00:00:00 Mike Neubauer from Grand Vision Companies discusses the benefits of new storage development. He is currently at a site where they are preparing for final plot approval, which involves subdividing the land and getting approval for the groundwork. The eight-acre property was previously a field and was identified as not being used for its best purpose. After identifying its potential for storage development, they went through the process of annexing it into the town, obtaining a zoning change, and a variance for storage. The value of the property increased significantly after these approvals, making it a worthwhile investment. New development, such as this storage project, offers investors a blank canvas to create value where there was previously none.

00:05:00 Mike discusses the challenges and timeline of their first development project, which involved turning land into a storage facility. The process began with identifying the best use of the land and determining profitability. The speaker mentions encountering numerous obstacles, including zoning variances, annexing, rezoning, public meetings, contractor coordination, and weather delays. These obstacles added significant time to the project, with a rough three-year timeline from purchasing the land to the current stage. Despite the challenges, the speaker emphasizes the learning opportunities and potential for higher returns, but warns that new development projects are not for those seeking quick returns. This was the first development project for the speaker, who had previously only worked on residential and multifamily homes. The project involved public infrastructure, annexing, and zoning, which added complexity but was not overwhelming due to the size of the parcel. The speaker paid $125,000 for the property.

00:10:00 He then discusses the progress of their storage facility development project, which they refer to as phase one, from July 2021 to the upcoming meeting. Phase two involves laying gravel, concrete work, and the installation of underground electric and plumbing. The buildings will be constructed on the concrete pads, followed by asphalt paving for the parking lot and driveways. The speaker explains that the most common method is to build the concrete slab first and then construct the buildings on top. They also address concerns about the proximity of railroad tracks, stating that the vibrations do not affect the buildings significantly. The financing aspect of the project involves the bank assessing the borrower's financial background and experience as risk mitigators. The speaker mentions that they bought the land for the project in cash to expedite the zoning process.

00:15:00 Mike explains the importance of having a strong financial standing when seeking financing for real estate development projects. He explains that banks prefer investors with a solid financial history, including a strong balance sheet and liquid assets. For those with less experience or limited resources, partnering with an experienced developer or securing a sponsor can help get a project off the ground. The speaker shares a personal story of having to partner due to unforeseen circumstances and the benefits it brought to both parties.

00:20:00 The speaker shares his experience of learning the ins and outs of building a storage facility through a unique partnership. Instead of paying to attend a trade school or university, he is gaining hands-on experience while also earning a salary. This approach, which he refers to as "reverse tuition," offers both financial benefits and a sense of pride in creating a safe and visually appealing facility for customers. The speaker also emphasizes the importance of this experience for his son, who enjoys working outside and operating machinery, allowing him to live out his childhood dream and gain valuable skills. While it's possible to hire a general contractor to manage the project, the speaker enjoys the learning process and being directly involved.

00:25:00 Mike discusses the unexpected challenges and learning experiences during the development of a $4 million project. He mentions that while he enjoys the learning process, some aspects, such as erosion control and environmental issues, require extensive knowledge and resources. The speaker also talks about the importance of maintaining infrastructure like pipes and the consequences of neglecting them. The project has encountered unexpected delays due to equipment orders and inspections, but the speaker remains optimistic about completing the development by fall 2024. Additionally, they plan to start a small business in erosion control to help other contractors with the challenges they faced during their project.

00:30:00 The speaker discusses the importance of identifying and solving problems in business, specifically in the context of their own experience in real estate development. They identify a common problem in the industry, which is the headache of rehabbing storage facilities, and express their intention to solve this problem for other developers and contractors. The speaker also talks about their learning process and how they plan to apply it in the future, mentioning that they are currently testing the development process to determine if it's worth the investment. They also touch on the topic of cash flow, explaining that it may take longer to see cash flow from a development project compared to a rehabbed property.

00:35:00 In this section, the speaker discusses their approach to developing a self-storage facility and the financial benefits of doing so. Unlike most developers who sell the property to a storage operator after development, this speaker intends to be the operator. They explain that the cash flow from the facility is expected to be around 8-10%, and they have paid approximately $170,000 to develop the land and obtain necessary zoning approvals, increasing the property's value from $125,000 to $1.1 million. The project's total cost is $4 million, with an appraised value of $6 million. The speaker plans to use a loan and hopes for a higher return on their cash investment. They acknowledge the temptation to sell for a large payday but believe the long-term knowledge gained will lead to greater returns in the future. The speaker shares their past experiences with selling properties during the crash and regretting the missed opportunity for long-term gains.

00:40:00 Mike discusses investment opportunities in real estate, specifically storage facilities, for those who want to be passive investors. He explains that if an investor has the money but not the time, they can hire professionals to manage the project or invest with companies like Grand Vision, which has a team of professionals handling various aspects of the investment. The speaker emphasizes that this is the most passive way to invest, as the investor only needs to place their money and let the team manage the project.