You Can't Build it Here – It's Not a Tiny House Podcast

Barna: [00:01:09] I didn't know about easements and encroaching and...

Wyatt: [00:01:12] Surveying...

Barna: [00:01:12] Floodways.

Wyatt: [00:01:15] Guys like there was at one point the civil engineer who did the septic design came out and was like, if you can build it here, you can build it anywhere. Not my words, his words.

Barna: [00:01:26] I mean, and you know, and I'm pretty sure we heard that two other times from, I don't know, building inspector and everybody else, like, weird, weird shaped lot, next to a creek that floods, no septic or no sewer lines in that entire part of town. Like how do you build a town where 50 percent of the land doesn't have sewer service? Right. So anyway...

Wyatt: [00:01:50] How are you going to navigate that? No water to a lot. No power to the lot.

Barna: [00:01:54] Oh, no, I had power, and I used of water. Like that, used to have things,

Wyatt: [00:01:59] But it doesn't.

Barna: [00:02:00] But it was just cut because that's that's how people roll. It's abandoned. So now we're going to just cut all those wires and do our thing.

Wyatt: [00:02:06] And how do you get that back? We're going to navigate some of that and how it's been done, especially solar, different places where we live. But for now, what we're trying to figure out is how to sign on to our podcast. Maybe maybe we didn't accomplish that. So the point is.

Barna: [00:02:18] It's Not a tiny house.

Wyatt: [00:02:19] That it's a it's a small, permanent structure. And when you enter into that realm of locking something onto a piece of land, you have to understand the rules that are already in place. You have to understand how you might be able to change those rules. You have to figure out how to read, navigate your local government and their code. And here we are again, podcast number two. Let's start it off with Plan A for what we were going to do there. I gotten back to the area. I didn't really know what the hell I was going to do. I had an RV and I bought a old RV trailer from Barna and I was going to build a tiny house, traditional right on wheels hold you lock, stock and barrel. And I had he had a shipping container there and I bought a shipping container to put there for a shop. I needed a...

Barna:[00:03:05] Well, it kind of started before that. So we already knew each other.

Wyatt: [00:03:08] Yeah. Yeah,

Barna: [00:03:09] We already knew each other. I had an architectural salvage business I was running out of my house a 2000 sqft workshop there and you had your store. But when you were coming back into town.

Wyatt: [00:03:19] Right.

Barna: [00:03:19] I already knew you were, you know, working on house was doing remodels and I had plenty of projects. Right.

Wyatt: [00:03:24] Right.

Barna: [00:03:24] Stop by, of course, on the busiest day of the year is when you when you get back into town.

Wyatt: [00:03:29] Yeah. That's how I roll.

Barna: [00:03:30] It was great. So abandoned Erin at the store and go with you, show you around like, hey, here's all this stuff that needs to happen. Yeah. And you're like cool empty lot. Can I park stuff there. Like, me. sure.

Wyatt: [00:03:42] Needed a place to put a trailer full of tools and my stuff. Right. That's like day one back in town. So we're going like plan A is I'm like I need a house but it needs to be mobile. So, you know, you're kind of strapped in to a very specific realm of housing at that point. And I wanted to have a shipping container. I've always wanted a shipping container, but...

Barna: [00:04:06] I already had one so I am ahead of the game.

Wyatt: [00:04:08] So he's like, drop one here, park your RV there. What could go wrong? No big deal. You'll have a place to put your tools inside the shipping container. And part of their benefits include, you know, lockability and they're safe and that shit. And I was going to live in the RV because that's kind of what I was after. No muss, no fuss. We put in a special use permit request.

Barna: [00:04:27] Well, no, so first you start building something.

Wyatt: [00:04:29] I did start building something but...

Barna: [00:04:31] And you got pretty far. I mean, you got you got a grant.

Wyatt: [00:04:35] I got a grant.

Barna: [00:04:35] So maybe you want, whatever...

Wyatt: [00:04:38] We'll go back into that. I mean, those are those are the specifics, and, yeah, let's talk about that then. So where we had started was we wanted to use an industrial lot with a special use permit which allows you to reside on that lot to kind of be a watchman for valuable property you have on an industrial lot. In our zoning, and in our in our current town. Right. So our brains go. We can have a dude on site that can kind of live there. Keep an eye on the tools that I've mentioned, Barna's stuff that's on the lot at that point. You know, he had a shipping container full of stuff. He had a lot of sandstone from a building that he had invested in from from a labor standpoint where they had taken an old structure that had blown down.

Barna: [00:05:21] And it's kind of my business now is architectural salvage. So.

Wyatt: [00:05:24] Right.

Barna: [00:05:25] That was a storage lot. Right. And on an industrial lot. Well, you can store stuff there. And if you get a special use permit anyway with our local code. Right, right, so we've got to emphasize that this is Florence, only. Your code could be significantly different, but with Florence code, you could have with a special use permit a watchman's quarters and like, cool, let's go that route.

Wyatt: [00:05:51] Yeah. And originally we had two options because I had that RV trailer that I had mentioned. So that was always like back pocket could live in that. That could be that could be easy because literally across the street there's somebody living in an RV. So you're like, I mean, easy path.

Barna: [00:06:07] It seems legit. Yeah. It's like everyone's doing this.

Wyatt: [00:06:07] So we got the shipping container dropped there and I'm standing there scratching my head and I'm like, I want to build a tiny house, if you will, without wheels on the shipping container. Fuck the trailer that I had. That was all well and good. But now that all of a sudden was not sexy enough and we had designed we drawn up a concept of this style housing and made a mini model and gone to a local business-to-business pitch competition. And they they heard the argument. They they saw the product in on a very, very micro scale and they awarded money. So they're like, hey, you know, these guys got a got a good idea. We're going to award them with cash, literally cash like twenty five hundred bucks, which you guys know. Twenty five hundred bucks is, you know, I mean, if I could find that in the couch cushions, I'd be doing backflips. Right. So would anybody. So that was that was really cool. Add validation to to what we were trying to work towards...

Barna: [00:07:04] Because it was a public vote. That's that's all you got you. I got one that was like the popular vote. So that also demonstrates I don't know if you're an investor or you want to build a business is like, oh, so there is a need. Right. So.

Wyatt: [00:07:17] Well, and there's there's a want.

Barna: [00:07:19] Right.

Wyatt: [00:07:19] Nobody had anything on the line there they like. It's not like anybody in the crowd or any of the people who voted were the ones putting the money in. They were strictly, what did you think was the coolest thing that you'd seen from a pitch standpoint? Right. At least that's the way I read it. Maybe maybe my ego likes to tell me what I want to hear. But it was it was like more votes in the audience voted for this project than they voted for other projects. Well, that's pretty cool, right? So we got all amped up. We're all charged up on my I'm going to we're going to go build this thing. And it's OK for now. It doesn't need to be on a foundation because it's it's technically a model home. Right. So we take this.

Barna: [00:07:56] It's also I mean, we call it a prototype. Right. So it's a prototype for this. Now, everybody that's when everybody loses their shit.

Wyatt: [00:08:03] Everybody comes undone. We even went before the the city planning and zoning committee kind of told him what was coming. And they, you know, had some pointed questions. I know they had their doubts,

Barna: [00:08:14] Was this one where I started yelling at everybody.

Wyatt: [00:08:16] Oh, yeah,

Barna: [00:08:17] OK. Yeah. Pointing fingers and yelling.

Wyatt:[00:08:18] Oh, yeah. This is another thing about picking your partners.

Barna:[00:08:20] Don't do that.

Wyatt: [00:08:21] No, no, no.

Wyatt: [00:08:23] Don't do the yelling part is what I am saying.

Barna: [00:08:24] A little bit, is fine. But picking your partners in business very, very carefully so that you know that when like when the mud starts to fucking add up, you know that everybody's in it for the same thing. And that's that's that's an important part that our history has kind of led us back to. Right. We've been involved in some stuff before, but we take the special use permit because now we have a prototype home we want to use. We also have a failsafe where it's like we got an RV. So no no harm, no foul, because the guy across the street is using one of these things as this night watchman's quarters, you know. You know, this is the technicality in the code book. And they come back and they're like, nah. And I'm like, this isn't cool. And that's when Barna.

Barna:[00:09:03] But keep in mind, they don't go nah we don't like this. It's it's no, the code says.

Wyatt: [00:09:10] Some bullshit.

Barna: [00:09:11] Yeah. Well, you know, the code says specific things and that's those specific things are used to justify their preconceived decision or the decision they've already made in their head that we don't like this. We do not want this here because that's all it is. Yeah, right. So if I decide I don't want something, then you go and find ways to justify it. I mean, we got down to like, you know, definition of efficiency dwelling unit and and does it have a closet?

Wyatt: [00:09:40] A closet.

Barna: [00:09:41] Does it have a closet?

Wyatt: [00:09:43] A fucking closet

Barna: [00:09:43] And then making statements like you're in the floodway. And so these things are yeah, there's there's a is a floodway. There are rules that you have to abide by that are actually federal at that point, not just local. And this information can be looked up on your local GIS service at every county or most counties have. But anyway, it's public information. Even if they don't have the digital one, you should be able to get paper copies. But yeah. So there are we didn't we didn't I at least didn't take this well. So I started yelling at the people at the meeting. But the overall result was that there are things we have to figure out.

Wyatt: [00:10:25] Yeah.

Barna: [00:10:25] Because we're idiots and we weren't...

Wyatt: [00:10:30] At this point still really wet behind the ears. Right. Like, like this was the entry point of us understanding that we had just enrolled ourselves in a curriculum that we had no idea we were fucking signing up for, like we had no clue we were that no big deal, no problem. Nothing.

Barna: [00:10:47] Well, so we made some mistakes, but the mistakes they made was that they thought, we don't like to fight and we don't like learning. Right. So it's you go in it, awesome, I get to learn new things and I've got a fight.

Wyatt: [00:11:02] Right. And that'll push us into what should have been the initial indicator on some of that stuff, which was Barna's purchase of a mobile home park. And I'm going to have to let him kind of handle most of that because I can only jump in at certain points because. So what we know now is that there's there's a fight and there are rules and regulations and things in place that, you know, you either have to have the right relationships, understand the code a little bit more specifically before maybe you get started.

Barna: [00:11:31] Where before I successfully managed to bypass all these hurdles. So I remodeled condos in Denver. So, before living here, lived in Denver, in Lakewood suburb and remodeled, I owned, seven condos up there and remodeled personally by myself, several of them. But that was like, OK, I hired a plumber for that, never had to do electrical, never had to change zoning, never had to deal with floodways. I was part of the HOA board there. So I kind of started getting a feeling for it. What are the rules are and how you have to take part to make things work. This was during the crash so there I got into it with a low investment cost anyway. But windows are boarded up and and it's we got we had drug dealers on the property as we later found out. But I was able to push the agenda there to where we got security cameras, where we clean up the property, where property values more than doubled, tripled on some of the condos. Just, and right now they're quadruple or five, five X what what the price was when I first bought today. But that was more design and just just work.

Wyatt: [00:12:50] And a lot of timing, too. Like you got to you got to keep in mind when the tide is high, it seems like there's a lot more regulation when the tide is low and the windows are broken and all kinds of shit, any improvement is an improvement. And now we're not finding that to be the same because we're coming off in an economic boom and we're finding more restriction. I have a feeling that won't be the case if we head down and enter another recession, which is cyclical. I mean, we'll talk about economics at some point, too. But but like, let's keep that in mind.

Barna: [00:13:20] So I basically never had to deal with these hurdles before. Right. So move down here. Made some friends. One of my friends has a mobile home park. And I was sitting around bored for, you know, several months. And he's like, hey, man, I've got this mobile home park. And I, I like real estate so I looked at I was looking at what's on the market every single day. Now, when I moved here, you could buy houses for under fifty thousand dollars and I found this mobile home park with five units. My buddy Mick kind of talked me into buying it because it was like, hey, it's a great idea and I did the numbers like, hey, even the way they were, it was a good investment. So the amount of money to spend on that, it was still turning a profit. And the basic math on that is you take a couple of zeros off and you're generating that every month of the purchase price ,you're good.

Wyatt: [00:14:13] So let's unpack that very, very quickly.

Barna: [00:14:16] So if I buy something for one hundred thousand dollars, it generates a thousand dollars a month. Yeah, right. Then that covers my mortgage. That covers my insurance. That covers my taxes.

Wyatt: [00:14:25] So standard...

Barna: [00:14:27] Basic math.

Wyatt: [00:14:27] Yeah. Baseline understanding of property investment from your standpoint is that if you, if you take a purchase for a hundred thousand dollars and you can then cash flow, you can rent that for a thousand dollars a month. That means in 100 months you own that thing outright and somebody else basically bought it for you, if you will. I mean, you had to manage it and you had upkeep and you can get it.

Barna: [00:14:47] Yeah, I mean, you can get into cap rates and all this other stuff too and than condos are going to have HOA fees you got to tack in there. But that's not the point. So you're basically buying a house. We're saying if you're buying a house today, if you're not budgeting that number that just popped two zeros off the end. If you're not budgeting that number, you're going to hurt yourself.

Wyatt: [00:15:10] Proven by guys. This guy, other guys I know, too. Like, that's so if anybody's curious, like, you know, what would I have to do? So that's a really good point for us to go. Like that means that our housing, in order to afford five hundred dollars a month for someone to rent it can be a fifty thousand dollar.

Barna: [00:15:26] Yeah. So we're doing the math backwards right now. So right now, the affordable housing limit with the current minimum wage of twelve dollars and some cents here is five hundred and seventy six dollars I think is what it comes out to.

Wyatt: [00:15:39] It was in there.

Barna: [00:15:40] Something like that. So that means you can build a house for fifty seven thousand six hundred dollars and that's something that you can rent out for five or six dollars. The problem, as we mentioned before, is that currently a house is three hundred thousand dollars.

Wyatt: [00:15:56] A house is three hundred thousand. Or if we take your mobile home back to the original conversation, a mobile home plus land plus septic plus this plus that, generally speaking, inferior products for a mobile home, traditionally speaking at least. And also that inherent is a less expensive cost. Right.

Barna: [00:16:14] But but even that's out of the market right now because lot rent is three seventy five or three twenty five is like the bare minimum and this park that I bought was generating 400 per unit. It was five units, one was vacant. So four times four, you know, sixteen hundred bucks a month that in theory everybody paying. That's not, you know, grandfathering in or doing a discount for the owner that I bought it from because he was still living there. But yeah, I was making money because I bought it for ninety three thousand dollars. So that worked. But I didn't want to keep it at that level. It was everything was rolled with with white paint. I actually like the 1950s, mid century modern style and most of these were 1950s. The lot was big enough to move every single trailer a little bit, straighten them out and I could bring two more in that would really increase my profit on it. So I go to the county well I go to the city. The city looks at me, goes, you're in the county. My cool. OK, so I go to the county building.

Wyatt:[00:17:19] Got to know where you are.

Barna:[00:17:20] Yeah. Got got to know where you're at. Like where did I buy this property to buy my address says Canyon City. But that doesn't mean you're Canyon City. Your address could say Florence, but, you're not technically under Rockvale or some other code.

Wyatt: [00:17:33] So that's why you got to know where you are. So you know what codebook you're following, right?

Barna: [00:17:37] So what website you got to look at? I mean, most of the stuff's online. You just got to find it.

Wyatt: [00:17:41] I just had to slide that in because it was it was important to where we are now too obviously. Right. So anyway, go ahead.

Barna: [00:17:47] Go to the county. I tell them what I've got. They bring out their blueprint or whatever they had. And they look at me and they go, You want to do what? No, it's zoned agricultural. Agro...agricultural. No, it's a mobile home park. I went to the county website. It said mobile home park. No, no, no. That's how you're billed for taxes, that you're use code. I'm like use code? Anyway. So this one on for about ten more minutes, me being surprised about everything they said. But basically they told me, no, you can't do anything. And even if you wanted to, we take your money, but we're still not going to let you do it. And this is a recurring theme of we're not going to let you do it. This happened to Canon City. This happened everywhere else. So kind of decided only thing you can do right now is restore in place, didn't move anything, fixed everything up the way it is. And I try to rent it out. Well, after investing forty thousand dollars into a mobile home that's from the nineteen fifties, not much profit left in there, unless you're renting it out for significantly more than what the going four hundred lot rent plus whatever for the home you're paying.

Wyatt: [00:19:00] So that's that number that we're always working towards, right? Is one percent of your purchase price is is your cash per month essentially is kind of what you're driving towards. Yeah.

Barna: [00:19:08] So I was trying to rent out for a hundred dollars a month and I put it on Facebook and everybody laughed at it. I was like, oh, what am I going to do now? Well then you get your other option. Technology is great. So Airbnb is out there. Let's Airbnb it. It's unique. I had a store that has mid century modern and reclaimed wood do architectural salvage and then moved it moved a lot of furniture in there, put it on Airbnb. And that was a learning experience, too. But it allowed me to rent it out immediately per night, later moved it to a monthly, one month minimum.

Wyatt: [00:19:41] At a higher rate...

Barna: [00:19:43] At a higher rate. So because is generating twelve hundred dollars a month or 1160 a month after all the fees and everything. And I was trying to get eight hundred.

Wyatt: [00:19:51] Per unit. So for those of you understanding the basic math just realized that that becomes a really good investment property based on those numbers. Because even at one unit, if you remember the purchase price that he mentioned earlier, I won't I won't go into the details on that. But so now you get four or five units. So so now that we're going like, hey, we got two people on different trajectories, if you will, still separately both hitting barriers of entry when it came to code, when it came to local government, when it came to how we're going to navigate housing and and affordability. And if we're going to do something as an investment property or if you're going to live in the property or some kind of shared thing, if you're after duplexes or whatever. Right. So we take that that concept of going, here's an issue. Here's how I can navigate inside of that issue and here's how I can monetize it. So now we've actually touched on something very popular and important to the big project that we're talking about, which is Airbnb. Right. So now you guys know that that that's at least on the purview. So if you're sitting at home, like, why don't these idiots figured out how to use Airbnb? Chillout. We're on it. So we just got to finish this stuff out. Let's give back to the main, to the main, like nuts and bolts of what we were talking about. I know that we're talking about need. Right. So so now you know that Barna got pissed off twice. At least I got pissed off at least once because.

Barna: [00:21:12] A day.

Wyatt: [00:21:12] Yeah, right.

Barna: [00:21:15] Daily. Right. Not overall.

Wyatt: [00:21:17] You understand like it's the attitude of of I want to do this stuff. I want to build cool shit and I want to do it now and then everybody else being like, no, you need to chill out, you need to wait and you need to spend three hundred fifty thousand dollars on a house, both of which were both like, that's high level bullshit. Right.

Barna: [00:21:31] Well, here's here's the fucked up part. Right. So as long as you're saying like, hey, I'm wanna build cool shit and make a ton of money. Right. And just and cater to the richest, everybody's your buddy. But as soon as you're like, I want to build cool shit and help people. Whoa,

Wyatt: [00:21:48] No. Like so...

Barna: [00:21:48] People, help? No, we don't want that.

Wyatt: [00:21:50] So it drives it all the way back to that math. If if we're going to build housing that is five hundred dollars a month, it's 50000 dollars. Right. If we're going to be five hundred seventy or fifty seven grand, 650 is sixty five thousand dollars, that's your number. And if you're going to do something for 65, traditionally it was subpar. That's no longer the case, right? We found it. We found a better way, but it started with the need. And that's the perfect thing for us to talk about. The next thing. Right. So back to the beginning, tiny house is what I wanted. Shipping container shows up. We're like, this is going to be great because I have a place for tools. I got a shop, I got a workplace. I don't have any power on that lot, if you guys remember that. So now we got to start figuring out solar. We got to figure out alternative. We got to figure out,

Barna: [00:22:32] We have no water either.

Wyatt: [00:22:34] We got to figure that out. Oh wait. Don't have a home. Right. So we need to have something that kind of can navigate a lot of these waters, although they just said no. Now let's talk about why they said no. Right. A lot of what their reasoning for why they said no was that residential is not allowed on an industrial lot in our city. You can do anything on an industrial lot where we are except live there, use by right and use by right means you don't have to ask. You don't have to say boo. Right. You can just do it. Well, you can't live there. So if you're going to live there, you have to give them the opportunity to tell you no. We did that. They did that. OK, so now we're back to how the hell are we going to navigate this? You have to understand the lot that you are on and the land use before you got there, what is allowed. You have to look that up. So you find a cool piece of land in fucking Toledo. Is that Oklahoma or Ohio? I don't know.

Barna: [00:23:29] Ohio, Toledo Ohio.

Wyatt: [00:23:30] But you find it. You're like, I'm going to send it. This is super cool. And then you like wait Wyatt and Barna said, I need to figure out if this is ag, commercial, industrial, residential, R1, R3 all this shit and you figure that out and then, you know, with your land use, which code you're following and what you're trying to do. That you have to start there, we did not start there. We started with we're going to do whatever we want to do. We're going to build a houses to us, like the kid who shat in the toilet, in the toilet, at the hardware store, not realizing that that wasn't a functional toilet. That was us. Right.

Barna: [00:24:07] So now you need some water. You need some water there.

Wyatt: [00:24:09] Because the water needs to go somewhere. Right. So that's a very crude, I think really kind of a funny analogy. But so start there, figure out like what this piece of property is and what you can do there. Then you start figuring out if you need to change anything, what's use by right. And you understand the code book that you were following for anything that you're going to build there. There are rules. Most of them are online, like you said,

Barna: [00:24:34] And that'll be in the show notes. We will put ours on there. But we'll also have a couple of links to like the major ones you can find your city.

Wyatt: [00:24:40] And I think, I think we're probably at time for this particular podcast are close enough. And I think it's a perfect way for us to just really pull you assholes along to be like, I want to listen to these guys more, because I'm saying we figured out another way to navigate how to go from an industrial lot to something that's going to allow residential and that is.

Barna: [00:24:59] Not residential, it allows, it allows somebody to live there.

Wyatt: [00:25:02] Yeah, that's a better way to say it. Yeah.

Barna: [00:25:03] Yeah. Don't lie.

Wyatt: [00:25:04] So so we didn't change the code yet.

Barna: [00:25:08] The code is not changed yet. But that's that's another podcast.

Wyatt: [00:25:11] That's so that's another rabbit hole for sure. But so you're listening and you're gone. OK, so now I at least know how to digest the fact that I need to figure out what this piece of property is so I don't do what these guys did, which is chase their tail for a few months, trying to trying to undo this perception that we were trying to break the rules when we were just didn't know what the hell they were.

Barna: [00:25:34] Yeah, that kind of takes me back to, like what I said earlier, we're idiots at this, but hopefully we're learning. Right? We didn't know. Now we know. Yeah. And we think everybody else should know too. Yeah.

Wyatt: [00:25:45] And so so with that, I think it's easiest for us to kind of to go like, hey, what you're going to need to understand first and foremost, it's code. You're going to understand a little bit about the money of how some of this stuff is going to have to work. If you're going to get involved with it, if you're going to buy it, build it, own it, whatever. Relationships are key. You need to get involved with your local government. You need to show up to meetings like we're going to a housing committee meeting this afternoon. We've been at every single one that once this kind of became something that's on our purview. And next is going to be in the future, I should say, that is going to be talked about topics of rezoning these particular pieces of property so that you get use by right. And that's something that's on our board that we need to talk about, too. But those are the those are the big takeaways. You probably have some other ones. Send it. I'm going to.

Barna: [00:26:34] No that sounds good.

Wyatt: [00:26:35] You're good? With that we're still working off on our sign off, but you know that better than I do.

Barna: [00:26:40] Follow us, like us, share and subscribe. Follow on YouTube, Instagram, Facebook or wherever you consume your podcasts.

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