Buy vs. Build: The Decision Behind Growing Wealth

Most people think real estate development is just construction. It’s not. The real game starts years before a shovel hits the ground and that’s where fortunes are made or lost.

In this episode, Mikey Taylor and Michael Michalov break down the complete development cycle from raw land to stabilized asset. They cover how to assess whether buying or building makes sense for your situation, the entitlement process that can take years and cost hundreds of thousands before you build anything, how to work with cities to avoid expensive dead ends, the capital stack breakdown on a real development deal, and why they believe Southern California’s difficulty is potentially an investment advantage.

They also get into a heated debate about when value is actually “realized” in development and share the real numbers on a North Hollywood project tracking from a targeted $9.5M cost to $17M projected stabilized value.

Whether you’re considering your first development deal or deciding between buying stabilized assets and building from scratch, this episode gives you the operator-level framework.

#RealEstateDevelopment #WealthBuilding #RealEstateInvesting

Timestamps:

0:00 — Buy vs. Build: Two completely different paths

01:47 — When buying beats building (and vice versa)

03:35 — The biggest mistake beginner developers make?

06:08 — How to gauge city appetite before you could risk capital

08:12 — Tying up property under contract during entitlements

10:45 — Architects, engineers, and the entitlement process

14:26 — Capital stack breakdown: the $10M example

17:06 — The “realized value” debate (heated)

21:11 — Why Southern California may be one of the hardest markets

25:14 — The single greatest risk in real estate development?

28:13 — Final framework: when to buy, when to build, when to wait

This content is for informational purposes only, is not offered as investment advice and should not be deemed as investment advice, and reflects the opinions and projections of COMMUNE as of the date of publication, which are subject to change without notice at any time subsequent to the date of issue. COMMUNE does not represent or warrant that the information presented in this message is accurate, current, or complete or that the estimates, opinions, projections or assumptions made in the message will prove to be accurate or realized.

Certain statements reflect projections or expectations of future financial or economic performance of the project. Such “forward-looking” statements are based on various assumptions, which assumptions may not prove to be correct. Accordingly, there can be no assurance that such assumptions and statements will accurately predict future events or the project’s actual performance. Past performance is not an indication of future results.

This content does not constitute an offer to invest and such offer will only be made by means of an offering document that should be carefully reviewed before determining whether to invest. As with any investment there is a risk of loss, including up to the amount of investment.

Neither this message nor its contents should be construed as legal, tax, investment, or other advice. Individuals are urged to consult with their own tax, legal, and investment advisers before making any investment decision.