Devon Zuegel

The FHA, the Federal Housing Administration, and some other government agencies stepped in and said, this is not a tenable situation. We need to create some form of mortgage that is a much longer term so that people have a sense of stability in the place that they live, which I think is a really laudable goal.

The FHA, the Federal Housing Administration, and some other government agencies stepped in and said, this is not a tenable situation. We need to create some form of mortgage that is a much longer term so that people have a sense of stability in the place that they live, which I think is a really laudable goal.

But when they ended up doing that, they created agencies like Fannie Mae and Freddie Mac. And they also ended up creating rule sets for what was and wasn't worthy of the home loan of a mortgage. And they ended up frankly, locking in a lot of the ideals of what an ideal home was at that time period. And the people who just happened to be in charge ended up defining a lot of those factors.

But when they ended up doing that, they created agencies like Fannie Mae and Freddie Mac. And they also ended up creating rule sets for what was and wasn't worthy of the home loan of a mortgage. And they ended up frankly, locking in a lot of the ideals of what an ideal home was at that time period. And the people who just happened to be in charge ended up defining a lot of those factors.

And so there were things like, we don't want to give a loan to a home where the corridor is not at least this wide so that people can bring furniture in. They got into really granular detail. Which might be a reasonable rule, but the thing is that this is a very centralized decision-making power that just applies across the whole country all at once.

And so there were things like, we don't want to give a loan to a home where the corridor is not at least this wide so that people can bring furniture in. They got into really granular detail. Which might be a reasonable rule, but the thing is that this is a very centralized decision-making power that just applies across the whole country all at once.

And so it gets rid of a lot of the evolutionary pressures that you would normally get in a more free market system. Those rules have evolved over time, but it ended up creating some conventions and norms around 30-year mortgage. And also, frankly, if you're lending money as a bank for 30 whole years, you are even less risk-taking than any normal lender because 30 years is a long time.

And so it gets rid of a lot of the evolutionary pressures that you would normally get in a more free market system. Those rules have evolved over time, but it ended up creating some conventions and norms around 30-year mortgage. And also, frankly, if you're lending money as a bank for 30 whole years, you are even less risk-taking than any normal lender because 30 years is a long time.

Just think about where this country was 30 years ago versus today. It's a completely different place. The whole world order is totally different. And so making a bet on that timeline results in people being extremely cautious and locking in the status quo.

Just think about where this country was 30 years ago versus today. It's a completely different place. The whole world order is totally different. And so making a bet on that timeline results in people being extremely cautious and locking in the status quo.

Yeah. So let's split it up into a few different pieces because building a town requires a lot of different steps. So there's the land purchase. Then there's building the infrastructure, which is the roads, the sewage, the electrical, et cetera, the gas. Then there's what's called the vertical development, which is what it sounds like. It's like the buildings.

Yeah. So let's split it up into a few different pieces because building a town requires a lot of different steps. So there's the land purchase. Then there's building the infrastructure, which is the roads, the sewage, the electrical, et cetera, the gas. Then there's what's called the vertical development, which is what it sounds like. It's like the buildings.

In our case, we're going to be building a bunch of homes and there will be a hotel or two and there will be cafes and restaurants. There will be event spaces that I talked about. And each of those phases and pieces attracts a different type of capital. And I could say the options for how you could finance, and then I'll say how we're thinking about it.

In our case, we're going to be building a bunch of homes and there will be a hotel or two and there will be cafes and restaurants. There will be event spaces that I talked about. And each of those phases and pieces attracts a different type of capital. And I could say the options for how you could finance, and then I'll say how we're thinking about it.

So one important principle is that the earlier you are in this project, the riskier it is. Kind of intuitive. But when you're buying raw land that doesn't have any infrastructure on it,

So one important principle is that the earlier you are in this project, the riskier it is. Kind of intuitive. But when you're buying raw land that doesn't have any infrastructure on it,

or if it doesn't have approvals yet of what you're allowed to build that's considered the highest risk but also highest reward part of any project and some people do borrow money for that stage but it's much harder to get land loans because it's higher risk and Frankly, it's also, I think, in my opinion, not that desirable because you end up putting this ticking clock on your project.

or if it doesn't have approvals yet of what you're allowed to build that's considered the highest risk but also highest reward part of any project and some people do borrow money for that stage but it's much harder to get land loans because it's higher risk and Frankly, it's also, I think, in my opinion, not that desirable because you end up putting this ticking clock on your project.

And at that stage, there's a lot of things that need to happen before you have any cash flows coming in. All those things I just mentioned, like the infrastructure and all that, and then also the vertical construction. And so for us, we strongly prefer to do land purchase with all equity.

And at that stage, there's a lot of things that need to happen before you have any cash flows coming in. All those things I just mentioned, like the infrastructure and all that, and then also the vertical construction. And so for us, we strongly prefer to do land purchase with all equity.