Unleash Your Inner Rookie: How to Turn a Small Investment into Big Money!

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A single-family home could give you some extra cash flow, but what if there was a way to make six-figure returns from “rentals” that breathe new life into your town? Today, we’ll share a rookie-friendly investing strategy that allows you to do just that, all while using very little (if any) of your own money!Welcome back to the Real Estate Rookie podcast! Katie Neason is a big believer in “investing where you’re invested” and has built a real estate business that allows her to make huge returns while revitalizing her hometown of Bryan, Texas. Unlike normal real estate development, which involves new construction on raw land, redevelopment is the process of taking an area that was previously built on and giving it a new purpose. The best part about redevelopment? Your city might actually want you to do it—meaning you could get all kinds of grants and tax breaks to bring your vision to life!In this episode, Katie will give you a detailed walkthrough of her most recent deal, show you the perfect “gateway” redevelopment project for a new investor (step by step), and teach you how to get started with this strategy using other people’s money (OPM)!
Ashley:Have you ever wondered how investors turn neglected areas into thriving communities and make really great returns? Doing it today, you’ll learn exactly how that’s done using a little known real estate investing strategy that any rookie can start using.
Tony:Our expert guest today has built a massively profitable business using this strategy, and she’ll walk you through the exact steps you need to take as a rookie to follow in her footsteps.
Ashley:This is the Real Estate Rookie podcast, and I’m Ashley Kehr.
Tony:And I’m Tony j Robinson. And give me a very, very warm welcome to none other than Katie Nee and Katie, thank you for joining us on the podcast today.
Ashley:Dude, I’m stoked to be here with two famous people. We were just saying we’re so boring. We need some excitement. We want someone with big personality to really bring some excitement to the show and you couldn’t
Katie:Find anybody. So you
Ashley:Invited me. Well, Katie, let’s start out with the basic. What exactly is redevelopment and how is it different from regular development? Great
Katie:Question. Redevelopment just means we’re building things in places where stuff was built before we’re going to breathe life into underutilized buildings or even vacant lots. So redevelopment doesn’t have to do with whether it’s a renovation or ground up construction, it can be either one. What identifies it as redevelopment is were there existing infrastructures like utilities, roads, and versus development, which is like taking raw land and running those utilities to it so that you can then build on it. So if you think of that pasture on the edge of town that had cows on it five years ago and now it’s a 500 home subdivision that’s development. Now with that said, everyone including myself uses the terms interchangeably, but whenever I say development or redevelopment, everything that we do is actually redevelopment.
Tony:It is so funny. Literally what you said about the cow pastures, you very accurately describe the subdivision I live in because prior to 2017 it was literally dairy farms everywhere and now all these developers have come in and built out the roads, the streets, the schools, the infrastructure, everything. And Katie, I would assume, or maybe you can break it down for us, what is the benefit of redevelopment over existing development? Why does it give you a slight edge when you focus on redevelopment versus doing all the things that a traditional developer has to do?
Katie:Yeah, some of it is a little philosophical in that development just makes our communities bigger where redevelopment utilizes and maximizes the money that the city has already spent on that infrastructure. So maybe you have to upgrade it or upsize it, but the money has been spent. So price per square foot for the financial viability to the city is higher on a redevelopment than when you think of the money that has to be spent, go an extra 10 miles out and run all that infrastructure there. And then from an investor standpoint, it just lets you do smaller projects that have a bigger impact where a development deal where you’re doing a 600 door apartment building or a hundred lot subdivision, that’s a five multi-year type program where in redevelopment you can do it in 12 to 18 months if you pick the right project, the right size in the right town.
Ashley:Katie, where are you choosing to do redevelopment and why are you choosing that area?
Katie:Yeah, so I invest in my hometown and the reason is I strongly believe that you should invest where you’re invested if at all possible. Because when people own businesses and real estate in a community that they know and love, that place will thrive and have unique character that actually draws other people to it versus a cookie cutter town that the institutional investors swept in, built all their products, goes to the next town, builds the same thing, and then we just keep building the same town over and over again. So I strongly believe a nation full of owners is a nation hard to control, which also makes me very happy. And then for us, our asset class is downtown, so it’s not single family rentals, it’s not apartment buildings, it’s not mobile homes, it is downtown. It is literally like a 15 block by five block area. So when we get a lot, we ask ourselves what is the best thing for downtown on this lot to make this neighborhood financially sustainable? And that’s what we build there on that lot. And so our competitive advantage is knowing our geographical area, which is our asset class better than anybody else. So that’s why we choose to do it where we’re at. And it works. I mean the city wants it, we want to do it and financially the numbers work. So we have that benefit where others may not.
Tony:And Katie definitely want to get into the financials of it. I know you’ve got some pretty crazy cool things you’ve been able to do with the city, but I guess just at a high level, how do you identify a property that’s a good candidate specifically for redevelopment projects?
Katie:Well, Tony, I think that’s the wrong question.
Tony:Educate us.
Katie:I think what you got to know first is what is your strategy and then find the lot that fits the strategy. And so for me, a perfect gateway drug into redevelopment would be like a build to sell town home development of maybe four to eight homes. And the reason I love that is the gateway drug is because it’s beginner friendly and that it’s easy to wrap your head around a single family resident, which is what a town home is only being four to eight units. It’s not overwhelming in scope and size and you’re able to provide a product that is underserved across the country. Everybody has a housing shortage, so you’re able to put this thicker, denser housing in a much smaller footprint. So even though price per square foot, it’s more the overall price point is less than almost any other house in the market, which really reduces your risk.And it’s like investor friendly. Your investor can understand it, it has a starting point, it has an ending point, and it’s a great way to test out a relationship without getting into a long-term relationship with them. If things go wrong, sell ’em all. You’re out. You never have to be investors again, and you can do it on a single family lot. Our town homes are usually less than 20 foot wide for four of ’em, that’s a hundred by hundred square foot lot. That is like a residential sized lot. So if you can figure out where in your town the city wants that, you can buy deals right off the MLS because you’re creating a deal that nobody else sees.
Ashley:Okay, Katie, we have to take a short break, but when we come back I want to lay out the exact action plan that a rookie investor can do to follow that exact process of finding the single family home, tearing it down and building the town home. So we’ll be right back with more from Katie. Okay, welcome back from our short break. So Katie, you just laid down the foundation for a plan that a rookie investor could do, looking for a single family home, taking down the home and building these town homes on this. What are some things you need to look for when you’re identifying a lot for this? Do different towns have different zoning where maybe it’s not allowed in every town? How do you actually make this work going from single family to town homes?
Katie:Yeah, so one thing you need to know is your town developer friendly, and we can go through later how to determine that. But that’s number one. And then number two, you got to figure out where in your town you can build it. And there’s two things you can look at. One is the zoning. So townhomes will be allowed in certain zoning. I would tell you what that zoning is, except every freaking jurisdiction has a different name for it. So mine will be different than yours, but if you look it up, it’ll list everything you can build. So if the zoning allows it, but just because the zoning doesn’t allow it doesn’t mean you can’t do it. So the other thing to look for are other townhomes being built because if they’re being built in an area that isn’t zoned for that, that means your town is friendly towards rezoning it if you’re building what they want in that area, because the reality is the city’s vision changes faster than zoning.So they may be wanting that, but zoning hasn’t caught up with it yet. But then you’re going to do a bunch of research on the front end. You need to determine how much it costs about square foot to build this town home. Then you’re going to look at all the comps for how much they actually sell for, and then you’re going to find the lot. You need to know that it’s even a financial option before you spend a bunch of time on getting the lot and much of it can be done ahead of time. Now once you find that lot and you secure it, you’re going to do two things. You’re going to go to your city and share your vision, hopefully visually with them and get their buy-in and make sure they’re actually going to support that project. And then the second thing you’re going to do when that lot is under contract is you’re going to hire a civil engineer to do a feasibility study.And what he’s going to do is give you a concept plan that says, yep, you can get 4, 5, 6, however many townhomes on this lot with parking. This is how it’s going to work. He’s going to look at all of the horizontal infrastructure, which is like the water, the sewer, the storm sewer, and he’s going to make sure that it has the appropriate utilities. And if it doesn’t, what will be required to get the appropriate utilities? And then the number one thing that he’s going to do that is the most critical. You make sure this is part of your deal, he’s going to tell you how much money you have to spend to get the utilities and infrastructure up to speed for what you’re going to build. And the reason that this number is critical is it cannot be estimated. There is no rule of thumb.Every single lot is going to be different. So you can’t say, well, last time I spent or my developer buddy spent this much, or you will get hosed. But once you have that number, you kind of already know your build to cost, you know what you’re going to pay for the lot, then it’s just a math problem. And so you just drop it in the spreadsheet and see if I can sell ’em at market prices. Is this going to make sense for me? As a matter of fact, I even have a super simple calculator, deal calculator, I’ll make it available to your audience. If they just go, let’s call it katie neeson.com/rookie, then I will make available where they can just download it and it’s super simple spreadsheet to see if it even makes financial sense.
Tony:Yeah. Katie, what a great breakdown. I want to recap here. I was kind of taking notes. So if we look at 30,000 foot view for the redevelopment process versus just the strategy, and you said the gateway drug, a few small townhomes, and I know you’ve done some really cool mixed use developments and you’ve done a lot, but I like the idea of starting with a super easy townhome. Once you have your strategy, it’s getting to know your city, the zoning which where they kind of leaning on development and redevelopment. Once you got that know your lot or find your lot and then hire a civil engineer to do the feasibility study. I want kind of understand what comes along after this, but just for folks that have maybe never done this before, what’s the typical cost on a feasibility study?
Katie:For me it’s about 25 to 3,500 bucks. So it’s a cost, but it’s not a huge one.
Ashley:I thought you were going to say thousand, 25,000.
Katie:I know and I’m in Texas, everybody says we’re cheap and easy, my husband disagrees. But that’s what people say. But the other thing for the civil engineer is once you establish a relationship with them and when you close on those deals and they get the engineering work, a lot of times he doesn’t charge me anymore for a feasibility study, but initially you should pay them and you should look for an engineer that’s like a one to two man shop because in redevelopment it’s complicated but it’s small. And if you go to a huge firm, they’re going to want to throw you to their junior civil engineer, but it’s more complicated than they’re probably going to have experience with. So try and target that one to two engineer type firm that works in your town because no city hates anything worse than saying, well in Houston we do it. They don’t care what happens in the neighboring city. They only care about their town.
Tony:So Katie, I guess two follow up questions to that. First, where can someone find a good civil engineer? Are you just going to Yelp and typing in civil engineer? And then second, at what point does the architect plans come into play? Are you doing that before you go out and select the lot or are you doing that after you’ve gotten the feasibility study and you’re finding someone to build something? So where do you find a good engineer first? And then what about the plans?
Katie:So for the engineer, I mean anything word of mouth is best, but if you don’t know anyone to ask for word of mouth, ask the city. So the city can’t say, oh, we like this engineer. But if you pose it correctly like, Hey, I’m going to do this town home development, what are some other engineers that you have worked with that do developments? Then they can give you a list and at least you have something to call from. But seriously, if you Google civil engineer in your town, a list will come up and then the deal is if you’re not sure if you should hire them, you probably haven’t talked to enough of them. So once you call and explain it enough times, you’ll start to notice distinctions and differences and just ones that you mesh with. Like me, I’m kind of a chick that likes to push boundaries and I don’t get along with everyone and that’s fine.So I have to find people that our personalities compliment each other rather than just rubbing each other the wrong way. So a lot of it is just a good personality fit. So on the architect, this is critical because technically the architect can also do what the engineer does. You can kind of pick, but the engineer is going to happen before the architect, and so I always choose him to do it because the architect’s probably going to sub out some engineer anyway, but when do you bring the architect in? So once you’ve determined this is financially viable, you are going to go to the architect and say, this is what I’m wanting to build and here is my build budget. I need you to design within that budget because the biggest heartbreak will be when you go to an architect and say, I’m going to build four beautiful townhomes and then he’s going to design this amazing project you’re going to fall absolutely in love with and it never works financially. So don’t even, don’t crush your heart, just go to ’em and say, this is the construction budget that we need to stay within. You’re looking for an architect ideally that knows construction and what a budget is. And again, you want a smaller firm that specializes in redevelopment so that one, they’re not learning on your dollar, and two, they’re engaged in your project. Architects are artists and so they like to do what they like to do. So you want to find one that appreciates the project that you’re trying to do.
Ashley:I remember when I built my house, my contractor said to me, we had our contractor before we were even ready to build, we knew who was going to build it. And I remember him saying to me as I’m trying to figure out the design and I’m starting to work with the architect, he’s like, just a reminder, every corner costs more money. So instead of having all these jog outs to make this beautiful curb of appeal and all these things, he’s like, just remember every jog out, every corner costs more money. And I ended up just doing one little jog out or two, I guess in one area and said, where my original idea was to have all these different things and it saved me a ton of money by just even that one little piece of advice. So I really like that advice of telling them what your budget is ahead of time and where you can kind of cut costs that aren’t cutting quality.
Katie:Exactly. What you want to do is pick what is going to be the unique character and that’s what you spend your money on. But everything else generally has to be relatively basic. And all of those trolls that love to hate me on social media, every time I post the cost of my projects, they’re always like, how did you get that roof so cheap? Oh, that’s fake. You have to be lying. I’m like, do you understand how simple a rectangle or sometimes a single slope roof is? It’s because I design it so that it isn’t expensive to build.
Ashley:So let’s talk about that, the price and where to actually get the money from. So I’m a rookie investor. I don’t have a ton of money per se, so how do I get funding for this and how much capital minimum do I need to have in my bank right now to actually do this strategy?
Katie:Great news, Ashley, you can be destitute and broke and still do this, but I don’t recommend it. So the reason I love the little townhome project that we talked about is a gateway drug because it’s super clear when you’re raising money. So the very first townhomes we built, we put zero of our own money in it. So how we did it was we raised the equity, which typically is going to be 25% of your all in cost. So if it’s a million dollar project, it’s going to be 250,000. That’s what you’re going to have to put in. There’s not a lot of creative fancy financing in development, so get over that. But that 250,000, you can raise that from your investor. You’re going to find the deal, oversee the development, oversee the construction, sell the product, and then you can split it 50 50 at the end of the project.So that’s an easy way for an investor to understand it and for you to get in with no money down, but just because you do not have money in the project does not mean you don’t need money. So you things happen in every asset, but in development you have to finish the product or you’re screwed. There is not a great plan B for a half built house and so have some liquidity even if you’re not putting it into the deal. And I would say 15% maybe would be a good number, maybe that may be high just depending on how big the project is. But if you have 25 to $50,000 that you could put in if you needed to, so you wouldn’t have to go back to your investor and you have some liquidity that’ll make you look stronger for the bank, the rest of the money is just going to be a construction loan from your regional or local bank.Just go talk to a bunch of them. They know development, they do development doesn’t mean it’s easy, but they’re the ones you’re going to get the money from. And so if you’re like, I don’t have experience, no bank’s going to lend to me, yada, yada, present it better, tell them I’m going to use this contractor who’s been doing this a long time. I have this architect, this is what he does. And so you can build a team of support around you without having to be the only person on the team that the bank is looking at as far as experience is concerned.
Ashley:Katie, just to follow up on that piece, finding the investor, was this one investor that you found that wrote the check, it’s not like you’re going out and doing a syndication and raising money and having to get an SEC attorney and things like that. What was that kind of process like and how complicated is it to add an investor and was it equity investor, was it they were just the debt on the property? Kind of go through that a little more in detail.
Katie:So you can make it as complicated as you want to. I personally am scared to death to take money from people that I don’t know. So all of my investors, which I only have four or five of them are within my network of people that I’ve known for a long time. And when you’re talking about 250,000, I know that sounds like a lot of money, but it is not a lot of money for an investor who is used to investing. So that can be one investor, it can be two. I think our first deal, we had two, maybe even three investors on it and they just split it equally and they were equity only. Now on the debt side, you can decide we were the personal guarantees you will personally guarantee in a development loan, they’re not going to have some project where you are some loan product where you don’t have to personally guarantee.I always tell my investors, you will not personally guarantee the loan. So that limits their risk. They know the most they can lose is what they put into it. I personally guarantee it. Now you can negotiate it however you want with your investors. Our investors are always equity investors. The bank, the commercial bank is the only debtor. Commercial banks when they’re doing construction loans don’t really want to have another debtor who would be private money who would be in a second lien position. To them, they don’t really like that. So it’s much cleaner for the investor to just be an equity partner. And for them it’s more beneficial. They get to take a part of the upside in development. Either you finish a product or you don’t. So they’re going to take the downside regardless. So you might as well or they might as well from their perspective also get in on the upside.
Tony:Yeah, I love the combination of the small local bank. Ash and I are always big proponents of building relationship with those folks because I would assume you could probably walk into your local bank and say, Hey guys, here’s my plan for this new development, what do you think? And you can’t necessarily do that at your local Bank of America or Chase branch, just kind of knock on the bank manager’s door and say, Hey, look at this deal that I’m looking at.
Ashley:You know what? I want someone to try that sometime though and to see what actually it is kind of an assumption we’re making. What is something actually amazing
Katie:Happens? I worked for a national bank as my first job out of college. I totally think you should do it. And whenever they tell you, dude, we’d love to do that deal. They’re lying. They have no control over it so they can tell you whatever they want, but it ain’t true.
Tony:That would be a great YouTube video. It’s like we take the same deal into a bunch of local banks and then we take it to Bank of America and Chase and see what they say. So Katie, I want to look at a deal maybe from start to finish if we can maybe think about a recent deal. I know you got a really cool one, you kind of got the city to pay you for doing this deal, but can you give us the 30,000 foot view on this deal? How’d you find it and what did you end up building?
Katie:Yeah, so I would say right in the middle, but we’re past middle of a three story mixed use building that has a total South Beach vibe. It’s my most exciting project. I love it so much. So the first floor is going to be retail commercial with one residential loft. All of our mixed use buildings have one residential loft on the first floor because it eliminates the requirement of an elevator. And then on the second floor, we’re going to have seven residential lofts for long-term tenants. And then on the third floor we’re going to have seven residential lofts for short and midterm tenants. So we’ll have three sources or streams of income under one roof, which I love. You have diversity and flexibility and because of the zoning, I don’t have to worry about short-term laws for short-term rentals, it’s always allowed because hotels are allowed in the zoning as well, and I can move it around however I want to within that building.So on this deal, it was a lot that I think it’s like 115 foot by 75 foot wide. So single family lot had a house on it that was on the condemned list with the city. And the way I found it is I was interested in a totally different building and I heard that the lady who owned the restaurant’s, brothers owned the building I wanted. So I went and ate her Mexican food restaurant and asked the waiter if she was there and she came out and talked to us and I said, Hey, do your brothers own that building down there? And I knew it was her. I looked it up on the appraisal district, figured it out because of the names. And she was like, yeah. I said, well, do they want to sell it? She goes, well, I don’t know, but I have a lot one block over.Would you be interested in that maybe. And so that’s totally how I found this lot. And then she wanted $150,000 for it, and I thought, that’s too expensive. That would be the most expensive. We’ve paid for a lot. So we went back with two options. We said, we can give you $110,000 for it and I will give you cash or I’ll give you your 150, but I want you to own or finance it on a 30 year mortgage. And so we gave her a little bit down, she financed the rest, and that was a $600 payment that we could totally afford while we did all the design and prepping to get ready to build the building. So that’s how it all started. Now ask me more questions about it or I’ll just ramble on forever.
Tony:I mean, first I’ve never thought about looking at the condemned properties list for a city actually. Have you ever, I didn’t even know that list existed. Have you ever heard of that before?
Ashley:Well, actually as soon as she said that I thought of a specific property that I’ve walked by that’s in a great area that has the notice that it’s do not enter, it’s been condemned and it’s basically waiting to be torn down I think. And it made me think like, wow, I should actually find the owners because that is a great location to actually rebuild something there.
Katie:So your city probably has a building standards commission and all of those go through the Building Standards Commission. So if you find out who is the head of that commission, you can get notice of what buildings are on the list to be condemned. And it’s a little bit like the foreclosure notice. They have a time period to do whatever they need to bring it out of condemnation. So it can be like a cat and mouse game. But yeah, you can definitely track the houses that are on the list to be condemned and torn down by the city.
Tony:Katie, we’re very much enjoying the story and we want to hear kind of how the seal is continuing to come together. And we also want to hear about your safe framework and how rookies who are listening can leverage that to start doing redevelop in their town. But first we’re going to take our last ad break and we’ll be right back afterward from our show sponsors. All right, guys, we’re back here with Katie enjoying this conversation so much, Katie. So we just started talking about a deal you recently did found a killer deal at a Mexican food restaurant, which is now going to be my favorite place to go find deals. Once you tie this up, I know you’ve got the mixed use, but I guess kind of walk us through, did you already have the idea of making it this kind of three level mixed use or was it after the feasibility study that you said, okay, I think this dream that I have finally makes sense for this lot?
Katie:Yeah, so it’s on one of the two major thoroughfares in our downtown. So we knew we needed some sort of retail on the bottom, but our number one mission is heads and beds because the more people who live downtown, the more sustainable the commercial businesses can be. And so we’re always trying to move more people in. So it naturally lended itself to a mixed use building. And as far as whether or not it would be feasible, we had done this enough to know, I mean, I think have a 10 foot setback. Other than that, every square inch of this property is going to be income producing. So it’s a, I dunno, 11,000 square foot lot with a 30,000 square foot building or something like that. So those numbers usually will work for you. But I will say this, we spent money on getting the whole building design, which by the way was about $200,000 to put that in perspective.And that was money out of our pocket to get the architectural civil, all the plans done and then interest rates shot up like a sore an eagle, and we put it on pause. We didn’t know how high they were going to go. It definitely hurt the cashflow and the returns to the investors. And then as they started settling back down and we basically said, Hey, what can we do to juice revenue? I hate running a short-term rental because, well, hospitality is not my gift, but we were like, you know what? This works. If we can treat this kind of like a boutique motel in our downtown with the South Vibe Beach, it totally makes sense. So we were able again, to shift and kind of create the income streams to make the deal viable. So the all in cost of this thing is just over $3 million, 400,000 of that is pre-designed startup costs, working capital, and then it’s about a $2.6 million construction project.And then when we said, Hey, this building could work, but we need to minimize costs to give us as much cushion as possible in uncertainty, we went to the city. Now this building got picked up by our local news because I had posted a picture of it and the news called me and said, we want to do a story on this building. It looks really awesome. And the city, every time we have to present in front of city council, they’re always asking us what’s going on with that building? So it’s really like an attention getter. So we went to the city and we’re like, look, you guys want this building, the town wants this building, we need help. And so they said, okay, well how could we help? That makes sense. What are you looking for? Why don’t you help us with the water infrastructure, the public parking, the dumpster, all the stuff they love to put on the developers? And they were like, okay, get us a bid. So basically it ended up being about 150,000. We convinced them to reimburse us for about 116,000 of that. So at the end of the project, they will give us $116,000. And what’s awesome is then we’ll just stick that in reserves. So now our reserves are totally funded and we can start paying dividends as soon as the building is stabilized.
Ashley:Now Katie, who specifically should someone talk to? Is it just walking into the town hall and talking to the clerk? Is it calling the code enforcement? Is it going to the planning board meetings?
Katie:That’s such a good question. Like I called the city, there’s only 40,000 people there. What does that even mean? So you are looking for the senior development planner. So you want the oldest guy on the team and you want to go in and talk to him about your vision. You are not asking him what you should build on the lot. They don’t know, not their job. That’s not the approach they want. You want to go and show them some pictures and have this amazing idea that aligns with their comprehensive plan and say, this is what I’m wanting to build, but that’s who you’re talking to and you’re looking it up online and you’re getting his first name. If you call and ask for him by title, you’re not going to get him. You’re totally going to get the gatekeeper. So get his name online, call him like your best friends, and you know him, and that’s the guy that you want to try and get in front of
Tony:Really quick, just I googled my city and I typed in development planner and a few returns came back, but one of them is the development advisory board. And it says that this board meets at 1:30 PM on the first and third Mondays of the month at City Hall. It’s like, man, there’s literally a group of people who talk about developing my city that I didn’t even know existed. And they have their meeting times listed here publicly on the website.
Katie:Yeah, cities are kind of moving towards that. They’re all different, but they’ll get everybody in the room where you can sit in front of ’em with fire marshal, the utilities company, the city planner, and you all can strategize about your project. Ideally, you’ll get in front of the planner first so that you’re not walking in there and getting attacked by a bunch of people that when you don’t really know what you’re doing, you want to already have talked to someone who’s going to be on your side and kind of fight for you when you don’t know what the hell you’re supposed to say or do. But yeah, those are great meetings to get everyone’s temperature to really know how hard or what the struggles are going to be.
Ashley:Well, Katie, thank you so much for joining us today on this episode. Before we wrap up though, I just want to know, are there any blind spots that a rookie investor should be aware of before they go into redevelopment?
Katie:Yes. One is kind of what Tony alluded to earlier. A lot of people come to me and say, I have this great piece of property, what should I build on it? And that is the wrong approach. Figure out what you’re going to do, what you can be the best at, and then go find the property that fits that strategy. And then the dreamer, the one who sees this amazing building downtown, and they fall completely in love with it. And they’re like, that’s the building I want. And they’re so focused on it. Opportunity is flying past ’em and they can’t even see it. And they have zero control over whether that’s going to financially work or if that owner is ever going to sell it to you. So cast a wide net, don’t fall in love. And then you need to know, does your city actually want development?And you can determine that by looking around. Don’t listen to ’em. They all say there’s a housing shortage. They’re all going to tell you they need more development. They’re liars. We’re looking for action. So are they investing infrastructure, putting in sidewalks, putting in trees, making it pedestrian friendly? And two, are they offering development grants? Google your city grants. If they are, they’ll be on there. Then they’re invested in you being successful and they’ll help you. And then the other thing is make sure your vision aligns with the cities. If I were to try and build what we build six blocks to the east, it would be very different. The city would not let me do it. And I would think they hate development, they hate me, they hate everybody, but it’s not true. Look at your city’s comprehensive plan. See what they want in that area. And then if you want to build that, align your vision. Do not try and build something they do not want. They’re hard enough to work with when you’re pulling in the same direction.
Ashley:My dad, he owns a building that he runs his business out of, and he is in a great little main street, and there is another investor that has bought up a lot of the properties on that same road. And he approached my dad and said, just so you know, there’s this grant coming out that the town is going to do. You have to fill out an application because the better my dad makes his building, the better it’s going to be for this other developer. So reaching out to other developers too that are already doing things in those areas, or even just the property owners that are in the same neighborhood, the same area view if they know of these things. And my dad actually had me build out a scope of work, like a 1.2 million scope of work and submitted it to get this grant.And right now he’s in negotiations with the town to try to get the maximum, and they’re trying to barter with him like, whoa, can we take away a little bit of your grant money to give to this other business? And things like that. But it was so interesting to see my dad, who’s never done any kind of development or really hasn’t purchased any property except for their house, their cabin that they own, and then his business to be maybe doing a 1.2 million redevelopment on his property. So if my dad can do this process, you can do this process for going out and getting a grant from your town or village too.
Katie:I love that. He’s the first mover. That’s what you want. You want the owner occupied businesses to be the first movers, the ones proving that the revitalization is sustainable.
Ashley:Well, Katie, thank you so much for coming onto the show today. Where can people reach out to you and not send you their lot with what they should do with it, but maybe tell you what their strategy is and where they should be looking?
Katie:I love that. If you just want to follow along the journey, see what kind of crazy projects we’re doing, or just jump on the hater bandwagon, totally find me on Instagram at Katie develops. And if you’re interested in the Build to Sell model, seriously, go to do that download for the Build to Sell deal calculator, katie neeson.com/ what’d we say? Rookie Pod. And it’ll be there for you. And I would love for you to own a piece of your town and make it more beautiful for generations to come. So you can find that at katie neeson.com/rookie.
Ashley:Thank you so much, Katie, for joining us today. I am Ashley. He’s Tony. And we’ll see you guys on the next episode of the Real Estate Ricky Podcast.
 
 
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