The intent here is to give a pre-launch view of Hayden Farms, our next project coming to the Phoenix Valley. The project will consist of 39 fourplexes and 9 duplexes in Surprise, Arizona. This project has been a long time coming and we're really excited to be finally able to launch. 

In the video:

• A look at the real estate market in Maricopa County

• Official Hayden Farms announcement

• Market info for Surprise and the surrounding area

• Breakdown of the Proforma, Returns, Timeline, Plat Map, etc.

• A brief history of FIG and an intro to our team

• Summary/Q&A

If you'd like to reserve a unit in this project, contact the FIG team by visiting fig.us/consult

Transcription of the Hayden Farms Video Breakdown

This is Steve Olson with the Fourplex Investment Group. We'll talk a little bit about who FIG is, give you a market update on Arizona, zero into the county, as well as to the specific area where Hayden farms will be located and break down some of the numbers and timelines and then we've got a couple of people that submitted questions in advance that we'll go ahead and address as usual.

Intro to FIG

FIG is not a company. It's a marketing platform, right comprised of five different companies that if you've spoken with us before, you know what those are, but those are developer, builder, brokerage, property manager, and Hoa. All those together comprise what FIG, the four Plex Investment Group is. So all this information needs to be verified by you talk to your legal and accounting and real estate advisors. Basically a translation we're going to tell you a bunch of stuff, but you should verify it, make sure you're comfortable with the facts as it as you would with any investment. So I'm Steve Olson. I'm the Director of Sales here at FIG and I carry licenses in a couple of different states. Chase Leavitt is with us as well and Sherida too that help drill down on the Arizona market specifically, and they'll be the ones to present a lot of the specifics of the Hayden farms project here today. And some of the people behind the scenes over here at FIG.

Mike Miller is the original founder and principal. On the build side, Jacob Erekson oversees the actual construction at the sites, and Brian Schnell the operations of the company as a whole. Corey will be the one that you really get to know down the road. He does the property management for max, which is the property manager underneath the FIG umbrella managing all the states that that FIG currently operates in which is Utah, Texas, and Idaho. And then shortly, opening up shop there in Arizona, many of you have already spoken to Lane is a really big key piece of the team here.

He does a fantastic job juggling all these things over multiple markets. Nobody does more four Plex loans than then late Aldrich and it's not even close. So he knows a lot of these pitfalls that people run into with construction loans, as well as the long term loans associated with the four Plex. So if you're going to do business with us, you're going to invest in a fourplex. You'll be talking to 

At some point, if you're going to be using financing, he even and he does this on the house even gives advice to our commercial finance clients from time to time because some people do need to use commercially if they're doing like syndication or something maybe in an opportunity zone. We've done a lot of business right. We've been doing this for a long time now. Thousands and thousands of doors over multiple states. This is just a snapshot of some of them. There's some of these are rendering. Some are live pictures. Some of these communities, for example, Edgewater or Brickyard, or Easton Park, or Payton's quarry, these are communities that are up and running. They've been built for years. Brickyard more recently, but Eastern parks been there for a while. And they're consistently running when they're stabilized an occupancy rate in the mid-90s. So they work really well. Other of these projects, Laguna farms, we're just having our first closings in as well as Pine Ridge farms. Starwood farms are getting closer to to the end. We have a few closings left

There are the first couple of leases there in Texas getting signed on the first day. So these are all over the map. But that one in the top left, that's where FIG was born steeplechase in Pleasant Grove, Utah. Very first idea Mike Miller, who I introduced to you a few minutes ago, hatched the idea that Hey, could we build duplexes, go pre-construction give somebody something new to do. And it was a very innovative concept back in 2010 2011. in that range, when we were still very much in a deep recession and land was heavily discounted, but nobody was buying and we've been able to evolve it into multiple communities and thousands of doors since there and we're grateful for many of you that have done business with us in the past and continue to do so. So what we're going to do is we're going to start getting into some specifics here. Some of you have never talked to us about Arizona yet. It's new, we've started our first project there called the village on Greenway. It's not that far from this one in surprise that we're going to be doing but I'm going to kick it off.

To share it up for a few minutes, who's going to tell us a little bit about the macros? People ask why Arizona? Right? It's, there's a little bit of a rep. You know, we know that Arizona was partially ground zero for the foreclosure crisis back in 2008. So why would we be crazy enough to do it? So I want to introduce, share it and talk a little bit more about what we like about the market. Share it. Are you ready to go? Yep. Thanks, Steve.

How is the Multifamily Market in Maricopa County?

So we've had a lot of fun digging into Arizona and going down there quite often kind of getting to know the lay of the land. And it's been fun. Here are some key metric comparisons. So we get Arizona as a whole and then Maricopa County as surprises located in Maricopa County. Few things just to bring up a median age 36.6, median household income is 65,000 a year. And then also if you want to look kind of side by side, Arizona as a whole, their median property value is 241,000. But in Maricopa County, where we're located is 276,000.

Maricopa looks a little bit better number-wise than Arizona as a whole. Next Maricopa County, we're going to dive in a little bit deeper on that it is the state's largest county and the fourth most populous in the US. So it has a lot of the key cities that most of us know Phoenix-Mesa, Scottsdale, Chandler, Tempe, surprise El Mirage or our other project his rents Rose 5.2% annually in the Phoenix metro in the last year, which is great. We love that median overall rent being at 1545. On these ones, we're going to be right around that price, maybe a little bit higher because of the amenities that we offer, and that were newer. A lot of our competition is older. They're starting to do some building but just not as much. They're rehabbing a lot more. And then down at the bottom. It just says Phoenix boasts the fifth-largest growth and number of millennial residents, which we all know they do not like commitment. So they're a great tenant.

want them to come right from us they don't like they don't have that American dream like a lot of us do. So onto this next slide. So these industries with higher employment. I know one thing we want to just to touch on, we talked about this earlier as the sales team just said, Hey, you know, retail trade has been impacted everywhere. Arizona is no exception to COVID. Once everyone gets kind of a better grasp on that those numbers that business will kind of flourish a little bit more. We want to obviously touch on that but things are growing, there is still growth, you know, there's health care there, there's manufacturing, there are transportation and warehouse, there are all kinds of a myriad of employment opportunities for somebody in Phoenix. They're having quite the growth of companies coming in you know, we just have a new article that hit that said, Amazon is setting their third distribution center in Goodyear, you know, we always like for Amazon is Yeah, Goodyear being just south of surprise and, and we posted a blog entry to about this recently shared I can't even remember their name, but big time.

He's chipmaker moving into the west side of Phoenix, they're moving most of their manufacturing there. And that kind of gels with what you saw on what the median wage is. in Maricopa County, right, you can see that there's a lot of those kinds of jobs and a clear demand for good clean, affordable rental housing and the county. So on this next slide, it's kind of a big Google Map View of Surprise, Arizona, we kind of just wanted to let you see where Phoenix was Glendale, you know, we talked about Goodyear, you can kind of see it at the bottom left side of the map there. So on this next slide, we did more into the location. So you're about 30 minutes from downtown Phoenix. From the University of Phoenix Stadium, you're 21 minutes as us West Campus, 33 minutes you know, your 30-minute drive to the airport. And then we also put some other locations here. You know, if you want to go to Las Vegas, you're four hours and 20 minutes roughly San Diego four and a half, five and a half hours an LA five hours and 41 minutes.

60 freeway that cuts right through surprise and a mirage, that's what you take to get up to Vegas. And you'll go down to the 10 to scoot over to Southern California. So they kind of have the spoke going kind of as you've been on any of our webinars, we've talked a little bit about the Houston area, Phoenix, or Arizona is kind of doing that same thing where they're kind of having this smoke that goes around, so their freeway system. Now the joke in Arizona is everything's 30 minutes away. And that's because they have so many different freeway systems that it's easier to get around onto this next slide. So we have Hayden farms. So you can see where we're located where that FIG logo is up. On the top left hand, obviously we have the different freeways that are there, and then a two-mile a 10 mile and a 20-mile radius. You can see where the Phoenix airport is, you can see where the Cardinal Stadium is. kind of gives you another little overview of what's going on.

Market Info for the Neighborhood around Hayden Farms

This next slide dives a little deeper in everyone wants to know, you know, where's the McDonald's? Where's the Walgreens? How close are these amenities to our location? So you can see where the big logo is. Right next to it. There's that Panther. I'm hoping it's a Panther. Let's just pretend for the sake of this. It's a panther that is actually a high school that butts up to the back of our project.

Hancock builders and Toll Brothers, they own the land that's just south of us. And they are building single-family homes in there and it's going to be phenomenal. We also have Lennar homes kind of off to the side. There also is a Costco that's been built. I think chase mentioned earlier, it's about five minutes away if I remember correctly, and but you know, Costco there. They've got grocery stores, they've got Walmart, they've got Kohl's, so easy access to those things. The Ford, Chevy, and Toyota, those are representing dealerships right there that that interchange off of the 303 everybody has these massive areas of car dealerships in their city, right and that's there are just tons of cars, right there. So that's where a lot of the biggest dealers have gravitated to.

And to give you a kind of a better idea if somebody wants to Google map this themselves are crossroads. We're on cotton and cactus in surprise, just so that if you want a Google map, I know I'm a big Google Map person, I like to zoom in and out and try to figure it out. But that's kind of the crossroads. So you can see exactly where we are. So that kind of gives you a little bit of an overview of the area. This is kind of why we like it. This is similar to why we go into other areas, and then I'll turn it back over to Steve and he'll pass it off to chase. Yeah, so thank you for the overview. But the bottom line is, it's important to remember in the Phoenix metro, if you live there, you already know this, but sometimes investors get into the mentality. Well, how far is it to downtown? Well, Phoenix is such a gigantic Metro that you don't necessarily work downtown. In fact, one thing we like about this project is it'll really cater to a lot of logistical employees running up and down the 303 down to the 10. If you drive that you see all the warehouses and logistical

Places going in, and that it links up with the 10. That's free it goes across the whole country. Right? You go at the Santa Monica, you take the 10 quid I think it dead ends somewhere in Florida if I recall. So this thing goes across the entire southern strip of the United States and a lot of those logistics because of Arizona, is very business-friendly and get good employees, you've got a good cost of living, we really are targeting that. That kind of demographic, it reminds me a little bit of the project that we did called colony farms in magnet Utah. Lots of jobs that can't necessarily or don't want to buy class housing. Some of them can, but they need something clean, new, and affordable to live in. And we're really chasing aggressively after that. So Chase, why don't you take us through some of the specifics of the actual project itself if you're ready to go, sounds good. We're super excited about this project. I'm going to go through the highlights and the project breakdown for Hayden farms.

As you can see right in front of you there, we're working with 174 units. We've done projects that are bigger, we've done some that are smaller. So this is kind of right in between. We're working with 39 fourplexes. And we've mixed in a couple of duplexes, each four Plex or duplex, they're going to have a one or two-car garage that's attached to the unit. These are going to be townhome-style for plexes or duplexes. And we'll get into the renderings a little bit more here in a minute. But we're super excited about it. We've done the townhome-style before in the past in different states in different locations, and it's been very popular for our investors.

And also for the renter, they like renting that type of a unit. There's the HOA fee breakdown, it's $200 per unit per month. It's important to understand there what you're getting for that because there's a lot included in there such as the water, sewer garbage, your extra insurance, I mean, it's right in front of you. So it's important to know you're getting a lot for it. If the water and sewer wasn't an HOA you'd have to pay for it. Otherwise, we're able to bundle that into a fee by having that in the HOA at a lower cost.

Project Map for Hayden Farms

The starting price per unit we still need to go through and break down and we'll stagger this a little bit but the base price is going to be around 799,900 for fourplex next slide here is going to show you the plat map or the Project Map. You can see where the pole and clubhouse is located on the north end the project on the right side you can see cotton lane chair to talk about our on cactus and cotton, there's a cotton lane off to your it's going to be on the east side. And then you can see the breakdown of all the different fourplexes. You can see where some of those duplexes are mixed in there if it's attached to I guess if there are six units in a row, that means you're going to be working with a fourplex and a duplex right there. And then throughout the project, it's really nice because you're going to have a dog park, you're going to have some extra turf greenspace couple pavilions. We're really liking how this is turning out. As we flip over here we're going to take a look at the renderings. This gives us a better look at the floor plans and what I just talked about. We're going to have the de Linda floor plan and that's going to consist

For units that are two-story units, each unit in this development, whether it's a duplex fourplex, whatever for the planet is it's going to be three bedrooms, two and a half bath. And it's going to have a one or two-car garage as attached. And this slide here is just giving you a visual of what that looks like. You can see there that the Tucker floor planets can be in the middle towards the bottom, that's going to most likely have either one or two to store units on the end. And then you're going to be working with either two or three, three-story units in the middle. So that's the Tucker four plan. And then the dilemma is going to be at the bottom left there, the two-story unit that I talked about earlier with a one-car garage. But as you're looking closer at this project, and as you're talking to one of us, you're going through the plat map just chat with us and we can let you know which floor plan is what and we can talk you through that. So it all makes sense.

Hayden Farms Investment Proforma

This slide here is talking about the proforma analysis. We have a different pro forma with more pages that we send out. I know a lot of you have probably seen that before. And so if you haven't seen that, we can send that to you so you can see the breakdown. This is mainly just the highlights that we love.

To talk about and a lot of our investors are looking for they're wanting to know or projecting for girlfriends, they want to see what the operating income is going to be per month. And also on an annual basis, they also like to see what the expenses are going to be. And so we've gone through and laid out those expenses as Steve talked about before, this isn't the first time that we've done this, we're very familiar with what to expect as far as expenses go. And so that's, that's why we provide that in all our proformas. for investors, then you can take a look at the cash flow, what you're looking at per month, and per year. And that'll help us to figure out a cap rate, which we'll talk about a little bit later on. But if you ever have any more questions on the numbers, feel free to reach out to us because we like talking numbers, it's all about the return in what you're getting. And that's what a lot of our investors are looking for. They want to park their money in a property where it's gonna be low maintenance, and it could be working for them. And so it's important that we dial these numbers in and we're more than happy to talk through this with you at any point some of the highlights there just going into the numbers a little bit further, the cap rate at that 799 900 is going to

about a six and a half cap, just under that, you can see the yearly cash flow. And then we've highlighted the market value, which is 875. We had to back into that a little bit differently because we haven't really established much of a market there. We typically do this when we go to a new market as we've done in Utah, Idaho or Texas resale market and not a lot of builders are doing what we do, where we build multifamily investment properties in an HOA community. And so it's really, it's really hard to find those comps once they're stabilized and rented out. And so we're projecting the market value here at 875. But one way that you can back into that is you can understand and do some research on what the current cap rate is within that area. And we're getting anywhere between a five and a five and a half cap. These are for other properties that are already completed and leased up. That's what things are selling for down there right now. And so if you wanted to back into that and figure out what the value or the market value is going to be

Once these are finished, it's just a matter of taking the NOI, your net operating income, and dividing that by five or five and a half percent. And we feel like we're very conservative with that market value, it's good to understand that because it's not uncommon to have quite a bit of equity in these properties. Once they're finished, we've seen that over and over again and the other markets that were in Texas, Utah, and Idaho, and that's what we're projecting there with that 875.

And then just right below that there, that's going to give you your 10-year numbers and our other pro forma that we can send to you, it'll give you a better breakdown, but just know that that in 10 years, that your numbers are going to go up, your cap rates gonna increase your cash flow is going to get higher and your market value is going to go up. So these are just a couple of the comparables. When we're put putting together a pro forma, we're looking at similar properties within that location. We want to stick within that Northwest Metro surprise, specifically when we're pulling comps on where we're getting

data for rents. And these are some good resources that we found. So if you're wanting to go back through and do some of your due diligence, look into these places, there are several others that you can look into as well. I know that we listing agents we take, we take this very seriously and we look at this very closely. And not only us, but we also have our property management team that takes a look at it as well. This is just highlighting that there are several allies that are looking at what the rental comps are within that location. And these are just a couple of the comps that we pulled this project isn't all that far from our first Arizona project called the village on Greenway. We use some of the same comps over there on the village on Greenway that we do over here.

The reason being is that there's just a lot activity happening in the northwest side of the county right now tenants have some options, you know, they could rent single-family home for a relatively affordable cost, but they do have a bunch of utilities and other costs, another hassle on top of that, that they have to deal with. And those are tenants that don't want the hassle are definitely looking for rentals like this. They could also live in like an old rundown C class apartment building for much less but you're in an old rundown C class apartment building. Some of these options right here are what we would call a Class A units there, they're really nice. They've got lots and lots of fees on top of the base rents that are quoted, right so both of these projects, the one in surprise, the one in El Mirage, while there are different floor plans, they're trying to cater across all that demographic and people that have different levels of affordability of what they can get on rent. They want to save a little bit of money compared to what a class a unit would cost. But also they want something a little better than an old used house or a really old run-down apartment building. So there's a lot happening in the market with older units also new construction. These were the ones that we felt like were most applicable though that could be kind of analogous to what we're trying to achieve is in both of the projects.

Hayden Farms Project Timeline

This next slide here is talking about the timeline, we're trying to create a visual. But as you can see at the top there, this goes way back to 2019 into 2020. Throughout 2022. Basically, we're trying to let you know this is new construction, there's going to be a lot of different stages and different steps with new construction, and highlighting different start times and also different end times. So if you go about four sections down, it's going to be the project launch slash reservations. And that's where you see that we're currently at right now. So your 2020 2nd quarter, that's what that's highlighting there. Before then you can see that the land acquisition market analysis zoning that's already been started along with the final plat approval as well, that should be wrapping up towards the end of this year below final plat approval. You can see the horizontal development when we plan on starting to do that, and that's going to be towards the end of 2020. That's when we start to develop the land put in the utilities.

So by the time we start closing on these buildings and starting your construction, that's right below there, that's the vertical development, you can see the timeline for that vertical construction will not start until the second quarter of 2021. And that's going to run through the year 2022. And then below that, it talks about the construction finish time. And that's when you would refinance into your long term loan. And we can get into the financing details at a later time. And then also after that, it's the lease-up period that just gives you a visual on what to expect with the different time periods of new construction. And what we talk with our investors about and Windows start when they end. Why don't I take it from here for a minute Chase? So this is this webinar is intended to be kind of a pre-launch. So let me speak to the reservation process in general.

Contact Info for a Multifamily Consultation and Investment Info

Our contact information here shortly. If you're thinking hey, I, I like this project this maybe for me, we need you to send us an email. Because we're going to work with our advance notice list before we really start to push this out there to the general public. And so you'll just contact us and then we'll be back with you when we officially start taking those reservations. We'll get you in touch with the lender so that you can have that in play you know, the construction loans need a long term approval on file. And that's why we set you up with lane Aldrich at the first colony. State Arizona is different than how we do this normally, right now with us not having recorded the final plat or issued the public report. All that we can legally do is collect a refundable $5,000 deposit. And that's going to be that's refundable, no questions asked whatsoever until we record the plat and get the final public report in place and at that point, we'll contact you to do the actual

Purchase Agreement. And that's when your 10% deposit would be due. And then, as chase mentioned, will start closing construction loans in the second quarter of next year. That's when you'll come in with the rest of your down payment and closing costs and such. We'll also when you do your refundable deposit, we'll have you pick your interior upgrades, and we encourage you to get with us on that. Because every project has different options that might work better. Whenever we offer fourplex, it comes with a base level of finish. But in some projects that might make sense to have granite and stainless and others, you might really only need black appliances and then like ceiling lighting or ceiling can ceiling lights and then fans as well. So we're happy to have a conversation with you on that you can do whatever you want there. But you know this is better for you. It's better for us if you have a really good lease-up period and upgrades oftentimes have a lot to do with that. So we'd like to project a townhouse-style option, right? These cost more per square

Put give tenants a different option. And you just cannot find something like this in the Phoenix metro, especially in a really growing area like this one. Whenever we're new construction, we tend to be a little bit more hands-off and lower maintenance, all that's in place for you. You don't have to find qualified tenants or, or hire plumbers or go apply for permits. This is all done on your behalf, you're going to get a better cap rate and better cash flow than you can get on the open market. And I would stress the importance of this. You get to use that true 30 years fixed rate debt comes from a conventional mortgage. In the Coronavirus area where there's more money being pushed out there than can fit on most calculators. Fixed-Rate debt is very, very important, especially in times when do you have income interruptions you will want fixed-rate debt you don't want a bank to come audit you and on your leases and then require you to put up reserves. And also as I said, if the Federal Reserve is going to put trillions of dollars out there, right you want your debt denominated in

A currency that is likely to inflate, which will probably happen here with all that money that's getting pushed out. It's convenient, right? You're within a half-hour to 45 minutes of all the major attractions there in central Phoenix, you're close to a couple of major universities, and you've got everything that you need in that employment sector there on the west side. Here's our contact information. Most of you probably already have this, but you can go ahead and capture that and send us an email if you want to be in the running when we start taking pre reservations into the project and Hayden farms. I want to deal with a few and Jason shared, please chime in if you want to add to what we see here, but one of the questions that we got, and I think I know where the person is coming from that asked this, but so I'll attempt to address that cite it to what they said, What are the current trends in the design of multifamily developments.

Multifamily Development Trends

The underlying trend in multifamily development and building is we have to build for the cheapest square foot possible. But we also have to build something that somebody will actually want to live in. Right? That's the idea because we got to be able to build something that's a good livable experience for tenants. So they'll pay the rent that justifies the cost per square foot, that we had to build that there's an underlying assumption in the question, I think of, you know, what's happened in the age of COVID-19? Is that changing design practices in multifamily developments? Because we all know about this proximity, right of high density being around lots of other people, does it? Does it make this more infectious and more hazardous? The answer to that is it's too early to tell if we get some treatment breakthroughs and some vaccines and then maybe your people just don't care about this as much, or at all, or is this thing going to be with us forever? The thought does we start designing communities where

There's less shared space, right? We've, we think about these apartment buildings in like New York City or Chicago where everybody in that building touches the same doorknob. And they're all going down these interior hallways, right, you've got your own door, but you've got a lot of common area space that you've gone through. If that ends up being a challenge going forward that this is a great project for you because you touch one doorknob, it's yours, right? These are townhouse style, you park in your garage, or in your assigned spot and you walk straight to your unit. And any of the common areas that you walk across the same as others are outdoor. right there's no indoor shower commentary other than of course a clubhouse in which there are new processes in place by property managers across the whole country as to how to deal with all that. So that's kind of a pending question. But even if it gets a little bit more aggressive on the whole, hey, we need more space. We need less common areas. Hayden farms and the village on Greenway are both good projects for that because any shared

Space is all outdoor that you're walking through to get to your units. So I hope that helps. And the other there's more and more stacked right land is becoming more and more expensive all the time. And it FIG, we're finding it, the case that building up is getting to be more desirable than building out due to the cost of land but you know, you don't want to build up to the point where you sacrifice livability of the community, people need to have some space, there doesn't need to be some land. Next one, hey, share it, why don't you take this one, if you don't mind? But what options are there for beginning investors? So you need 25% down to do the fit model. And the main reason for that is that because that's what the construction lender is requiring as a downpayment. I know some people come to us and say, Hey, we want to do FHA. It really it doesn't work with our product, because you have to carry the construction loan. So really, you need to look we

We can help you with a few other options or suggest some other things on the side as starting to get into like a townhome or a condo, some something that's a single unit that we'd be open to help you or we can put you in touch with the right agent for that. But for FIG, and our model is 25% down, that's the entry. The barrier to enter, I guess, is the best way to put that one. Okay. And you know what, when we say the term beginning investor, that might imply that they don't have a lot of capital to get started with, in which case what Sherida said, there's some workarounds occasionally. But if you're a beginning investor, and you do have the capital, you have the same options as a very seasoned investor here, right? Because we like to joke that this process is the big deal is the armchair value add, right if you can sign your draw request with the builder if you have DocuSign. And you can talk to us. All of this does get done and you're going to qualify for the construction loan based on your credit, and your downpayment funds and your ability to do this deal is just as strong as somebody

Who owns six or seven, fourplexes. So you could totally get into a fourplex if you've got those downpayment funds, but you're a beginner, and we don't like this, we do have a couple of duplexes in the Hayden farms project, and that that reduces your entry point, as well. So those are a couple of options there. So in the group chat, we have a few questions. The first one from Sandy and she says How was the or sorry if it Sandy's not female, but Sandy says How did the numbers look for a duplex? So if you want to touch on that, um, you know, I don't have the pro forma for a duplex in front of me, but some people expect that the price of a duplex would be exactly half of that of a fourplex that's not necessarily the case. There are some fixed costs that come with it that the bid so it's probably a little more than half to get a duplex, but your cap rates, your cash flow, all that stuff is you can cut it just about in half. And that's what it's going to look like. So if I pay for a duplex, I'll say it's 430. I'm just kind of saying

up with that number cap rates going to be about the same cash flow a little about half of what a fourplex would be. I think you're gonna off the top of my head Chase, you correct me if I'm wrong. By the time you take into account your downpayment, your closing costs a year's worth of interest on the construction loan, maybe what 115 out of pocket? Do you think that's right, Chase? Yeah, I think you're pretty close or anywhere between 115 to 125. Yeah, I'd never said that. 125 just what those buying costs. Yeah. Yeah, that that that'll give you a little bit of a budget for some stabilization costs too. Right. You know, we can have 170 tenants lined up the first day that this thing is done. We got to absorb the units onto the market. So you'll have some fixed costs, like your mortgage, taxes, things like that, before you achieve full occupancy. So we like to put a little bit of padding in there for that too. Randy wants us to speak to the money the capital outlay timeline construction loan step after the 5k deposit and project

Long Term financing. We hit on that a little but let's just review really quick if you're going to reserve something in Hayden farms, let's use a fourplex, and let's assume a total cash outlay of you guys okay with 220 Chase and Sarah 220 for fourplex something like that. Okay.

5,000 is due when you reserve it. And then when we record the final plat which one was that on the timeline Chase, was that going to be this ball? Or was that clear in this winter? December? Yes. Okay, can we make this because there may be some of our investors that have invested in other states with us? This $5,000 deposit is specific to Arizona that's all that they will allow having for earnest money. So if you've invested us with us in the past, and you're like this number looks weird because it used to be 10 grand. It is 10 grand in other states. It's 5000 in Arizona as per Arizona law. I just wanted your yes thank you. Thank you. And so than in December when we record the plat and issue the public report

That is when you're gonna roll to a 10% deposit. And that 10% includes your five grand, so it's included in that. And then let's assume you're in the first phase that starts in like April or May, May next year. Yep. Okay. And when we say May we mean late May and that's how we talk around here. Okay, so late May is when you'll come in with the rest of your downpayment, which would be 15%. So now we're at 25%. Plus, all of your buying costs on the proforma, which we'll be sending out, buying costs will be somewhere in the mid 30 thousand range that'll include appraisal insurance, all your normal closing costs, title, and a year's worth of reserves for interest payments. So that's how that's about how we think it'll go. Just get with us because that'll change a little bit based on what specific units you pick and the timing of those.

How do you Finance these Fourplexes?

So Charlie's asking, Are these Freddie and Fannie loans I believe I'm capped at.

Charlie is correct. Yes. These are Freddie Fannie loans another way to say that is their conventional. You are cap you can, it doesn't matter if you're Warren Buffett, Fannie Mae will only let you have 10 conventional loans. And that's why a lot of people like for plexes because if I buy a single-family home with that great, that great money that 30-year fixed-rate debt that takes up one of my loan spots if I buy a fourplex that takes up one of my loan spots. So you can see you acquire four doors for a loan, in theory, somebody could get up to 40 doors with those Freddie Fannie loan spots. And so yeah, you are capped at 10. If your investor that already has those, then it's time to sell some of those and buy fourplexes be maybe get refinance some of those loans and do a portfolio loan to free up your Freddie or Fannie loans.

Or you could even do a big deal. Commercial you need to talk to us about that we'll get with the bank but a commercial loan would be slightly different terms doesn't dramatically change the financials. But what it does change is commercial loans. As we know, those are balloon payments every 10 years or so they're not like a Freddie Fannie loan where it's a true 30 year fixed rate mortgage, we're going to go to art, what is the risk of the construction company, completely not completing on time or delays to finish? Yes, the projects, the city requires those to be bonded, the last thing they want is a bunch of sold dirt doesn't have the horizontal improvements in place.

So those are bonded. And the construction company, the way these construction loans work is they don't get paid for work. That's not done, you get a draw request, right, probably seven or eight times during the 12 month construction period. And let's say that you got a draw request through DocuSign for 50 grand and it was for permit footings Foundation, underground plumbing, something like that. And you go ahead and sign that what happens is the construction lender will send their inspector to the job site to verify that that work was done. And then and only then

Do they release that portion of the budgets to the builder? So what art is probably getting at because we get this question a lot as well, what if in the middle of it, the builder loses their mind goes crazy? Or goes out of business or whatever? Right? Where does that leave me? The investor? Well, you still have a construction loan with a budget. I don't pretend that this would be a hassle-free process. But you can have another builder come in, assume that they would be the one to file the draw requests, and finish building out the property for you. And then finally, will you have a property manager for the full project? Yes, we will. We learned long ago, that if we just allow everybody to do whatever they want On Property Management, it's not a good thing. Everybody's advertising differently quoting different rents, right. So we have a manager that manages the entire project and that way, everybody's getting the same advertising. And you can reach out to one of us about how the how we work around that for the leasing and how that's done in a fair and orderly manner.

I hope everybody's businesses and personal lives I hope you're doing okay considering everything that's been going on and we're, we're really honored that you would spend some time with us today and consider FIG for your next real estate investment. We hope to be able to talk to you soon.