.

SPEAKER_02 1:15:46

Yeah. No, but but how but but talk about safety or insurance, that's an insurance play, too.

SPEAKER_01 1:15:53

It is, that's a big deal. So the the people who should be investing in this idea are the insurance companies. Yeah, they're the ones who have to pay out of pocket every time some disaster happens. You wouldn't have to do that if you would get behind this.

SPEAKER_02 1:16:07

Yeah.

SPEAKER_01 1:16:07

So there's there's the insurance company.

SPEAKER_02 1:16:09

Well, it's funny because when we were out there and we went to the Tierra, which I want to talk about that, because that that thing is that that property is unbelievable. And Joe, Joe, were you you were with me too? Joe was with me. Joe's with us, he was with us, yeah. He sure was. And uh that project almost completed. But when we went there, the one there that him and I were talking about, we were driving by, I'm like, that is basically an RV garage underneath the house, but it's on stilts, and we knew why. Right, right, it was because of the hurricanes that came through there. But I'm like, that's where everyone's parking, they're parking their cars underneath their house.

SPEAKER_01 1:16:40

Yeah, that's exactly right.

SPEAKER_02 1:16:42

And so when you look at the barn caves, it's not just Habasu, boat, and RV storage, it can be scattered and peppered throughout the country. Unreal. So let's talk about the TR though, because that thing, that project is absolutely stunning. Um I would I'll I'll be honest with you, I didn't know what I was walking myself walking into that day when I got into got there.

SPEAKER_00 1:17:02

Yeah.

SPEAKER_02 1:17:03

And we actually missed the actual groundbreaking, right? We did when we got to the after party. By the way, Houston has traffic everywhere, just so you know, because we left hours early and we were hitting traffic everywhere. And I was texting like, dude, I'm trying to get there. I promise. There's traffic everywhere. Me and Joe are like, dude, this is the worst. We thought California traffic's worst. No, I'm talking Miami, right? Joe, Miami?

SPEAKER_00 1:17:29

Goodness, they're all on the road at the same time.

SPEAKER_02 1:17:31

Literally, yeah. We felt and there's construction everywhere, so it's not like this is getting any better. No, but we got down there, we're just a little behind. But anyways, you guys had a little off-site, and we drove by the site, but we it was not much to see during the groundbreaking. We got been there a few times. Yep. But, anyways, we we get to the the after party, and I was really impressed by the the the people that were there, the people that were running for city council. I mean, the the the banks are there, the equity partners are there, you know, the builders are obviously there, uh, their support team is there, and it was a very polished outfit. Um, but let's talk a little bit about that project, please.

SPEAKER_01 1:18:04

So the the Tierra, again, was one of these non-performing asset projects. So, again, the bank, in this particular case, IBC Bank, had taken that 2.8 acres right on the water, right on the beach. On the sand. They took it back in uh in foreclosure. Uh, it was supposed to be the second phase of the Diamond Beach product that you saw next door with the lazy river up. We had 115 condos in Diamond Beach phase one, and we were supposed to have another 110 in phase two, but remember this is in 2008, nine, and ten. So the developer, I won't name names, but the developer ended up having to give the unsold units at Diamond Beach Phase I back along with the residual lot. So it sat in a non-performing asset folder until the bank decided it's time to sell it. They sold it to my client, and this is the Satcha Development Corporation. Great people, they know what they're doing, and it's a high-end, you know, operation. So the Satcha people were then told by IBC Bank, this is who you need to talk to about what you do, what you do next. And at that point, we didn't even know if we were going to join it to phase one like we were originally intending, or whether we're gonna build a standalone building. So in those discussions, uh, it came out that he basically picked the land up. I don't want to say this too loud for song. I mean, it was normal. Yeah, discounted, it was way discounted.

SPEAKER_02 1:19:39

Acquisition is always where it's at.

SPEAKER_01 1:19:41

So so he says to me, What can we do with this? And I said, Well, let me do some sketches, and we we ended up with something that was phenomenally attractive. Some people call it sexy. Some people it's my word. That's that word. I I can I I propose it's elegant, right? Elegant is my chosen word. What we've learned by designing along the coast is that there's a huge problem, which is a vortex problem. So when you have high winds coming in horizontally to the face of a building that fronts on the ocean or on the gulf, the wind has to go one of three places. It goes up or it goes right or it goes left, and when it goes to the corners, it's at a very high velocity.

SPEAKER_02 1:20:30

So all that comes in at a little bit of a different angle?

SPEAKER_01 1:20:32

Well, it comes in, if it comes, if you round the edges of the building, if you curve the ends of the building, it's less impactful, less velocity because it it eases around. If you don't do that, if you have a square corner, you create a vortex which sucks the windows out of the building. So you've got positive pressure, you've got negative pressure.

SPEAKER_02 1:20:53

So it's I'm looking at the design right here.

SPEAKER_01 1:20:55

Yeah. So I made every uh I made it as feminine as I could, and it's rounded for a reason. It's not just me thinking I want a round building, it's it's got a functional reason. We're trying to to deal with the wind speed in the case of a hundred and fifty mile an hour hurricane. So that resulted in a building that had to fit on a very tight site. 2.8 acres, when you look at the coastal regulations and the setbacks from the water and the sand, you know, and the all of the setbacks from every direction, we could only build on about 80 feet of the property. So that's why the building is where it is. It's set back to meet the coastal regulations, and it's designed to take care of the codes and the wind issues, and it's uh you know, 10 stories, all concrete, post-tensioned, eight-inch thick slabs. It's a gorgeous building.

SPEAKER_02 1:21:54

Talk a little bit about the parking and why you always have two because we have three, we have three stories of parking, right?

SPEAKER_01 1:21:59

Two stories, two stories of two stories. So what happens is uh this is interesting. Well, you need you obviously have parking requirements, but so the parking requirements there were two spaces per condo unit, plus public parking, plus you know, the staff parking. So you factor that all in and you come up with I think we had 210 parking spaces when you do the math. 63 condo units times two, and then plus plus. So you get to okay, how am I going to park these people? Because they can't park closer to the beach than we are either. So it drove us vertical. So two things were driving us vertical. We had a parking requirement we had to meet, and we had the height for the storm surge we had to meet. So the um only way to do it was to have a two-story parking structure underneath the building. Okay. So the first level, so our grade is at nine feet above sea level, the second deck for parking is at uh 17 feet above sea level. So both floors one and two are still in the uh floodplain in the storm surge, not until you get to level three, the podium deck, where the first living units and the swimming pool and all of the you know amenities are, until you get to level three, you're out, you're out of the storm surge area. So that's what established the the pre the pre-concept for the building. And then we had to break the floors up to see how many units we can get. And that's we ended up at 63. Now the ones on the top floor, the tenth floor, the tenthouse units are larger, and uh they're expensive for sure. But we got it approved. It took four years to go through the PUD process to change the zoning, and it took part of that time to get the project approved. We started this in 2020. We got the permits in December of 2024 when we broke ground when you were there. And then here we are, you know, two years later, damn near two years later, and we're done. We've topped out, windows are in. It's a beautiful building. Yeah, and it'll be done in about six months.

SPEAKER_02 1:24:15

How crazy. These guys moved. They do. They moved. How big how many square feet is it, the whole thing?

SPEAKER_01 1:24:21

319,000.

unknown 1:24:22

Wow.

SPEAKER_01 1:24:23

It's big. The average unit size is right around 3,000, but the the baseline unit cost, you know, go buy a condo today, you could get a deal at 1.7, and then that's that's where your baseline is. Yeah, isn't that cool though? We have one investor who bought two penthouse units at 3.5 each and put them together and just said did he really want to open them up? Yep.

SPEAKER_02 1:24:44

Does he still have two kitchens? Is he still doing it?

SPEAKER_01 1:24:48

I don't, you know, I haven't talked to him recently. All he wanted to know is can he do it and open up the wall? I said, okay, you're on the top floor. There's no there's no load above you.

SPEAKER_02 1:24:56

Yeah, literally, that's easy. Yeah, no kidding. That's cool. That's normal. Yeah, it's these guys, that's how these that's how these guys are with that bought by storage units. Yeah, can I make my man cave bigger? Can I just buy the one next door and open up the wall? Like that is the most common conversation.

SPEAKER_01 1:25:09

And and that's an interesting subject because we were strategic about the window locations in the prototype barn cave. Now, if you do have two side by side, you can open up, you just have to be strategic about where the opening is.

SPEAKER_02 1:25:23

Yeah, perfect. So, in regards to let's go back to the barn caves, we're popping over the place here. So to go back to the barn caves, so we uh we have a 19-foot lid on the inside.

unknown 1:25:32

Yep.

SPEAKER_02 1:25:33

The way that you have this designed is we have a plate, right?

SPEAKER_04 1:25:39

Yep.

SPEAKER_02 1:25:39

Then we have how what's the distance between the plate and the actual first floor or the the bottom of the first floor, as far as the okay, so let's go there.

SPEAKER_01 1:25:48

So the the idea is if if zero is is the parking area for the vehicles, that's your first floor slab. The second floor slab is at 19 feet. So your your your door, your garage door, whether you have two doors or one, the garage door height is capped at 16 feet. So you can have a 16-foot tall you know vehicle come in if you need that.

SPEAKER_02 1:26:20

So these are which are a little bit bigger than our nor the normal 14-foot doors. That's why I want everybody to know. Yeah.

SPEAKER_01 1:26:25

So and a standard 14 will work, of course. So the structure is an open web steel truss that spans out to out, and that thing is at least 18 inches deep, and most of them are 24. So when you take two feet out of 19, you're down at 17, and there you have it. So, and that's it's as tight as we could make it with a garage door.

SPEAKER_02 1:26:50

So that's fire rated. Yes. Second floor is fire rated, but we have concrete that goes down.

SPEAKER_01 1:26:55

So yes. So what happens is this you set the steel, and the steel, those girders, I mean those open web trusses are 12 feet apart. There's a flange at the top flange of the truss, and it's you know, 12 feet between each truss. So you have a panel, and the panel is 12 feet by 8 feet. The panel is aluminum, it's you know, light gauge metal, it sits down in the flange. Boom, boom, boom, boom. It's modular. So you put the panels in. Then there's a fire-rated piece of plywood that goes down, and then you pour a two and a half inch concrete floor, and there's your fire rating.

SPEAKER_02 1:27:39

And that's what I wanted to tell everybody.

SPEAKER_01 1:27:40

Yeah.

SPEAKER_02 1:27:41

You now have a concrete second floor that you're walking on.

SPEAKER_01 1:27:45

Yes.

SPEAKER_02 1:27:45

This isn't like a this doesn't flex. No. This feels like you're walking on a slab.

SPEAKER_01 1:27:51

No, yeah. You you could jump up and down on it all day long. And it won't move. It's not gonna move.

SPEAKER_02 1:27:54

You won't even hear it.

SPEAKER_01 1:27:56

That's right. Yeah.

SPEAKER_02 1:27:57

That's and that's what I want to tell. Not only from protection and fire safety, but the fact that that second floor, when you're walking on it, has that component. You just it's you have concrete on that second floor. So you're literally walking on it's it. You know what I love? And the reason I bring this up is because I had a penthouse in downtown Nashville, and I was on, I think it was the 21st floor. And I just absolutely loved it. Of how I'm watching these other buildings being developed. And so when I walk around, I couldn't hear my neighbors. Now it's all concrete everywhere around me. And it was the coolest thing because it didn't it felt like I was on a slab. It felt like I was in a regular house.

SPEAKER_01 1:28:33

I mean, to be honest, you you can do anything in a big steel box to make it sound like a drum. I mean, you can be down below working on your vehicle, and if somebody's upstairs banging with a hammer, I mean, it's going to sound like a drum.

SPEAKER_02 1:28:46

Oh, yeah, you're gonna hear that, yeah.

SPEAKER_01 1:28:48

So you can't avoid that. But there are lots of ways to mitigate any kind of a noise underside, you know, underneath in the in the ceiling plenum where the where the trusses are, you can put bad insulation in, you can do anything you want, spray insulation up, acoustic insulation. You can do anything you want. Yeah, your noise level is unacceptable.

SPEAKER_02 1:29:08

And there, and that's the capacity that it has, it's already there. I mean, we're already doing the same thing with our other units. If people want to spray more insulation there, you can do that, what have you.

SPEAKER_01 1:29:16

It's pretty simple stuff.

SPEAKER_02 1:29:17

Yeah, I love it.

SPEAKER_01 1:29:18

And then when you get your your robotic sprinkler system, and we don't need to see there's another thing about the codes. Historically, the codes with sprinkler systems where sprinklers are required, when one sprinkler head goes off, they all go off.

unknown 1:29:32

Yeah.

SPEAKER_01 1:29:33

Right. And you soak the house. Right. And you basically destroy the whole house and destroy the whole house. Yep. But today, the robotic sprinklers, you you install one and it's it's activated on sensors, so it will locate where the smoke is coming from and directly shoot it from here to there, like a like a bullet. I mean, it just puts it out.

SPEAKER_03 1:29:54

Yeah.

SPEAKER_01 1:29:55

And you could have ten of those things, and one or two of them are going to shoot it out, but you don't have the whole house.

SPEAKER_02 1:30:01

Which is huge from a you know, a claim flame, yeah, acclaim side to ruining other things inside the house that have value to you, you know, those type of things. Yeah. Okay, so let's talk about um HOK.

Why HOK Engineers The Structure

SPEAKER_04 1:30:12

All right.

SPEAKER_02 1:30:13

Let's go into the more of the engineering side because I think everybody has already seen the design. You know, we could talk about the third floor in the master suite, but that's all easy. It's it is what it is. But let's talk about why you went to HOK, which is and tell us a little bit about that engineering firm.

SPEAKER_01 1:30:26

And that that connection goes back a long time. You know, Helmet, Obata, and Casabaum. You know, I wanted to work for that firm when I got out of college. I really that's the firm I want to work for. And try though I may, I got sidetracked into other companies. But I knew the people. I knew the I knew Helmeth, Obata, and Casabomb. And the three of them are now gone, passed on. But uh Bill Helmouth is the son of George Helmouth, and Bill runs the operation. I've known him for years. We've been competitors, we go head to head architecturally. But when it comes to structural design, HOK is a big, big firm, and they gobble up other little companies. So once upon a time, they gobbled up my structural firm in Houston. And these are dedicated academic structural engineers, all of whom have PhDs in static design and structural design. So when they bought my structural, my go-to structural company, they became HOK became my go-to structural company. So when I have a sophisticated design issue, I go to HOK. They are the most probably well-known architectural firm in the country, maybe second to AECOM, but it's like they're there. So they are part of our team.

SPEAKER_02 1:31:52

So I'm gonna read, and this is really kind of important, you ready?

SPEAKER_01 1:31:56

Yeah.

SPEAKER_02 1:31:56

So this is just to give everybody an idea of who they are. Okay, so they did the second terminal, so they re engineered and designed the second terminal of San Diego International Airport. Yeah. They did the two health centers for the educational health centers for the University of Tennessee. They did, right? Of course. They did uh fast company recognition, three HOK projects with innovation and design awards. I'm not sure which one those are, but I think they're talking about let me just go to it.

SPEAKER_03 1:32:32

Uh Dallas Fort Worth International Airport.

SPEAKER_02 1:32:35

And they did Houston's as well. Yeah, here we go. What else did they do?

SPEAKER_03 1:32:41

They did some stuff in Europe. Okay, so that's what that was. Let's go back though. Okay, here we go. Um I think they did uh Seattle Airport. They did Houston Bush International, the Cleveland Clinic, they did US Open, they did the World Cup uh Stadium.

SPEAKER_02 1:33:11

Um they did the Falcons Bank of America Falcon Stadium. And they it just lists goes on LG Headquarters. I mean, these guys are incredible.

unknown 1:33:24

Right.

SPEAKER_02 1:33:24

What they've done and designed for the city. And their St.

SPEAKER_01 1:33:26

Louis office does all of the all of the big theaters. I mean, all of the the football stadiums they do H O K Sport. H O K Sport has a list that'll knock your socks off.

SPEAKER_03 1:33:42

Let's see what else they got. I mean, this is like endless.

SPEAKER_02 1:33:46

I mean, stuff in New York, what's this another football stadium here? My goodness gracious. Yeah, it's just uh, you know, remember we were looking at them, I'm like, wow, and they they do a lot of stuff like abroad too. This isn't just here. Yeah, this is yeah, they're all over the place. I mean, Atlanta, Austin, Beijing, Chicago, Dallas, Denver, Hong Kong, Houston, you know, I mean, London, LA, Miami, all New York, all the basically big Salt Lake City. They do everywhere.

SPEAKER_01 1:34:15

Right. The last time I checked, they had either 8,000 or 9,000 employees, but it could be bigger.

SPEAKER_02 1:34:20

Yeah, they're huge. Yeah. And that's incredible. So we went to you guys went to them for the designs or for the engineers.

SPEAKER_01 1:34:24

Because I trust them. Yep. I mean, my my structural firm that I've used forever in the Houston, you know, Texas area, was that staff. They acquired my structural guys and brought them into H. So I said, okay, come on. I want to use my guys who I know are the best of the best. You know it too, because you bought them. So I want those guys. Yep. And that's who we went to.

SPEAKER_02 1:34:48

That was our conversation when we first started to like, hey, look, this is my vision, that's what I'm trying to do. This is what I think the world's going. From a finance side, this can be big. You know, that's why when we looked at it going, okay, look, if this does take root, we want to have the infrastructure. It's taking root, 1,200 buyers, people across the country reaching out to us, talking about it's it's about manufacturing. The last bolt-on is being able to finance that for people. Once you're able to start financing stuff, this changes the landscape of the profitability of that, you know, along with how many times you can get that out. Yes. Then you're starting to negotiate better pricing with your steel manufacturing companies and your contractors, and the list kind of goes on. So, from an investment perspective, you can start compressing your costs, ultimately mitigating risk, creating more profit, but maneuvering around whatever environment we're in at the moment. That's basically the way I'm trying to do it.

SPEAKER_01 1:35:42

And see, I trust you know them structurally as a structural design firm so much. The firm that was my go-to firm was called Ingenium. The man who ran the firm was Anu Mahendra from India. And he hired the very best PhD structural engineers he had. I involved them in the hurricane house. When I had the concept of the hurricane house that would rotate uh around the polycarbonate rail, you can't put a steel rail in because of the toxic environment. I mean, you've got the salt everywhere. You can't use steel. So you put polycarbonate in and the house rotates. We never finished that conversation about why that works. Well, it works because you can leave and trust the wind and come back and your house is still there.

SPEAKER_03 1:36:28

Right, right.

SPEAKER_01 1:36:29

All I have to do is rotate it back into place. And the beauty of that is if you you know what you're doing, you can just sit in the house, hit a button on the computer, and you can change your view. I mean, you can actually rotate your house while you're in it. And if you see if you see a cute babe sunbathing over here, you can you can take another look. Or you can have a subdivision. Say you have 400 of these, 400 hurricane houses on the beach at the same time. What a ballet it would be to watch them all move when the hurricane comes. I mean, they're all moving at the same speed, they're all moving at the same time, and at the end of the day, when the hurricane's gone, they're still there.

SPEAKER_02 1:37:05

Yeah, that's incredible. That's that's why I love so that's the point, right? Bringing you on to have you help me out with this stuff, even though that's a lot more complicated than the barn cave. But those are the things that we wanted to approach this as is just kind of having that polish, that sophistication, focus on price, something that's somewhat easy to continue to build throughout the country. And then, you know, looking at from logistics and cost and price and all that fun stuff.

SPEAKER_01 1:37:31

So I brought H O K in on the on the gym. They did they did all of our structural work on the gym, and that was no easy deal. No, that wing that over that reaches over the when I had to have you had to have the wing. You were insisting on the wing, and that's a double cantileber. That's that's a piece of unsupported steel in this direction, and another piece of unsupported steel at 90 degrees, and there's a lot of wind uplift on that thing. Yeah, oh yeah, make sure it doesn't move. I mean, it could be flying away, yeah.

SPEAKER_02 1:38:00

And you know what's funny is that I try to tell people, you know, Joe's done a really good job at trying to create the images of the and mind you mind you, everything that everyone's seen, that's all to actual scale, yeah, right? Uh, but the the community itself is a true resort style community. I mean, people are going, like, that's even being built on the north side. If you look at some of the developers and builders that are also starting to buy land out there, like Apex just bought, I think April of last year, 25, they bought 623 acres for 10 plus million bucks. So I think it's like 800 units that they're building over there. But you have to go buy our our property. You know, we're the main vein to get back there. So, but they had us listed as far as in their PR, right? So that you know, they they're telling everybody, hey, it's right next to the barn caves in the big gym that's being built. You got the guys that are building North Point and Viewpoint, they're expanding there. They're trying to buy the other 300 acres, from what I heard. Not sure if that's the case, but that's a big deal. You know, and and the owner of the mall, he's sitting there supporting us, going, hey man, if you put if you can get this up and get that built, how much it's gonna help you, this north side, and how much it's gonna help. So it's like the way that everyone over there is seeing this project is like we're the ones that's breaking that ice and really starting to push that growth towards the north side. And that's a big deal because you got Home Depot, you got all the big retailers, you got the airport that wants to expand. It's just this that whole area is literally prime. And I feel like we were we positioned ourselves perfectly to be ahead of that and start that growth.

SPEAKER_01 1:39:34

When the manufacturing process begins, as we begin to panelize and systematize the structure and putting it out there, you're gonna have to find an outlet, you're gonna have to find distributors all over the country.

SPEAKER_02 1:39:50

I know. But while I'm there, I'm meeting with a couple other distributions and a couple of steel manufacturing companies. I got a couple guys that I'm working with out there too. So there's a lot kind of going on behind the scenes people don't know. But this, the, the it's it's it's morphing into something bigger than I ever thought it would be. But it's also because of the caliber of people that we brought on and the caliber of engineering that was already set up. So it's a very black and white for these groups to look at it and go, okay, well, you got the engineering done already. Like, hold on. I can I can tell you exactly what you're gonna expect, exactly what that price is gonna be, how long it's gonna take to get it. And now I can start delivering those results back to my other builders or other people that want to buy these things or whatever. Like I can get I can get right to brass tacks, it becomes a real business.

SPEAKER_01 1:40:33

Oh, yeah.

SPEAKER_02 1:40:34

It's a real thing.

SPEAKER_01 1:40:35

I mean you're you're gonna be like Acme Steel, which has outlets all over the country, and and and that's a good thing because in each part of the country, because of the soil conditions and the code conditions, you're gonna be manufacturing just slightly different versions of the Barn Cave and standardizing the slightly different versions. If you want a 40 by 90 that's you know coastal approved, you're gonna go to Houston or Atlanta and get that thing made. Yep. So you've got to set that up.

SPEAKER_02 1:41:08

All right, you ready to have some fun?

White House Access And The Bush Family

SPEAKER_01 1:41:09

Yeah.

SPEAKER_02 1:41:10

I think it's time to talk a little bit about your crazy ass background. I think it's time. I let's talk a little bit about um you were talking about the uh Bush family earlier.

SPEAKER_01 1:41:19

Oh yeah, you know. Oh my god. So uh this goes back to once upon a time, and this is 1980, uh, I was tapped by the Reagan administration.

SPEAKER_02 1:41:35

Yeah, this is what I only want, yeah, yeah. Everyone pay attention to this story.

SPEAKER_01 1:41:38

So so uh there's a there's an organization in Washington, D.C.

SPEAKER_02 1:41:43

Real quick, I want everyone to know this. The reason why you're able to talk about this is the Statute of Limitations was up, right? Right, right.

SPEAKER_01 1:41:51

Some of this would would have me, you know, disappear. Yeah. And I don't want to go there.

SPEAKER_02 1:41:56

All right, guys, we're back. We took a little break, just kind of recalibrated and had something to eat, grabbed another drink, and now it's time to get even deeper. I I think this is where it's at, right here, man. This is you know, we were dancing around a little bit earlier just about uh the barn caves, and I thought we're gonna hold back a little bit, just make everybody call us and say, really, what how are you building these things? But I want to bring this up. So you I know we were talking about uh the Bush family in the past, right? So, you know, a lot of things I want to interview you on was you know, conversations that we've had, you know, obviously off camera. So I want you to bring up a little bit about your relationship with the Bush, the Bush family, please.

SPEAKER_01 1:42:31

Well, and the Bush family, I mean, this is this goes way back. Um first of all, I love the family. We're very close, or we you know, we have been in previous years. Barbara used to send me a personal Christmas card every year. And uh, you know, George Herbert Walker Bush was one of my idols. When he was vice president under President Reagan, we had a relationship, and I would go to the White House frequently with certain projects. So I was on the task force that the uh the Reagan administration set up on affordable housing. So on the task force for affordable housing, we looked at all of the the earlier paradigms for how to supply housing. And we tried to focus on the inhibitors to affordable housing, and the inhibitors were regulations mostly. So we uh we made several trips to the White House to meet with then Vice President Bush, Daddy Bush, and he became a friend. And Barbara and he were just remarkable people. I respect them so much that now they're gone. So I got close to the family, to uh George W. To uh Neil, the youngest, he's uh living in Houston. So we just became friends. The day came in uh, let's see, nine so nineteen eighty-seven, when uh the second Reagan term occurred and uh Daddy Bush was vice president. It came time for me to get married. So uh my uh my fiance who was Catholic searched high and low in Washington, DC to try to find a church that would marry us. And of course, every Catholic church she went to, they said, No way, Jose, find a different man. You know, not find a different church, just find a different man. So she called me one day at the office crying, she was crying her eyes out. And I said, Oh my god, let me let me you know, give me a few minutes, let me take this all in and I'll figure out what we can do. So I hung up the phone with her and I imagined where in the world could we go and get married at a in a church and have a spectacular wedding. So I thought and thought and thought and I said, Oh, I know the perfect venue is the Washington National Cathedral, the biggest cathedral on the planet. And so I called over there, I called over and got a hold of the administrative staff at the cathedral, and I said, you know, I'd like to figure out how I get married at the cathedral. And they laughed at me. And they said, uh, well, who are you? And I said, Stephen Beagle, architect. And they said they laughed again, and then they said, Well, you can't get married here if you're just a U.S. citizen. You either have to be you either have to be a diplomat from another country, or you have to be a member of the House of Representatives or the Senate, or you need to have the White House arrange your wedding. And I said, What what what what was the last part? You need to have the White House arrange your wedding. I said, Thank you very much, really. So I called over to the White House, got a hold of Jennifer Fitzgerald, who was Daddy Bush's you know administrative assistant.

SPEAKER_03 1:45:56

I said, Jennifer, I need a favor. And you get him on the phone.

SPEAKER_01 1:46:01

He says, Hold on. So I get him, she gets him on the phone and I said, I need a favor. I just need somebody in your office to call the Washington National Cathedral and tell him that I'm okay, that I'm a good guy. And and allow me to get married at the cathedral. He laughed and he laughed and he said, Okay, click. Twenty minutes later, I get a call from the cathedral, and they say, What's what are your dates? So they we set it up with a single phone call from the White House. I was able to get married for the third time at the Washington National Cathedral, and then that place is huge. Oh, yeah. They played Paco Bell's canon twice, so my wife could walk down the aisle. It was that big. It was big. I mean, they had to go through the whole rendition of Paco Bell's camel twice. And and you know, they can't close the cathedral for a for a wedding. Sure. So you had all kinds of people from all points of the world, you know, Japanese and Chinese and Indians and foreigners of all of all denominations with cameras. It looked like Princess Die was getting married. So that happened. I love it. And we got we got married. And thanks to George Herbert Walker Bush, I'm always grateful for that event. Great memories, great photos. Cool. We we made it 29 years.

SPEAKER_02 1:47:23

Yeah, there you go. But you know what's what's the takeaway is just kind of how entrenched you were in the space, right? As far as my I tell everybody you're you're the architect in the country. Well, and there's other people, yeah, I wish they were big firms, but yeah, how many people still can sketch like you?

SPEAKER_01 1:47:39

Oh, like with crayons. Yeah, I I can only use crayons.

SPEAKER_02 1:47:43

But that's like the talent I keep talking about, right? And then obviously your your experience and what we've kind of done together only opens up my eyes a little bit more. But all right, let's talk about uh let's talk about the Pentagon.

SPEAKER_04 1:47:53

Oh well.

SPEAKER_02 1:47:54

And then let's talk about I want to talk about because now you get to share on camera a little bit more about your relationship with the CIA. Yes, but then I really but uh before you go into that, I want to talk about your renovation experience and experience with the renovation, yeah.

SPEAKER_01 1:48:13

So let's go to the Pentagon.

Renovating The Pentagon And A Buried Bulldozer

SPEAKER_01 1:48:14

So um 1996 I joined URS Grindr. It was URS at the time, we bought Grinder, but my role as a senior staff member, member of uh the board of directors, was to run the Pentagon operation.

SPEAKER_02 1:48:33

So in uh how big was that budget?

SPEAKER_01 1:48:37

$1.2 billion, billion with a B. The Congress approved the budget in 1992. I joined it took a while for the money to flow, but in 1996 I was brought on to run the project.

SPEAKER_02 1:48:51

Got it.

SPEAKER_01 1:48:52

So we were architects and engineers renovating the Pentagon, and you start at the bottom, you start all the way down on the lowest level. And this is where the fun began because uh the lowest level, the Pentagon is you know five sides, five stories tall, five rings, A, B, C, and D, and you know, the Secretary of Defense was located on the exterior rim in the ring A, and that never should have happened because people can't take a shot at that. It's only two two bricks between him and you know, instant gone. So uh we had to renovate the building. So the goal was to go into the basement of the Pentagon, which was you know a slab and twenty feet to the next level. They used to park tanks and all kinds of military vehicles, troop carriers. So the slab was just messed up. It was it was so broken up because of the heavy equipment that used to be stored there. Now it was built in 1941. It was built about 16 million dollars, and you know today to have a $1.2 billion budget to renovate a building that was built in the 40s. It was it was kind of crazy, but we went at it, and the first thing we did was tear out the basement level, lower the floor by three feet, basically a meter, and when you do something like that, you there are there are piles. Something like I don't know 4,000 piles under the building. And they they're deep.

SPEAKER_04 1:50:25

Yeah.

SPEAKER_01 1:50:25

So the rule of thumb is you go at least as deep as you are high. So the building's like 60 feet high. So we went down, we lowered the new slab by three feet, poured it, and then jacketed the existing piles. And what that means is you drill holes and put rebar into the existing piles, the columns, and you pour another sleeve of concrete over it, tie it together. And we created a haunch, basically a platform 11 feet in the air above the new slab, and poured a new a new intermediate mezzanine.

SPEAKER_02 1:50:59

So that's what those are. You see it have like its own little like it's bigger towards the bottom.

SPEAKER_01 1:51:04

It's bigger. So what happens is we created a new floor level, a mezzanine. We picked up 350,000 square feet of space in the Pentagon, which was already that's a lot of space in the floor level.

SPEAKER_02 1:51:16

That's just by going down.

SPEAKER_01 1:51:17

Yes, that's all it was. But there is a thing, there is such a thing as going down too far. I'm about to tell that story. But the uh so you know 350,000 square feet of new space is substantial, but that building in 1941 was the largest office building on the planet.

SPEAKER_04 1:51:36

Yeah.

SPEAKER_01 1:51:37

It was larger than the than the uh Empire State Building, which was built in 32 and I think finished in 36. So the Empire State Building back then was just under six million square feet of space. The Pentagon was 6.1 million squares before we added the other 350. Yeah. Anyway, that's just ancient history. But we go to um renovating the building, so we lowered the slab into the mud. Three of the five wedges were on the Potomac River side, and they were in the mud. So we lowered them and we realized that the soils are just crap. I mean, it's basically silt. Yeah. And it gets really muddy. It's soft. It's quicksand. Yeah. So in the course of in the course of redesigning and reconstructing that slab to accommodate the additional vertical space for the additional mezzanine level. We were pouring concrete one day, and uh I was in the office at URS, and you know, I get a call from Captain Mullins. He was the uh Army Corps of Engineers guy on site in charge. So we've got vehicles, construction vehicles on site inside the building. We have concrete trucks up and down Route 110 filled with concrete that had to get poured, and we can't get out of the way. He couldn't get the people out of the way with the rebar set ready to accept the concrete in time. One of the vehicles that got uh caught in this was a D-8 that sinking into the quicksand. Couldn't get out of the way. So Captain Mullins made the unilateral decision to bury the vehicle. So he said, get that D10 over here. Classic Corps of Engineers command decision. Get that vehicle over here, smash the D-8 down into the mud and cover it, put the rebar in, and we're pouring this concrete. So that was what happened.

SPEAKER_02 1:53:47

Just so you know, that's a so a brand new D8, $650,000.

unknown 1:53:51

Yeah.

SPEAKER_02 1:53:52

Anyway, so keep going.

SPEAKER_01 1:53:52

Oh, yeah, that was just cost of doing business back then. Yeah. So they did. They smashed it into the dirt and covered it up, then poured it. It's a beautiful slab.

SPEAKER_02 1:54:01

So to this day, there's a D8 underneath that.

SPEAKER_01 1:54:03

Not anymore. I mean, we it this is this is the coup de gras. This is the end of this story. So about six months into this, after we poured that slab, construction's still ongoing. I get another call, and it's from the Department of Defense, not the Secretary, but the Under Secretary, and he says, We got a problem. The sewage is backing up in the basement of the Pentagon. All the brand new toilets that we just put in, we can't flush them because every time you flush them, stuff comes out, it doesn't go down. Oh man, you know.

SPEAKER_03 1:54:34

Oh no.

SPEAKER_01 1:54:35

You know, it wasn't, it was another word, but oh yeah. So we ended up sending a team over there in the cloak of darkness, and they cameraed that sewer line. Now, mind you, this is the Pentagon. 24-7, there are 33,000 people in that building. Gosh. 24-7. Wow. Various shifts, but it's a city. Yeah. It's a city in that six million square foot facility, and they all have to use the bathrooms. So now you've got a 96-inch diameter, eight-foot diameter steel sewer line that we have somehow crushed a D8 on top of and pinched the sewer line.

SPEAKER_03 1:55:18

Oh my god.

SPEAKER_01 1:55:19

So when we camered, when we cameraed the sewer line, the camera did its thing at a quarter inch per foot, and then all of a sudden there's this big belly in the sewer line. We were all like, I'm just gonna say it, holy shit. So here we were. What do you do with that? So again, under the cloak of darkness, we sent a team in to drill and be sure what we were dealing with, and the the drill course came up with yellow caterpillar tape. Yeah. So then we opened up the floor and sent a team down there with acetylene torches to cut up that vehicle and bring it out in pieces and sneak it out under the cloak of darkness so that nobody would ever know that somebody messed up. You know, to me, it wasn't me who messed up, it was the colonel who said very demanding. So uh anyway, we got it done and we replaced that piece of pipe somehow, and uh nobody knows that story. I mean, I think I've told that last year, yeah, but that's the truth.

SPEAKER_02 1:56:21

Well, that's wild.

SPEAKER_01 1:56:22

You can't you can't hide from the truth. So that happened. And so, you know, the beat goes on. So we finished the uh that part of the renovation and we recaptured you know 350,000 square feet, and then we come up on 9-11, and that was a whole different yeah, because you had guys there, right? Yeah, I had guys uh in the building, and I was scheduled to meet with them in the building on the North Wedge that morning. So I had just dropped my kids off. This is 9-11, uh, 2001. I had just dropped my kids off at school, private school, you know, Catholic school, dropped them off, and I'm headed down Connecticut Avenue over the top of the hill near the Hilton, and I start seeing smoke rising out of the Pentagon. And I'm like, what's that about? Instantaneously my wife calls and says, Where are you? I said, I just dropped the kids off, I'm headed for the Pentagon. She said, Turn around. She says, Turn your tail around and go pick up the kids, go get them, something's going on. So I turned around, went, got the kids, went home, and then watched on the news all that was happening in New York City and in the Pentagon. So it was a terrible day.

SPEAKER_02 1:57:35

But um Yeah, so let's let's talk

9/11 Structural Reality Versus Conspiracies

SPEAKER_02 1:57:38

about that. Talk about that because you obviously understand design. I do, and one of the biggest controversies out there is some sort of you know, component to the World Trade Center was bombed, and then the original owner of the World Trade Center had insured it like six months before for billions of dollars, and then this whole thing happened, and there's money being hidden by the CIA or the FBI or the government or some level, you know, so there's all that, but it always has to do with like it being bombed. Let's start with that. And and so let's let's talk about how that really actually transpired. So right because it made sense to me.

SPEAKER_01 1:58:15

Yeah, Ryan, I have heard all of the conspiracy theories on the planet, yeah, and I have to you know swallow it and take it all in. None of it holds water, none of it's true, but I it was such a somber day that I have to get it, give it its due. But in consideration of what happened that day, I know for a fact, you know, as an architect, that in the case of the World Trade Centers, towers one and two, the design of that building by Yamasaki, an architect out of Japan, when you designed the building, it was designed in two-floor intervals with an external steel frame and an internal elevator core. So it's basically an open floor plan. I mean you're you're you're spanning each floor from the elevator core out to the structural shell. So there's not a lot in the middle other than stair towers and elevator towers, and then you've got the structural shell. And it's you know 130 floors in the air. What was it, Windows on the world, the restaurant that was up on top. I used to go to that restaurant and I'd order a glass of wine, and I'd I'd be mesmerized by the fact that the buildings were moving. The building's moving six or eight inches every every, you know, it's it's pulsing, and your wine's doing this, but it was fascinating, right? But the building was moving.

SPEAKER_02 1:59:38

Yeah. Designed that way.

SPEAKER_01 1:59:39

It was designed that way. So here we have a well-designed, iconic structure times two, and now they're on fire. And the way these buildings were built back then, you had basically a two-hour fire code that in the event of an emergency, you had firewalls, just like we do today, stair towers or concrete block, usually, or cast concrete, two-hour rating. If there's a fire on the inside, you get into the stairwell, you're safe, and you got two hours to get out.

SPEAKER_02 2:00:08

No matter what floor it's on.

SPEAKER_01 2:00:10

No matter what floor you're on. And in the terms of the fire suppression system, the sprinklers, periodically on certain floors, there's a reservoir. And the reservoir is designed to hold water.

SPEAKER_02 2:00:21

So it's gravity fed.

SPEAKER_01 2:00:23

It's gravity fed, but it has to be periodic. And so you've got a tank at the top which has water in it, and it's in the event of an emergency, sprinklers go off and it's draining that tank because you can't possibly pump water that height.

SPEAKER_02 2:00:35

Yeah.

SPEAKER_01 2:00:36

So it's got to be held. So now the planes have hit, the buildings are on fire, the fire suppression system isn't working because the pipes have been cut.

SPEAKER_04 2:00:49

Yeah.

SPEAKER_01 2:00:49

The stair towers aren't accessible because they've been cut off. So everybody above the floors where the strike occurred are basically doomed.

SPEAKER_02 2:00:58

Yep. And so you couldn't get down the stairway, couldn't get down the elevators, couldn't go anywhere.

SPEAKER_01 2:01:03

And all the people who were helping, all of the responders are pouring into the building, going up the stair towers, trying to help.

SPEAKER_02 2:01:12

And I tell everybody all the time, if you think about the training that those people have done, that's all they did. That's right. They're getting like when they were in boot camp, in essence, they were doing training for high rises because that's where they they live in or service in the town that has high rises. So their job is to go up and grab and come back down.

SPEAKER_01 2:01:28

As fast as they can. I mean, that's that's what they're trained to do. They're not trained for a building to fall on them. Right. They have no preparation whatsoever for that. So now they're going into the building, the building's on fire, and I'm watching the clock, and I'm thinking, they've only got two hours. Either you get them out in two hours or you don't. So what happens when steel is heated to you know 3,000 degrees? And you have fuel burning constantly. Yeah. With no suppression.

SPEAKER_02 2:02:00

There's a lot of fuel that was in that those.

SPEAKER_01 2:02:02

They were fully loaded. So now you know you got 3,000 degrees plus, and the steel, the external steel skin, is melting, basically. And whatever horizontal girders are in there, steel girders, they're melting. In structural terms, we call that structural fatigue. So they get so hot that they fatigue under the load, and when they reach uh the point of no return, uh, it breaks and everything falls. Now we have a safety factor in structural design of 2x. So twice the design load is what we design for to make sure we're safe. But you can't take the 2x normal design load and have 50x crushing it down. That's what happened.

SPEAKER_02 2:02:54

Because the weight of it, once it starts dropping, that that pancakes all over there. Yeah, it's just yeah.

SPEAKER_01 2:02:59

The fact that it went down vertically is no surprise. It pancaked. You you just it went straight down. Nobody bombed the building.

SPEAKER_02 2:03:07

Yeah.

SPEAKER_01 2:03:08

Nobody took out an insurance policy and expected it to happen.

SPEAKER_02 2:03:12

Yeah.

SPEAKER_01 2:03:13

It's it's it's insanity to think that. And the same with the Pentagon. You know, I was there when the building, I was looking at it, smoke, and I I got the video where the plane struck the tarmac at the helicad and bounced into the building. And I lost two people that day who were on my staff. So that is, you know, to me, when people talk about conspiracy theories, I have to walk away. Yeah, I can't deal with that.

SPEAKER_02 2:03:42

Yeah, I you know, it's funny, I I kind of agree with that. I I I don't know much compared to where you are, obviously, about that. But I looked at it going like, you know how much fuel are in those planes and how hot that was burning? Yeah. And I knew that with that that type of weight goes into that building, everything is basically being sheared. So you're, you know, obviously all the water lines and and fire protection is gone, electrical is gone, everything's gone. Everything all the way down to the elevator shafts, you know, the so obviously everybody above it, plus that fire, that's why people were jumping out and all the fun crazy stuff.

SPEAKER_01 2:04:17

Yeah, they had no choice.

SPEAKER_02 2:04:18

I mean, yeah, I would have too. I mean, dude, is that hot? Is there no other way that you're gonna go?

SPEAKER_01 2:04:22

So your your choice is jump and die on the sidewalk or wait and get crushed. Yeah, that's your yeah.

SPEAKER_02 2:04:28

Yeah, that was rough. So, all right, let's talk a little bit about the CIA and your relationship with the CIA

CIA Lease Cover And Surveillance Buildout

SPEAKER_02 2:04:32

and being hired. Okay, because that's really how it works. Now we there's there's movies about it nowadays. Okay.

SPEAKER_01 2:04:38

I'm gonna walk gently on the tread water. So um, because of my um relationship with the Pentagon, you know, running the Pentagon renovation, obviously I had a security clearance, and it was a very high clearance. You know, there there are telephone closets in the Pentagon that have red phones and black phones and green phones. So, you know, you you're gonna have access to those closets. You can monitor communication between the White House and the Pentagon or whatever. So you have a security clearance that is high enough where people trust you not to talk and not to do crazy things. And I put that to heart. I mean, I was you know, I pledge allegiance every day. Oh, yeah. So that's the way it works. You're from Dallas.

SPEAKER_02 2:05:20

You're from you're from Texas.

SPEAKER_01 2:05:22

I'm from Texas, and I'm basically an adopted Bush. So yeah, that's yeah. So what happens here in uh I guess it was 1999, somewhere in there, you know, right around the time of the attack, you know, between 2001 and so I was um tapped by the CIA because of my security clearance. I was already you know uh running this large architectural firm, and they said, would you uh would you be okay with renting the top floor of this building on K Street, actually M Street, corner of M and K eight-story building. We need you to rent the upper level, 20,000 square feet, and put as many staff in there as you want. And I said, Well, I have the staff, but why am I doing this? Well, we need you to. So I said, let's go see the space. So I I went and my contact at the time only had a first name. His name was uh Simon. And so Simon identified himself to me as CIA and he was asking me to help rent this space. So when I had Simon in the space and we were walking it, I asked him, Why are we doing this? And he stopped me and he said, Do you like the way things are in this country? And I said, Yes, because that's all you need to know. Okay, well so the rent back in those days was fifteen thousand dollars a month, something like that, for the floor. So he says, Can you do this? Will you do this? Will you sign the lease and rent the space? I said, Well, who's gonna pay the fifteen thousand a month? He says, Well, we will, and we'll pay it through a private corporation.

SPEAKER_03 2:07:13

Okay.

SPEAKER_01 2:07:14

So then he said, uh we want you to renovate the space according to whatever your needs are, but you you're gonna hire our contractor to renovate your space to make it uh ready for your people. Okay, and why are we doing this? Because Simon says. Okay, Simon, okay, I'm doing this, playing along. So that building, the floor, the eighth floor of that building, happened to be on top of the other seven floors that are already leased to the European Union. So this is where it gets intense. And this is uh this is before the creation of the Euro. During that sensitive time, the United States was nervous uh about a new currency coming into the world market.

SPEAKER_03 2:08:10

It makes more sense. Hence, use my contractor so I can run my lines.

SPEAKER_01 2:08:14

Correct. So and again, I'm being very careful about what I'm saying. I'm walking on eggshells here. It's beyond the statute of limitations, and I'm old enough not to care.

SPEAKER_02 2:08:25

But I'll get you out.

SPEAKER_01 2:08:27

So it goes to the it goes to the surveillance that occurred. I used their contractor. All night long they were drilling holes in the slab, running electrical lines theoretically, but they were installing listening devices, and it happened to be the main conference room for the European Union was directly below. It's gracious. So they're it's like a movie. Well, it is, it would make a great movie. So we uh I consented to all this. I played along.

SPEAKER_03 2:08:57

Yeah. And so they finished the renovation, all the bugs were installed, the listening devices were installed, everything's fine.

SPEAKER_01 2:09:08

And uh Simon would show up periodically with a check for 15 grand so I could pay the rent. We even went to the extent on that eighth floor of providing a fake electrical room. So on the just outside the elevator core, you could see it says both letters, electric room. Well, you turn the key and you go into the electric room, and it looked like an electric room. But there were phony electric panels. Push another button and the door opened, and that was the surveillance center. Wow. And the broadcast station. So all the listening stuff was being electronically transferred to the street CIA vehicles. So anything that was being observed was being sent in real time.

SPEAKER_03 2:09:52

Yeah, yeah. Wow. Yeah.

SPEAKER_01 2:09:55

That was weird. So um Holy shit.

SPEAKER_02 2:09:59

Yeah, I know you're I know you're I'm gonna stop soon. Okay, I know. I can go away further than this.

SPEAKER_01 2:10:04

You know, yeah. But it's been uh it was a heck of a ride. And I keep I I I laughed today because why did you do this, Steven?

SPEAKER_02 2:10:13

Yeah, because Simon said, Yeah, you know, but you but you're able to get move on and the time closed out.

SPEAKER_01 2:10:20

Oh, I was lease up. I you know, when I um when I left that company, I was threatened, you know. Don't you breathe a word. Right? I left the company and they still had the lease, but they're still surveilling don't you breathe a word. So I was like, okay, you know, I was sworn to secrecy for all these years. What year was that ago? What years was 2001.

SPEAKER_02 2:10:42

Okay, so this is certain, yeah, this is by far.

SPEAKER_01 2:10:44

Well, yeah. So they were paranoid. I mean, the whole the whole government was paranoid about the euro. They didn't know what the euro would become. It was it was weird stuff.

SPEAKER_02 2:10:54

Dude, wild. That's so crazy. Yeah, your stories every time we talk and obviously our stories when we actually have private conversations, right? It's a whole nother game.

SPEAKER_01 2:11:03

Right.

SPEAKER_02 2:11:03

But man, how fun. Your life has been.

SPEAKER_01 2:11:08

Yeah, you know, I don't want to, you know, not be here tomorrow.

SPEAKER_02 2:11:10

What are you working on right now that's just interesting that you want our audience to

Attainable Housing And A New Neighborhood Model

SPEAKER_02 2:11:15

know?

SPEAKER_01 2:11:15

Well, the barn cave is you know, the whole project, the barn caves are are, you know, I think it's a shift in the way we in the way we think about living. It is it is the it is the right model for the future of family and the future of the aging population and the future of uh neighborhoods and communities. It's it's not a stereotype. It is a a formula. It's a formula you you buy the box, you make the box, whatever you want to make the box. But it goes back to the Sears and Robuck model. I mean, you can order your house online, have it delivered, get it built, and do whatever you want inside. It's the flexibility of life inside the box. But affordable housing has become a buzzword, and nobody knows what it means.

SPEAKER_03 2:12:13

Yeah.

SPEAKER_01 2:12:13

You know, we do affordable tiles, even Pine Street was supposed to be affordable housing.

SPEAKER_02 2:12:17

You know, I tell I tell everybody it's funny because I really feel that this will be adopted at some point, but everyone talks about affordable housing as far as low-income housing. I think people automatically think that. And that's not how I see it. And I the way that I see it. And I will tell you the way the banks are seeing it right now, because the way the if the money sees it a certain way, that's the way it is, right? But when I say like affordable housing or attainable housing, I look at each and every area has its own culture. And so when you say affordable housing, then let's define what that is in the area in which you're talking about. That's what I am starting to adopt. Because you could okay, let's talk about affordable housing in Beverly Hills. Well, that's like 2 million, 3.5 million bucks. Like, like that's the low income of the area, right? But you talk about, you know, certain other areas in the country, Baltimore, it's like 25,000 to like 35,000. It's like maybe, right? So, and that's and I say it respectfully, but the the like I try to tell everybody like you need to really identify what that means in that particular area that you're targeting. And I think from when you look at what we've created, is almost like this hybrid of luxury living, and then you have affordable, attainable, is where I'm just saying the attainable would be word. Because if you're able to buy a 3,300 square foot house out there right now, you're at 15, 1,6, 1, 7 at least. If I'm at I'm at a little bit lower, I'd say I'm 100,000 cheaper than anywhere else you buy, but you have an elevator and lock and key and your overheads lower, but then you have a 40,000 square foot community center with a health and wellness and a gym, and it's a private community, and you have you know dog parks and pickleball courts, and you have solar and you have all these things, that's what I'm trying to deliver is like, look, yeah, you can go spend maybe a hundred thousand more to get the same square footage, but would you have the views? Would you have the culture of the building? Would you have less maintenance, less overhead with the amenity package that it comes with? And it's not even close. You're not going to find that. That's a two and a half, three million dollar house in any other community in the country.

SPEAKER_01 2:14:32

And so what we're describing here is a different paradigm, it's a different model for how you live. It's it's neighborhood focused. There's a neighborhood center, there's a gym, there's a place to go and meet people. There's a wine bar, there's a pool, and you've got the center of the city. It's a it's a different neighborhood model. And I reflect back on if you remember the author, George Orwell. George Orwell wrote 1984, and that was decades ago, maybe before you were born, and he was predicting what the future would look like in 1984, where Big Brother and cameras were everywhere watching every move you made throughout your entire life. But it was it was an organized, controlling uh environment where you couldn't make a move outside the neighborhood without permission or being observed. So as a contrast to that, you know, contrast to nineteen the book, nineteen eighty-four, we're living in a time today when the cameras are everywhere, right? And it's a good thing, I mean, for security. It's got its negative side. Everybody knows everything about it. You can't hide. But the um the freedom that you're allowed to have in the future is limited by what you can afford and the environment you choose. And if you choose a structured neighborhood environment where there is a city center and there is a place to congregate, and there is the privacy of your own barn cave, then that's cool. And that should be the chosen uh deal right now with the aging community.

SPEAKER_02 2:16:13

Yeah, I love it. And so you know, with like the way I look at it is like the gym has its own, like so it, you know, I'm always looking at it from a numbers perspective. That I know it sounds weird, I'm just gonna be honest. Like, I look at things from a numbers perspective, like how what's relevant, how do we create it? And then what happens is I turn I typically fall in love with it on my way through the design. That's basically the best way to put it. I fall in love the deeper I get into it, the more I understand what's needed, and I can start tailoring things, and I start to fall in love with it more and more. You know, when you have an area, like let's just use the gym as an example. We have an area where you can have, you know, more like you have food and meal preps and a smoothie bar and you have all that. Well, you could start providing food and and meal preps for people that also live there. So, no, you have so many people that come out come out there that you know are from you know snowbirds or they're coming from California, just coming out for the summer or for weekends or what have you, right? You have a lot of that kind of second home, you know, second home lifestyle. Well, one of the biggest problems out there is is finding really good healthy food. And right now, when you look at health and wellness, and we can go into politics if you want, we go like you know, uh RFK, is RFK that's uh leading, you know, so all the way down to that, the pandemic and the you know, just healthy food in general to all the negative uh PR in regards to pharmaceuticals and just all the stuff. Everyone knows that healthy food is where it needs to be, right? There's a the data shows there's a 9.6% increase in people eating healthy farm-to-table stuff. And so staying on the front lines of implementing that moving forward, especially when you know physicians are going back to their patients and tell them to go ahead and start eating clean and you know, taking peptides, and they're starting to do a more holistic approach to health and wellness. We're implementing that in there. So now you have an actual doctor that's sitting inside a gym that you're not even paying for. Meaning the gym isn't a part, it's a part of the investment, but it's not a part of the HOAs in the community. It's separated. And I learned this through like the refuge and some other developments out there, along with just my experience in development. I've taken back properties in golf courses where I had to deal with that shit. I dealt I did a flip in Bighorn that was an absolute nightmare in um Palm Springs, Palm Desert. And that was the most the worst flip I've ever done in my life. In fact, I broke even, thank God. But that was the worst flip. So I started learning more about taking back properties in HOAs where you have golf courses. And if the golf courses aren't doing very well, the values of the buildings or the homes aren't doing very well. So now you have those issues, right? So when you looked at some other things that went on in Havasu, there was another community where there's a there was a golf course that went under and it destroyed the values of those homes, but it was all because the HOAs were tied to it. If I separated the gym, the gym was generating its own income. It's not a part of the HOAs at all. So the HOAs aren't paying for a pool or a community center at all. Then the HOAs are compressed by the residential. The gym now has value because we all know that commercial real estate is valued based on income approach. Now that building's not just a cost to the development where it's just a community center where we buried it on the construction balance sheet, but it doesn't really have value. And then we have to maintain it and service it and pay for insurance and all that. So when you separated it, the that minute we separated and opened it up to the community for income, now that building has value.

SPEAKER_04 2:19:47

Yeah.

SPEAKER_02 2:19:48

Right? So the list goes on. You know this, but my audience doesn't know this. So the point is now you have your separate insurance policy, it separates the liability from the residents on the HOAs. It changes the landscape of the investment, but it's more institutionalized. And so now that's why you're seeing some of the larger players and family offices going, hey, are you doing this in other primary markets? Are you doing this in the Nashville area? Are you doing this in the like kind of outside St. Louis? Are you doing where like where are you going?

unknown 2:20:16

Right.

SPEAKER_02 2:20:16

Because we want to start popping these things up. So the gym by bringing in a medical tenant also generates more revenue because now you have a medical tenant in your building. But what's that medical tenant actually doing? Well, now you have a doctor that, for example, the one that we brought on, she was a female doctor. She actually had a female clinic and she had she was uh she had a birthing center and she serviced basically all the women in our town, and she was the only one. So when she shut her doors, she had hundreds of clients that were like literally didn't know where else to go, you know. So how sad is that? But now she came back out of retirement in essence and is hanging her hat underneath our umbrella. And what's that gonna do now for the community? Right. And now you have a general, you have a doctor that can do general care, right? But then you have somebody I can also focus on athletes and everything else that's a part of that community. So then you have the income and you have the value of the building, and the list kind of goes on and on and on. Those are the strategic investments and plays that are happening in the business or in the world right now that if you're not on the front lines, you're gonna fall behind.

SPEAKER_01 2:21:15

So, so and you you touched on a point that I want to elaborate on. So not every buyer of a barn cave owns an R V or a boat or a plane or a helicopter. I think the beauty of the model, the barn cave model, is that that lower level, that 19 foot lower level, it can be almost anything. Right. It could be a retail space, it could be a dentist's office. You could organize your development around the central gym or around the central gathering place, but you could have retail and commercial spaces in that lower level for people who offer professional services, for people who offer retail, and they live there. The model that I remember now is Reston, Virginia back in the 60s, Bob Simon's project, where they developed the lower level around the fountain as retail, and everybody lived above their shop.

SPEAKER_02 2:22:15

You and I just talked about a project that was in Havasu where the bottom level is all retail and all above everything above it was residential. Yeah, it's standard. That's those those things are doing really well. All those projects are doing well.

SPEAKER_01 2:22:25

That model works, and there's nothing wrong with it. Right. You don't have to put an RV in the barncase.

SPEAKER_02 2:22:30

Right. So but at our project, you you don't you really don't need to do it at our project, but it's not the the building itself can go anywhere, and that's where I think you're going with it.

SPEAKER_04 2:22:38

That's

Making The Lower Level Earn Money

SPEAKER_04 2:22:38

it.

SPEAKER_02 2:22:38

The the but the barn cave, I'll use this, and I know this sounds really funny. I I I've only said this like once before, but I'm gonna say it here. The originally when I was trying to compress our cost, I have some really, really good friends of mine that are like they're you know, single mothers, right? And I love their story, and they're working really hard to buy their first house, and you know, and I I was like, man, if I can figure out a way to compress the cost to help people, you know, in that situation buy their first home, right? I originally was trying to target that. And then when we weren't able to do it, and again, I I say it respectfully to uh you know the way that it's set up in Havasu, but you know, when the utility company takes so many so much of my land for easements, you know, I I can only build so many units, and therefore the costs go up. And so people always ask, why are the costs so high up in in in Havasu? And I've kept my mouth shut for a long time, but the reason why the costs are so much is because the utility company wants to take so much of your land, they only have so much land to but build on. So, anyways, the point is that I was trying to compress the cost for some of my friends that wanted to buy. And I started thinking, going, like, well, what if you just rent it out? If you have a 72-foot deep double wide, right, you can put four boats in there all day long and charge 500 bucks a month. That's two grand in income on rent.

SPEAKER_04 2:24:00

Right.

SPEAKER_02 2:24:00

Yeah, so I'm like, yeah, this may be able to still work, right? So that's something that I think people are have considered too, is the amount of people I talk to that are going to buy one, because remember, we have 48 of them already in escrow in essence my clients that want to buy and invest. But a couple of them have even said they're like, well, we have kids that have they're paying 500 bucks a month or 600 bucks a month for you know rent out there for a storage unit. I'll just pay them half, charge them half that, but they can store it at our unit, right? That type of stuff. So you you have the ability to start generating a little bit more income, or like you said, build another bedroom, build another bathroom in there, customize that space and man cave it like you want, right? Women cave it, whatever you want to call it. Women cave, what is it, she shed, whatever you want to call it. Do whatever you want to do, but a library, whatever you want to do. Yeah. So it and that's what's happening is I think people look at that space and go, first of all, I could store everything I need in there, but two, like I can also build my own little area, my own little shop, my own little movie room, you know, golf simulators. Like the list kind of goes on. So you almost have you're not really when you look at the comps, and by the way, I brought it up last night when we were talking. Lenar, or sorry, Toll Brothers is building homes now with boat and RV storage garages tied to the home. Right. It's a movement for sure because the data doesn't lie. However, you're really spending the money when you look at the the actual comps, the money that you're the what you're paying for for the homes is all based on living space. They don't really go, well, it's like the square footage of the garage is just like an amenity, is really it.

SPEAKER_04 2:25:33

Right? Yep.

SPEAKER_02 2:25:34

And that's what happens. So you look at the square footage of the garage, not the whole product look, and you're paying you the price for the whole entire living space, not just the unit.

SPEAKER_01 2:25:43

We face this argument every day, and it's a fun metric, it's a fun calculation, even in say condo development, like Tierra. So you've got the living space, which is defined as air-conditioned space, and then you've got the balcony space, which isn't living space because it's external, it's not conditioned. But our balconies are 16 feet deep by 30 feet wide. They're basically outdoor living rooms, but they're not counted in the living space. The same thing is true with the barn caves on a qu cost per square foot basis. If you actually factor in the non-conditioned storage space or the balcony space, it's a whole different cost per square foot.

SPEAKER_02 2:26:25

Your cost per square foot. Way down. And then you go in there and you customize it to what you want. You build your own living room in there for you put a big screen TV on the wall, uh couch and a floor, and you do like you just built an entire 1,000 square foot living room. Yeah. And you know, and people like it just it's crazy.

SPEAKER_00 2:26:45

You had a mini split and you've got conditioned space.

SPEAKER_02 2:26:47

There you go. Yeah, even though it's coming with two, three tons. But the point is, is like that's what's happening is these people are you're getting free living space in essence for paying for what like real financial currency is living space.

SPEAKER_00 2:27:01

It's based on the appraisal.

SPEAKER_02 2:27:02

And and and you're like, that is awesome. And mind you, some of these garages in the inside of the project, right? The uh all those drive, all those uh garages are drive-throughs, all those units are drive-throughs. So you get your 14, 16-foot door on one side, and then you have a 10-foot side door on the other side. So you literally have a drive-thru garage. So you have you could stack all your tall stuff on one side, and then you have your standard everyday, more economical two-car garage that you can do them.

SPEAKER_01 2:27:26

If you're a service professional, you you bifurcate the space, you put a wall in the center, you can come in and you have a retail outlet on the front.

SPEAKER_02 2:27:33

Yeah, it does a conference room. You have two front when you have two front uh two front doors. Yeah, you have two, yeah, you have two uh what do you call it? Front doors. Yeah, front yards. So that's really cool. Is there anything else that you want to talk about and share about your story?

Legacy Books Family And Raising Focused Kids

SPEAKER_02 2:27:48

Well, I'll bring the let me bring this up because I want to wrap it up too. One of the things I try to do when I bring on my guests is talk a little bit things that like pull at their heart.

SPEAKER_04 2:27:58

Right.

SPEAKER_02 2:27:58

I know about your personal life. We're not gonna get too much into it. But the one thing I'm realizing is you don't have a lot of people in your life that you can give all of this knowledge and all of this um really because knowledge is the where it's at. And then give like this legacy that you've built to. What's for someone that's been in business and have gone through the things that you've gone through, what can you share with the world that you think people should see or think about, or how they should look at family or love or marriage, or just wherever your heart decides to take this conversation. But you don't you my my the other side of it though is I want to talk about you don't have a lot of people to give stuff. You have kids, but they're in a kind of in a different lane. You know, where what do you how do you feel?

SPEAKER_01 2:28:50

Well, and and a great question, and uh I may stutter a little bit here as I try to answer this. Rightfully so. I've been I've been uh privileged, I've been blessed by an education that I you know somehow by the grace of God received. And then the many the many subsequent blessings of opportunities to go to Washington DC, be a lobbyist, be an architect, go to the National Institute of Building Sciences as a vice president, you know, get married at the Washington National Cathedral, design 3,000 buildings, 46 years of practice, written three books so I think the contributory response would be I wrote my books, Profit by Design, you know, the editions. I wrote the book to help young architects avoid the pitfalls of starting a practice. I I got my license in 1980, and immediately I thought I was Frank Lloyd Wright. And I went downtown in its little neighborhood, and I rented a building and renovated it into a glass box, and I put a sign out on the street, Stephen Beagle architect, and I went sat at my desk in a beautiful space, and the phone didn't ring, and I couldn't figure out why. You know, I've I've achieved that status in life. I accomplished my mission to become a registered architect, but my phone wasn't ringing. And I couldn't figure that out. And this is before cell phones and this is before computers, and it it just you know, I I wanted to you know put a billboard and walk up and down the street and architect available, you know. It was it was so I had no marketing skills, but I wanted ultimately to help the younger architects who are in my condition, my just getting licenses, just starting out to avoid stupidity. Stupidity in those days is defined by you go into business without a business plan, you go in without a line of credit, you go in thinking you're gonna earn business, but there's none on the books yet. I mean you just stumble through life. So that was the original legacy piece is to help those that come after. This is my give back. Right. I'm grateful for my education. This was the give back. Yeah to keep the others safe. With respect to the family, yes, I have three wonderful children, um some more capable than others. Um standard dad response. Right. Being very careful, you know. My children work for the CIA. You know, it's like that. I have to be careful what I what I say. So I love it. Uh so uh, you know, one of I actually have a fourth child who is a stepson, and and you know him, is Jace is his name. And uh I had you know given him the best of the best education, etc. And I was hoping that he could carry on the legacy, that he would ultimately be successful and smart enough to either become an architect or an engineer and carry forward whatever knowledge I could impart. So that's the answer to your question, as short as I can be.

SPEAKER_02 2:32:15

Yeah, that's cool. Or at least you have you know, I think the idea is just you know, I'm at that point in my life, that's why I asked the question. You know, and my oldest son, I think he'll end up, I think he can he'll end up taking over some part of the company. But as a dad, you know what his capacity is now. Yeah, and I'm like, well, I don't know if he'll do this side, but he can probably do this side.

SPEAKER_01 2:32:37

He's a negotiator.

SPEAKER_02 2:32:38

He is. Well, you're talking about steel. My oldest, but yeah, Steel is a negotiator. I think he's yeah, he's gonna be like the attorney in the family, you know what I mean? Or he's gonna be the architect or designer for sure. He's an engineer, his mind is incredible.

SPEAKER_01 2:32:54

He's scientifically oriented. He came right up to me. First time I ever met him was today. He came right up to me and started negotiating. And I was like, You are your dad's son. I mean, what the hell?

SPEAKER_02 2:33:05

You know, he uh he uh when he first started walking, right? Like all boys, when they start walking, they go through what pantries and they go through all your stuff. So we made this little um like drawer in the house where he could put all of his cups in there. The cups at the time had tops, right? So they go spill them and whatever, right? Sippy cups, yeah. So he would model match them, but what was wild, what what was wild is that he knew which tops it was weird because my wife at the time, she didn't, I don't think she paid attention to it. She just would just buy them, but they all had white tops, but they only fit different types. But he would go in there and there'd be 50 of them, and he would pick the same right one with the right top every time every time. He like knew which one that kind of caught my attention. But then because there were so many different colors and different sizes, he would go and get all of them, and it was really kind of wild because he'd pick them and then we'd walk over to the hearth where we had our fire pit or fire, you know, uh whatever you want to call it, the uh where the fire is in the house. I can't believe the word. The fireplace fireplace, dang, jeez. So but he would go up to the hearth and he would put the cups on the hearth, but he would do 'em by height, and then cut then he got to a point where he'd color coordinate them and then he started separating them. Away from each other, not butt up against each other, where most kids will butt him up. He wanted them a separate way, and because there were squares too on the hearth, because they had like a like a custom top that was built. He wanted them on is as and they were all a certain distance away from each other, and then he had to do them in a way where it was color coordinated, and then he started looking at the rainbow, and then he would make them all color coordinated to the rainbow, but they're all the same, like they had to have a distance apart. And that really and this is when he first started walking. So he had so but what's in it to this day, I if I go, let's say we go get a he likes to do puzzles, he's he's a puzzle nerd. He'll sit down and do a puzzle, but he'll do like a three or a five hundred-piece puzzle, but he will not move and use the restroom until it's done. I have to remind him to eat, get up and use the restroom. He'll kind of start dancing. That's how I can tell he's got to go to the bathroom, but he won't leave because he wants to try to finish this thing, and we'll be miles away from finishing, you know, and he's like still trying to make it work.

SPEAKER_01 2:35:19

He's focused. He's so focused. The fascinating part of that to me, and you know how light works, and you know how prisms work. When when light passes through a prism, the the the colors of the light break down in exactly the same way. It's a rainbow every time, and it's the same sequence of color every time. It doesn't change. So when the sun is setting against the rainstorm, that sequence of color organization is the same as it is if you put a flashlight to a prism. If he's organizing those colors in that way, where they're strictly in accordance, he's seen it in his head, right? And he's organizing it that way.

SPEAKER_02 2:35:57

Yeah, it's wild. So now to this day, he cover coordinates all of his clothes. He has to have them hung up. He hates that when they're like not like as soon as they come out of the dryer, he's got to put them up. His kid's different. I've never seen any child like him. And he's very, very relaxed. He doesn't need a lot of people around him. He's he can be just fine doing one thing and doesn't need a lot. He traveled a lot with me when he was first born. I mean, he was on the river at three weeks old. We had him on the boat at three weeks old. So we were not, mind you, this is our last kid. So we we weren't so careful. We knew these kids, these babies are resilient. We're gonna start traveling. So we were in Hawaii. We traveled, we traveled all over the by the time he was six months old, we traveled all around the country like three times. Like we were gone all the time. And we just drug him with us. And he just he just he can he can travel, he can't. I mean, kids amazing.

SPEAKER_01 2:36:48

So very blessed. If if that is that is that kind of an example of the organization of color based on how prisms and how brain breaks down the sequence in a rainbow, if he has that skill set that he has somehow recorded that in his brain, you know, that's Savant stuff. You've got to pay attention to it.

SPEAKER_02 2:37:10

Yeah, he's so he's going to uh he's on he's doing online school, and then there's another school that we're because we never we never got him um any vaccinations. Kara and I never got any vaccinations either. We don't, but you know, the public school system wants to have vaccinations. Yeah. We call him the purebred. He's like the the uh what's the movie uh blade, right? Right, you know, so he has not had one shot, one vaccination, nothing. I mean, this kid is perfect. We had an all Kara had an all-at-home natural birth. This kid was born at home. So we have had and he this kid doesn't get sick very often. I mean, he eats clean food, he sleeps 12 hours a day, his stress levels low. I mean, this kid is it's it's a phenomenon to watch how this kid operates at 10 years old.

SPEAKER_01 2:37:55

I I think you're blessed by all of that, and I want to say this because I when I talked to him earlier today, I asked him where he's going to school. He says, I'm homeschooled, which I thought was wonderful. I homeschooled my daughter, right? For different reasons, right? She couldn't handle school. So I pulled her out and I homeschooled her. But the whole notion of homeschooling and and the syllabus you use to teach in a homeschooling environment, and I know you know Kara's taking care of that, yeah, but that's so important. Oh yeah. And you can get ahead real fast.

SPEAKER_02 2:38:27

Dude, he gets he got the whole week done in a day. He wants to do a whole week and he just wants to get it done in a day, so he can have the rest of the week by it to himself. He's just that kid. He doesn't procrastinate, he gets it done. He's just and then and what's happening is she starts she she's putting him, she's gonna enroll him in a second school. Because she's like, he's that far advanced, might as well just go home in more schools, gives him more stuff to do.

SPEAKER_01 2:38:49

Well, the reason he's ahead is that he's homeschooled. Yeah, and he's been pushed. He's been pushed, and that's a great thing. And they will learn as fast as you can go. Yeah. As fast as you can feed it to them, they'll take it. Yeah. You know, all these people who are from India or China who are, you know, getting PhDs from Harvard when they're 12. I mean, it they're being pushed.

SPEAKER_02 2:39:08

Yeah.

SPEAKER_01 2:39:08

To learn.

SPEAKER_02 2:39:09

It's impressive to see that

Final Takeaways And Closing Thanks

SPEAKER_02 2:39:10

too. But well, Stephen, thank you for being here, buddy. I think we just I you know the whole point of this is just to kind of go on tangents. I wanted everyone to get to know really your background, you know, because it's it's hard for us in just a few hours to try to share on a podcast the level of depth that you and I have gone into, uh, not only from a friendship level, but even from a business perspective on the barn caves or what have you. And I think that's what's morphed our friendship, you know, is kind of going into the design of that and where this is going. And I think you see that's relevant too. And that was just so much, just so much good energy going back and forth on it. And then what we came up with, we're like, well, it's just a huge believer. This is where it's going. And to see somebody that I think what I feel so blessed about is having somebody at your caliber that is just as excited about the project, and you're putting time, I mean, you're flying out here, you're spending time with me, you're doing podcasting, you're you know, hanging out with me, and that tells me that you really believe in this project. So I want that's the takeaway too from our audience is you got somebody at your pedigree that's that helped us with this. You see it, you value it, you're actually making introductions for us to continue to morph this thing, and you don't have there's no real benefit for you to do that. You know, you just you've had 3,000 successful buildings, like why, right? And I think I love your your passion towards your profession and who you are. And again, you want to see the succeed, but you also were also you really are believing that this is the movement of the world. Oh, for sure.

SPEAKER_01 2:40:34

And you're right, I wouldn't be here unless I believed in it. And thank you for acknowledging that. You know, I am here as your architect, as a creative mind to add to your creative mind. So we are a team, and we're gonna be successful because failure is not an option in our world. You know, you're in finance, I'm in design. You know, we don't waste our time. We get it done. So we're getting it done. But it's been a pleasure.

SPEAKER_02 2:41:00

Yeah, thank you for being here, man. This is really cool. We'll have a cigar after this, too.

SPEAKER_01 2:41:02

Absolutely cool.

SPEAKER_02 2:41:03

All right, everybody, thank you for watching and joining. Uh, long one. We went all over the place, but uh hopefully it was fruitful. And again, it was more for you to understand the pedigree of people that are involved in our project. So thank you very much for listening and on to the next.