April 29, 2026
Buying and Selling Water Rights
Still think water isn’t part of commercial real estate?
It might be the most important asset you’re not thinking about.
In this episode, we break down the hidden world of buying and selling water rights—and why it’s becoming one of the most critical (and overlooked) factors in real estate development, especially in Colorado and the Mountain West.
If you’re a developer, investor, or commercial real estate professional, understanding water rights could completely change how you evaluate land, risk, and long-term value.
Inside this episode, we cover:
- What water rights are and how buying and selling water actually works
- Why land without water can be effectively worthless for development
- How water impacts real estate deals, zoning, and project feasibility
- The role of water brokers and why there are so few in the industry
- How municipalities and developers are solving water supply challenges
Whether you're developing land, underwriting deals, or investing in the future of real estate, water rights are no longer optional—they’re foundational.
Listen to the full episode to understand how water rights impact real estate—and why the smartest developers are solving water first.
If you're buying, selling, or developing commercial real estate:
👉 https://warehousehotline.com/
Work with a team that understands how infrastructure, strategy, and execution come together to close deals.
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Land without water is worthless.
That may sound dramatic, but
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it's true.
And the smart developers, at
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least in Colorado and the
Mountain West, solve their water
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problem on day one.
Well, let's pivot to real
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estate.
I have been playing in a
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different universe that I'd love
to tell you all about.
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So I tried to find something
that was real estate adjacent or
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that could feedback into real
estate but would be a value add
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depending upon where my path
took me.
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And I went for water rights.
I wanted to understand buying
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and selling water.
And I think back as to how I got
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here and it was a couple
different factors and sort of
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dominoes that sell.
I think back to that movie, The
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Big Short with Michael Blurry or
Bury, whatever his last name is.
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And at the very end, he leads
this little, little nugget of
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gold out there.
And he says today I'm focusing
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on buying and selling water.
And that comment stuck with me
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for years.
And I tried to figure that out.
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I tried to buy EF TS for utility
companies or whatever.
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I couldn't figure out how on
earth anybody was really buying
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water.
Well, Fast forward to today,
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call it six or seven years later
after that initial seed got
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planted, I had a couple
different projects over the
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years that had water nuance to
them, but it kind of one in one
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year and out the other and I
thought, OK, great, I got
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through it.
The lease got signed, the first
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rant check hit, we're good,
whatever, no big deal.
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Then when I had a non compete
time frame after prologist to
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sort of sit on my hands and
figure out what to do, I
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thought, OK, well, I don't have
any friends in the water
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business.
There's no way I'm going to get
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my non compete triggered and you
know, litigation or anything
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like that.
So I'm going to go play in the
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water world and see what
happened.
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A lot slower than I expected of
a start.
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I will be dramatically honest
with you if you think land
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development deals take long,
Water duels be even slower.
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But the interesting thing is
they're even earlier than land
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deals.
The smart developers, at least
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in Colorado and the Mountain
West, solve their water problem
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on day one.
Or at least try to prior to
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spending money on all the other
land stuff.
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Because I have had a realization
that, you know, land without
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water is worthless.
That may sound matic, but it's
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true.
And think about it from your own
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house, or your office or the
bathroom at the train station.
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Without water.
You turn on the spigot, nothing
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happens.
The toilets don't flush, your
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whatever manufacturing process
doesn't work, your lawn doesn't
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get sprinkler, the crops don't
grow even scarier, or the
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reservoirs don't fill because
there's no snow in the
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mountains.
You know, whatever it may be.
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So I spent a few months just
cold calling individuals trying
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to learn what the water industry
was and how to employ within it
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'cause I there isn't a clear
path.
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There's no water one O 1 do
this.
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I have now made that set of
materials that can share it with
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folks.
I've got a really nice water one
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O 1 sort of buying and selling
and historical legal context
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brochure.
I'll send it to you after the
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call 'cause I think you will put
I'm a rabbit hole like I have
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and find it fascinating.
All right, So I ended up finding
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Hydrosource, which is a water
resource brokerage firm.
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They were to me the right group
because they were small.
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It wasn't a huge corporate
stressful entity.
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There were two senior principals
that essentially founders of the
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company that are nearing, if not
already well within retirement
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years.
And I say that not in a
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disparaging way, but in a value
add way.
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To me, very selfishly, it was an
opportunity to learn.
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I'm one of those ever learner
folks that just if I'm not
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learning something new, I'm
bored.
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Maybe it's Abd, maybe it's like,
I don't know.
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So I joined Hydra Source and
it's been about two years, a
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little bit over with them.
And at first it started out as
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here's some very slow, simple
learning engagements.
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Here's a long list of reading
materials.
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Good luck.
Let's see what happens.
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It wasn't necessarily them
holding my hand and dragging me
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through deals.
Now pivot to today.
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They do that, they absolutely
hand off transaction
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opportunities and I'm
essentially the administrator on
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every new opportunity that comes
through our door, or so I'm
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told.
And or hopefully we'll get
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there.
We're navigating a path to
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ownership at some point here.
As you can imagine, 80 something
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year olds want to hang it all up
and move on and play with their
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grandkids as why not going to
have grandkids, but I'd love to
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hang it all up and spend all my
day with my kids.
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But so I really dug in and
picked up some learning
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engagements that didn't really
cover my mortgage, but gave me
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that knowledge base that I
needed.
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And I Fast forward to call it
the second year of being with
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Hydra Source.
I knew a little bit more.
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I felt more confident.
I was pitching new developers,
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new supplies, I was getting
deeper into the industry and I
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was having a lot of fun with it.
But it still wasn't clicking
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quite yet, wasn't immediately
cash flowing.
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00:05:02,400 --> 00:05:04,040
I'm still working on the second
piece of that.
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And so I kind of paused at the
same time of all this water
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business.
I stood up Flanagan Real Estate
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LLC and started consulting
entrepreneurially on my own and
103
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chasing land control for my own
right at syndication of
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hopefully vertical development.
So it's kind of running this
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dual world business.
Midsummer 2025, I just got
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stuffed by Adams County and
couldn't get through a zoning, a
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rezoning process.
Spent 18 months on it.
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Spent some money, got my earnest
money back, dropped control.
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Anyways, I was miserable from
all that capital side of the
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business wasn't there, at least
not for a brand new firm.
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And so at that point I paused on
picking up land control and
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trying to develop and focus more
on water.
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And then things shifted even
weirder for me.
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I ended up picking up 8 sale
listings, which, OK, great
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opportunity to learn, good
opportunity to earn.
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Some of these I'm never going to
sell.
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It's hyper complex.
It's really tricky to sell
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groundwater out from underneath
the development when there's no
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infrastructure that exists today
to pull it out from underneath
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the infrastructure or the
development.
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There's also, you know,
conflicting theories of what
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happens if there's no more
groundwater under my property,
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which doesn't.
We won't get into the science of
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all that.
But anyways, I picked up a bunch
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of sale listings and that in
itself was completely new for me
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because I've always been the
buyer builder.
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So I'm in fact, with the
exception of two occasions, not
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been allowed to even put things
up for sale.
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So I'm now in a scenario where I
am actively listing for sale
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water resource assets and I
don't know what I'm doing.
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Let's stop throw that out there.
That was starting mid last year.
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I admit a lot of progress on
most of those listings.
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I've figured out which ones are
valuable to focus on and which
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ones will get done and which
ones probably won't.
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I think that same scenario is
applicable to land deals or
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existing facilities, whatever as
well.
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Not everything can sell, at
least not at a value that is
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worthwhile for the seller
sometimes.
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So I've just been kind of
mucking around in this water
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world and meeting different
types of developers.
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There's your typical corporate
Prologis's or the Opus's or you
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know, the Evergreens, some very
common names in the Denver
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market.
But then there's other groups
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that focus on land and water.
And if there isn't a water
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infrastructure or non standard
land component to it, you'll
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never hear about it, like
Resource Land Holdings or
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Viddlers of the World, which are
a water arm specifically for
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single family housing
developers.
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So my network tripled again,
which is the same fun I had at
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Prologis when they marched me
all around the West Coast and
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introduced me to everybody.
But my network grew locally,
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Colorado focused, Douglas County
even closer, a lot of activity
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up in Northern Colorado.
And then I spent a good chunk of
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time consulting and trying to
find some water rights down in
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the Arkansas basin, which very
challenging.
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But my network in Colorado
dramatically grew, and it's a
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different type of individual,
different type of entity,
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different type of team, and it's
been very refreshing.
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At the same time, it's been
ungodly slow, as some of the
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utility folks like to
acknowledge.
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They move at a glacial pace.
Everybody loves their water puns
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as well, and they're everywhere.
I can't seem to avoid them.
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When I was with Bro, it was all
railroad puns all day, and now
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I'm like, OK, I've got railroad
stuff, I've got water stuff, Who
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knows where I'm going?
Why not?
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Boy, if I can, heck yeah.
I do like Monopoly, but great
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game.
Definitely caused some family
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disputes.
But oh man, yeah, what else can
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I tell you?
As far as water nuance, I would
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say Northern Colorado is very
fascinating as far as where
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their water comes from and the
complexity of it.
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Same thing with the Arkansas
basin.
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What I didn't realize about
living in Colorado and on the
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Front Range.
So I live in in Castle Rock,
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which is on the eastern side of
the slopes.
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I know you know all of this, but
for our listeners, they might
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not in Colorado, the majority of
the water falls on the western
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side of Colorado, but the
majority of the population and
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the political power is on the
eastern side.
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So going back into the 30s,
forties, fifties, 60s, you know,
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last century, what the eastern
side of the Rockies was doing
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was drilling holes to the
western side and then pulling
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all the water to this side.
You can imagine if you were a
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rancher or a farmer on the
western side and all of a sudden
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all of your resources were going
somewhere else and you weren't
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even getting the second use
downstream.
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Very concerning.
So no industry is without
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conflict or political challenge.
The other nuance to water is, is
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it's emotional.
And that was a real surprise for
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me.
I mean, real estate can be
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emotional too, but to a
different degree.
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I'll give you an example.
So I was for the Southeastern
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Colorado Water Conservancy
District.
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I was presenting to their board
my cost segregation analysis
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findings.
I was doing some nerd math
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engagement for them, and I was
standing up the podium, talk
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about my numbers, blah blah
blah.
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And one of the board members
stands up with tears in his eyes
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before he even started to speak
and asked me how I would feel if
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I had to think.
Sort of tangy piss water that
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comes out of the bottom of the
river every day.
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And I was sort of like piss
water, tangy water.
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What?
And he went on to explain to me
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that he represents a community
at the bottom of the Arkansas
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and they've been paying taxes to
get clean water since the 60s
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and they still don't have any
clean water.
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They drink the 2nd and 3rd and
4th use water as it finally gets
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to them down the Arkansas River.
And he was.
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Just in.
Tears and emotional and asked me
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how I was going to improve the
situation and I'm up there like
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I'm a numbers guy.
Are your reserves within your
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you know, reservoir system?
I am not qualified to answer
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that question.
That's to tiptoe around it.
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But that was my first real just
being blindsided by the emotion
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of water.
And yeah, it's it that was eye
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opening to me.
I've never experienced that type
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of emotion in any form of my
real estate fun over call it a
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15 year career.
So even with histories and you
219
00:11:36,120 --> 00:11:39,080
know, firms that were losing
assets to receivership or
220
00:11:39,080 --> 00:11:42,840
foreclosure or no emotion he's
handed back, done no problem,
221
00:11:42,840 --> 00:11:44,040
walk away.
Next project.
222
00:11:44,040 --> 00:11:46,560
Let's go the water business,
boy.
223
00:11:47,200 --> 00:11:48,680
Wow.
Yeah.
224
00:11:49,480 --> 00:11:51,280
So interesting.
There's some cobble.
225
00:11:52,160 --> 00:11:56,120
OK, So it's so funny.
We sat down and you said, I'm so
226
00:11:56,120 --> 00:11:58,760
glad it's snowing.
That's here in Colorado.
227
00:11:58,760 --> 00:12:03,480
I it is March and it's probably
snowed two or three times this
228
00:12:03,480 --> 00:12:06,920
entire winter.
So the question bears itself as
229
00:12:06,920 --> 00:12:09,760
a water professional, are we
screwed?
230
00:12:10,360 --> 00:12:13,440
No, no, we're not.
It's scary.
231
00:12:14,120 --> 00:12:17,840
But what I would tell you is
there are career professionals
232
00:12:17,840 --> 00:12:22,040
that have been working on this
and that we're aware of this and
233
00:12:22,040 --> 00:12:24,160
that are actively out in front
of it.
234
00:12:24,440 --> 00:12:27,640
Similar to, you know, how
commercial developers get out in
235
00:12:27,640 --> 00:12:29,960
front of their entitlements and
try to clean all that up as best
236
00:12:29,960 --> 00:12:33,200
they can before they, you know,
spend on real design or shovels
237
00:12:33,200 --> 00:12:35,480
in the ground.
The water industry, the
238
00:12:35,480 --> 00:12:38,160
municipal folks, they've been
very focused on this.
239
00:12:38,160 --> 00:12:41,760
So for example, Denver Water
Hyper focuses on the 1st
240
00:12:41,760 --> 00:12:44,920
snowfall of the year that date
and they basically do rain
241
00:12:44,920 --> 00:12:47,040
dances and pray for it to come
as soon as it could possibly
242
00:12:47,040 --> 00:12:49,320
come.
And when I learned about this, I
243
00:12:49,320 --> 00:12:53,560
didn't understand why until it
hit me because they, they just
244
00:12:53,560 --> 00:12:56,520
laid it out so clearly that the
first snowfall of the year
245
00:12:56,680 --> 00:12:59,720
triggers everybody to turn their
sprinkles, sprinklers off so
246
00:12:59,720 --> 00:13:02,680
they stop diminishing the
reservoir capacities and then it
247
00:13:02,680 --> 00:13:05,160
starts snowing and all that
melts and refills.
248
00:13:05,200 --> 00:13:08,120
And so this year Denver Water
was actively taking proactive
249
00:13:08,120 --> 00:13:11,200
measures to sort of maintain
their reservoir levels as best
250
00:13:11,200 --> 00:13:14,960
they could, even though we had a
late start to our first frost
251
00:13:15,760 --> 00:13:17,720
and we really haven't had much
build up since then.
252
00:13:18,040 --> 00:13:21,360
That said, there are
municipalities that have a
253
00:13:21,360 --> 00:13:24,360
longer horizon outlook than us
typical developers.
254
00:13:24,360 --> 00:13:27,240
And, and I'm, I continue to wear
multiple hats.
255
00:13:27,240 --> 00:13:30,400
I don't know how to not have 3
conceptual jobs at once, but
256
00:13:31,640 --> 00:13:34,920
they look at it not just in one
year, increments out into the
257
00:13:34,920 --> 00:13:38,880
future, not even just 5 or 10,
but municipalities like really
258
00:13:38,880 --> 00:13:40,640
look 50 years out into the
future.
259
00:13:40,960 --> 00:13:43,800
Denver water is similar decades
out into the future.
260
00:13:43,880 --> 00:13:46,480
Northern water up in Fort
Collins and the Northern
261
00:13:46,480 --> 00:13:49,800
Colorado, you know, some
municipalities, same thing,
262
00:13:49,800 --> 00:13:52,680
decades.
So they plan for these
263
00:13:52,680 --> 00:13:56,760
contingencies and they have
extra reserves and buy water
264
00:13:56,760 --> 00:13:59,680
supplies and do their best to
store as much as they possibly
265
00:13:59,680 --> 00:14:04,480
can, avoiding evaporative loss
so that we can ride out the dry
266
00:14:04,480 --> 00:14:06,920
seasons because we all know it's
getting warmer.
267
00:14:07,000 --> 00:14:10,720
Climate change is real.
Anybody that says otherwise, I
268
00:14:10,880 --> 00:14:13,720
they're not sane, so or their
full looming styles.
269
00:14:14,360 --> 00:14:17,720
So the professionals in the
water industry are doing their
270
00:14:17,720 --> 00:14:20,000
best to manage it.
Yeah, it's a little concerning.
271
00:14:20,000 --> 00:14:24,120
And yes, we're going to hear
Midsummer sprinkler, you know,
272
00:14:24,640 --> 00:14:29,120
rationing type stuff, but it'll
be on everybody to work through
273
00:14:29,120 --> 00:14:33,720
it and collaborate, not just the
municipalities, but their focus.
274
00:14:33,840 --> 00:14:35,840
There's some smart people in
there, really smart people.
275
00:14:36,600 --> 00:14:38,400
That's good.
That's good.
276
00:14:38,680 --> 00:14:41,840
Yeah.
It's totally out of my realm of
277
00:14:41,840 --> 00:14:45,920
understanding, but it's like you
said it, it impacts all of us
278
00:14:46,840 --> 00:14:50,080
more than we know or want to
acknowledge.
279
00:14:50,440 --> 00:14:52,680
Yeah.
And not just on sort of the
280
00:14:52,680 --> 00:14:55,760
resident side of things, but you
know, putting on the developer
281
00:14:55,760 --> 00:15:00,080
hat for half a second if I'm
building a industrial is not a
282
00:15:00,080 --> 00:15:02,760
great example because they're
not water heavy uses.
283
00:15:02,840 --> 00:15:06,440
Maybe a manufacturing process
within a building, but that
284
00:15:06,440 --> 00:15:10,760
would be the exception.
Really it's the single family
285
00:15:10,760 --> 00:15:14,000
housing market, the OR multi
family housing where there's
286
00:15:14,000 --> 00:15:16,760
bedrooms and showers and faucets
and sinks and all that kind of
287
00:15:16,760 --> 00:15:19,160
stuff.
From a development perspective,
288
00:15:19,240 --> 00:15:23,160
we have to figure it out.
And it's now one of the initial
289
00:15:23,160 --> 00:15:25,120
questions of pursuing a
development.
290
00:15:25,480 --> 00:15:28,600
Where should water come from?
And it's not that we as
291
00:15:28,600 --> 00:15:31,760
developers have gotten smarter
and we're now thinking earlier
292
00:15:31,760 --> 00:15:33,800
in the process.
It's because the municipalities
293
00:15:33,800 --> 00:15:36,600
say, oh, interesting, in the
middle of your pre pre app
294
00:15:36,600 --> 00:15:40,880
meeting, they'll say, OK, well
your TAC fees are this, but you
295
00:15:40,880 --> 00:15:43,400
also have to go out and get us
some raw water supplies and
296
00:15:43,400 --> 00:15:47,880
bring it to us to dedicate.
Municipalities are requiring raw
297
00:15:47,880 --> 00:15:50,000
water dedication.
So they're putting the problem
298
00:15:50,000 --> 00:15:53,240
on the developers to go out and
say, hey, you want us to expand?
299
00:15:53,600 --> 00:15:56,800
You want us to provide utility
services to your new 300 home,
300
00:15:56,840 --> 00:15:59,440
beautiful community with a
decorative fountain at the
301
00:15:59,440 --> 00:16:01,760
entrance.
That's ill advised in Colorado,
302
00:16:01,760 --> 00:16:03,440
but whatever you want all that.
Great.
303
00:16:04,040 --> 00:16:08,120
Go find the water.
That's a big ask, especially for
304
00:16:08,320 --> 00:16:11,080
developers that work everywhere
else in the country and have
305
00:16:11,080 --> 00:16:13,320
never been told that before.
I learned that the hard way,
306
00:16:13,320 --> 00:16:16,440
too, several years ago.
Good thing developers don't have
307
00:16:16,440 --> 00:16:18,240
any other headwinds right now,
so, right.
308
00:16:18,760 --> 00:16:21,160
None and none whatsoever.
Yeah.
309
00:16:21,360 --> 00:16:24,320
So you know with their free time
they can go if you can that out.
310
00:16:24,840 --> 00:16:26,600
Well, shame, shameless plug
here.
311
00:16:26,880 --> 00:16:30,560
There are water brokers that do
exist not just in Colorado, but
312
00:16:30,560 --> 00:16:33,520
in call it the Mountain West and
and further West.
313
00:16:34,320 --> 00:16:36,960
But let me ask you a question
and this is my favorite sort of
314
00:16:36,960 --> 00:16:39,360
game to play.
How many real estate brokers do
315
00:16:39,360 --> 00:16:41,640
you think there are licensed in
Colorado?
316
00:16:41,720 --> 00:16:44,200
Residential, commercial, farm
and ranch, whatever I.
317
00:16:44,280 --> 00:16:46,400
Think it's like 37,000 or
something.
318
00:16:46,840 --> 00:16:50,840
Great guess.
I've heard 2000 up to 100,000.
319
00:16:50,920 --> 00:16:52,760
My theory is 10.
I don't know.
320
00:16:53,160 --> 00:16:55,760
I'm sure we could figure this
out if we really wanted to, but
321
00:16:55,800 --> 00:16:57,200
that defeats the fun of the
game.
322
00:16:58,080 --> 00:17:00,200
Water brokers?
How many water brokers do you
323
00:17:00,200 --> 00:17:03,040
think there are?
I.
324
00:17:04,760 --> 00:17:06,200
Good guess.
I think there's 10.
325
00:17:06,960 --> 00:17:09,720
OK.
So when we were talking earlier
326
00:17:09,720 --> 00:17:12,440
about how do I, Sean Flanagan,
think I'm going to differentiate
327
00:17:12,440 --> 00:17:15,040
myself, my theory was to find
something that nobody else is
328
00:17:15,040 --> 00:17:18,760
doing that's horribly complex,
give it a try.
329
00:17:20,000 --> 00:17:22,960
So I've done that.
The other nuance here is of
330
00:17:22,960 --> 00:17:25,880
those 10 brokers that are
focused on water and understand
331
00:17:25,880 --> 00:17:27,800
the legalities because it's
different.
332
00:17:27,800 --> 00:17:29,920
You can't just buy it and sell
it and move it anywhere you
333
00:17:29,920 --> 00:17:33,080
want.
How old do you think those
334
00:17:33,080 --> 00:17:34,640
brokers are?
Average age?
335
00:17:34,640 --> 00:17:37,760
Sure.
Average 55.
336
00:17:38,720 --> 00:17:41,160
Oh you're way too low.
The average age of a water
337
00:17:41,160 --> 00:17:46,920
broker, in my opinion, is above
75 S These are individuals that
338
00:17:47,320 --> 00:17:48,960
have been doing this for
decades.
339
00:17:48,960 --> 00:17:51,800
They've mastered it.
There's nobody new knocking
340
00:17:51,800 --> 00:17:54,640
around the door saying teach me
these skills and they're looking
341
00:17:54,640 --> 00:17:55,960
to retire.
Several of them.
342
00:17:56,040 --> 00:17:58,760
One of them that supports
several municipalities has
343
00:17:58,760 --> 00:18:00,800
already formally retired.
And he says I'm just a board
344
00:18:00,800 --> 00:18:02,880
member now.
I just advise people I'm not
345
00:18:02,880 --> 00:18:04,960
going to hunt for water for you
anymore.
346
00:18:04,960 --> 00:18:07,920
I'm not going to no knock or no,
no call, you know, just cold
347
00:18:07,920 --> 00:18:09,720
knock doors.
He's like, I'm not doing any of
348
00:18:09,720 --> 00:18:13,720
that anymore.
So there's less and less of
349
00:18:13,720 --> 00:18:16,440
water brokers even physically in
existence in the future.
350
00:18:16,440 --> 00:18:19,240
That's my theory.
I now qualify myself as one of
351
00:18:19,240 --> 00:18:21,880
the 10.
I am significantly under the age
352
00:18:21,880 --> 00:18:26,120
of 75, so I'll be doing this for
a while, or at least while I do
353
00:18:26,120 --> 00:18:29,280
other stuff as well, 'cause I
love to wear 2 hats at the same
354
00:18:29,280 --> 00:18:33,120
time, maybe three.
Yeah, it's, it's fascinating.
355
00:18:33,120 --> 00:18:38,080
It's, it's mind blowing.
And Colorado being the
356
00:18:38,400 --> 00:18:42,800
headwaters to 6, plus major
waters, rivers, streams,
357
00:18:42,800 --> 00:18:47,280
whatever you want to call it.
We're the most complex of all
358
00:18:47,280 --> 00:18:49,600
the states from a legal
perspective, but we set a lot of
359
00:18:49,600 --> 00:18:53,000
the precedents as well.
So Colorado's a great place to
360
00:18:53,000 --> 00:18:55,880
be, at least if you're dabbling
in water or trying to build
361
00:18:55,880 --> 00:18:59,280
stuff or enjoy life.
I love Colorado.
362
00:18:59,280 --> 00:19:02,080
I'm so bullish on this state.
You know, everybody said well.
363
00:19:02,080 --> 00:19:04,520
Do you do?
Things now I'm like, I have
364
00:19:04,520 --> 00:19:07,720
enough work here in the states.
There's enough product.
365
00:19:08,200 --> 00:19:12,680
I get it, it, but in the vein of
what you're talking about when
366
00:19:12,680 --> 00:19:16,360
it comes to inventory of
brokers, something I love is
367
00:19:16,360 --> 00:19:19,320
just thinking about the path of
least resistance, minimizing
368
00:19:19,320 --> 00:19:24,920
friction and then, you know, how
can we maximize the outcome?
369
00:19:25,240 --> 00:19:28,960
All of that to say right there,
you know, I, I am constantly
370
00:19:28,960 --> 00:19:33,320
seeking ways in industrial real
estate where it's, it's the
371
00:19:33,320 --> 00:19:35,440
exact same equation you're
doing.
372
00:19:35,440 --> 00:19:37,240
But how old is the average
broker?
373
00:19:37,920 --> 00:19:39,840
The average commercial real
estate broker is 55.
374
00:19:39,840 --> 00:19:42,640
That's why I stole.
Ah, OK, you came up with that
375
00:19:42,640 --> 00:19:46,920
really fast so that makes sense.
I I got to be quick on my stats,
376
00:19:48,000 --> 00:19:50,960
but yeah, it's an interesting
game to play and it's
377
00:19:50,960 --> 00:19:53,600
advantageous.
And Someone Like You who has
378
00:19:53,600 --> 00:19:58,560
like the joie to like, people
don't like difficult things or
379
00:19:58,960 --> 00:20:00,320
things that don't have
certainty.
380
00:20:00,320 --> 00:20:01,560
Yeah.
But but.
381
00:20:02,360 --> 00:20:05,360
But you're, you're fundamentally
a developer, right?
382
00:20:05,360 --> 00:20:10,200
Like it's risk and reward and
yeah, you could go get a salary
383
00:20:10,200 --> 00:20:15,640
job where you have, you know,
your W2 pay and and there is
384
00:20:15,640 --> 00:20:17,400
nothing wrong with that.
Not at all.
385
00:20:17,400 --> 00:20:19,800
I wish I.
Thought that that was OK but
386
00:20:19,800 --> 00:20:23,880
that life is not for me either.
I think I'm in the both camp.
387
00:20:23,920 --> 00:20:27,920
I need some stability in my life
and maybe that's AW 2 and a firm
388
00:20:27,920 --> 00:20:30,560
that's got a big checkbook to
support my development itches.
389
00:20:31,200 --> 00:20:33,680
But then also the water
brokerage side where you know,
390
00:20:33,680 --> 00:20:36,480
it's, it's just like you said,
I've got the developer mindset,
391
00:20:36,480 --> 00:20:40,200
which I think is as simple as we
like to solve problems and
392
00:20:40,200 --> 00:20:42,240
developing is nothing but
problem solving.
393
00:20:42,560 --> 00:20:46,360
Sometimes they're easy, not very
often, but sometimes.
394
00:20:46,960 --> 00:20:50,640
And most of the time, if you can
get through it, there's a big
395
00:20:50,640 --> 00:20:53,120
payday at the end if you make
smart decisions.
396
00:20:53,120 --> 00:20:56,280
It's not guaranteed, of course,
but the harder the problems,
397
00:20:56,640 --> 00:20:58,480
typically the better the outcome
could be.
398
00:20:58,880 --> 00:21:01,960
Or at least that's my my fallacy
mindset.
399
00:21:02,440 --> 00:21:03,880
I don't know if it's accurate or
not.
400
00:21:03,880 --> 00:21:05,160
We'll see.
Time will stop.
401
00:21:06,080 --> 00:21:07,320
Hey, I'm I'm right there with
you.
00:00:00,040 --> 00:00:04,000
Land without water is worthless.
That may sound dramatic, but
2
00:00:04,000 --> 00:00:06,360
it's true.
And the smart developers, at
3
00:00:06,360 --> 00:00:08,880
least in Colorado and the
Mountain West, solve their water
4
00:00:08,880 --> 00:00:14,640
problem on day one.
Well, let's pivot to real
5
00:00:14,640 --> 00:00:17,560
estate.
I have been playing in a
6
00:00:17,560 --> 00:00:20,240
different universe that I'd love
to tell you all about.
7
00:00:20,360 --> 00:00:25,720
So I tried to find something
that was real estate adjacent or
8
00:00:25,720 --> 00:00:29,040
that could feedback into real
estate but would be a value add
9
00:00:29,480 --> 00:00:31,320
depending upon where my path
took me.
10
00:00:31,320 --> 00:00:35,680
And I went for water rights.
I wanted to understand buying
11
00:00:35,680 --> 00:00:39,600
and selling water.
And I think back as to how I got
12
00:00:39,600 --> 00:00:41,920
here and it was a couple
different factors and sort of
13
00:00:41,920 --> 00:00:44,680
dominoes that sell.
I think back to that movie, The
14
00:00:44,680 --> 00:00:47,920
Big Short with Michael Blurry or
Bury, whatever his last name is.
15
00:00:48,120 --> 00:00:51,240
And at the very end, he leads
this little, little nugget of
16
00:00:51,240 --> 00:00:53,200
gold out there.
And he says today I'm focusing
17
00:00:53,200 --> 00:00:56,400
on buying and selling water.
And that comment stuck with me
18
00:00:56,400 --> 00:00:59,080
for years.
And I tried to figure that out.
19
00:00:59,120 --> 00:01:02,800
I tried to buy EF TS for utility
companies or whatever.
20
00:01:02,800 --> 00:01:05,480
I couldn't figure out how on
earth anybody was really buying
21
00:01:05,480 --> 00:01:08,680
water.
Well, Fast forward to today,
22
00:01:08,680 --> 00:01:11,480
call it six or seven years later
after that initial seed got
23
00:01:11,480 --> 00:01:14,560
planted, I had a couple
different projects over the
24
00:01:14,560 --> 00:01:18,440
years that had water nuance to
them, but it kind of one in one
25
00:01:18,440 --> 00:01:20,520
year and out the other and I
thought, OK, great, I got
26
00:01:20,520 --> 00:01:22,800
through it.
The lease got signed, the first
27
00:01:22,800 --> 00:01:24,840
rant check hit, we're good,
whatever, no big deal.
28
00:01:25,440 --> 00:01:28,840
Then when I had a non compete
time frame after prologist to
29
00:01:28,840 --> 00:01:32,240
sort of sit on my hands and
figure out what to do, I
30
00:01:32,240 --> 00:01:34,640
thought, OK, well, I don't have
any friends in the water
31
00:01:34,640 --> 00:01:36,360
business.
There's no way I'm going to get
32
00:01:36,440 --> 00:01:39,680
my non compete triggered and you
know, litigation or anything
33
00:01:39,680 --> 00:01:40,840
like that.
So I'm going to go play in the
34
00:01:40,840 --> 00:01:42,080
water world and see what
happened.
35
00:01:43,240 --> 00:01:45,040
A lot slower than I expected of
a start.
36
00:01:45,040 --> 00:01:47,680
I will be dramatically honest
with you if you think land
37
00:01:47,680 --> 00:01:51,120
development deals take long,
Water duels be even slower.
38
00:01:51,240 --> 00:01:55,480
But the interesting thing is
they're even earlier than land
39
00:01:55,480 --> 00:01:57,400
deals.
The smart developers, at least
40
00:01:57,400 --> 00:02:00,760
in Colorado and the Mountain
West, solve their water problem
41
00:02:00,760 --> 00:02:03,840
on day one.
Or at least try to prior to
42
00:02:03,840 --> 00:02:05,520
spending money on all the other
land stuff.
43
00:02:05,520 --> 00:02:09,720
Because I have had a realization
that, you know, land without
44
00:02:09,720 --> 00:02:15,000
water is worthless.
That may sound matic, but it's
45
00:02:15,000 --> 00:02:17,240
true.
And think about it from your own
46
00:02:17,240 --> 00:02:20,880
house, or your office or the
bathroom at the train station.
47
00:02:20,880 --> 00:02:23,200
Without water.
You turn on the spigot, nothing
48
00:02:23,200 --> 00:02:25,120
happens.
The toilets don't flush, your
49
00:02:25,360 --> 00:02:28,280
whatever manufacturing process
doesn't work, your lawn doesn't
50
00:02:28,280 --> 00:02:31,560
get sprinkler, the crops don't
grow even scarier, or the
51
00:02:31,560 --> 00:02:33,280
reservoirs don't fill because
there's no snow in the
52
00:02:33,280 --> 00:02:34,760
mountains.
You know, whatever it may be.
53
00:02:35,200 --> 00:02:38,800
So I spent a few months just
cold calling individuals trying
54
00:02:38,800 --> 00:02:43,480
to learn what the water industry
was and how to employ within it
55
00:02:43,480 --> 00:02:45,160
'cause I there isn't a clear
path.
56
00:02:45,160 --> 00:02:47,440
There's no water one O 1 do
this.
57
00:02:47,760 --> 00:02:50,600
I have now made that set of
materials that can share it with
58
00:02:50,600 --> 00:02:52,880
folks.
I've got a really nice water one
59
00:02:52,880 --> 00:02:56,520
O 1 sort of buying and selling
and historical legal context
60
00:02:56,680 --> 00:02:58,360
brochure.
I'll send it to you after the
61
00:02:58,360 --> 00:03:00,800
call 'cause I think you will put
I'm a rabbit hole like I have
62
00:03:00,800 --> 00:03:04,960
and find it fascinating.
All right, So I ended up finding
63
00:03:04,960 --> 00:03:07,800
Hydrosource, which is a water
resource brokerage firm.
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00:03:08,520 --> 00:03:12,320
They were to me the right group
because they were small.
65
00:03:12,320 --> 00:03:14,760
It wasn't a huge corporate
stressful entity.
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00:03:15,120 --> 00:03:18,160
There were two senior principals
that essentially founders of the
67
00:03:18,160 --> 00:03:22,440
company that are nearing, if not
already well within retirement
68
00:03:22,440 --> 00:03:24,480
years.
And I say that not in a
69
00:03:24,480 --> 00:03:26,600
disparaging way, but in a value
add way.
70
00:03:26,600 --> 00:03:29,960
To me, very selfishly, it was an
opportunity to learn.
71
00:03:29,960 --> 00:03:32,840
I'm one of those ever learner
folks that just if I'm not
72
00:03:32,840 --> 00:03:34,080
learning something new, I'm
bored.
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00:03:34,240 --> 00:03:37,680
Maybe it's Abd, maybe it's like,
I don't know.
74
00:03:38,880 --> 00:03:43,640
So I joined Hydra Source and
it's been about two years, a
75
00:03:43,640 --> 00:03:47,640
little bit over with them.
And at first it started out as
76
00:03:47,920 --> 00:03:51,440
here's some very slow, simple
learning engagements.
77
00:03:51,480 --> 00:03:53,640
Here's a long list of reading
materials.
78
00:03:54,200 --> 00:03:55,480
Good luck.
Let's see what happens.
79
00:03:56,000 --> 00:03:58,480
It wasn't necessarily them
holding my hand and dragging me
80
00:03:58,480 --> 00:04:01,120
through deals.
Now pivot to today.
81
00:04:01,880 --> 00:04:05,240
They do that, they absolutely
hand off transaction
82
00:04:05,240 --> 00:04:08,040
opportunities and I'm
essentially the administrator on
83
00:04:08,120 --> 00:04:10,720
every new opportunity that comes
through our door, or so I'm
84
00:04:10,720 --> 00:04:13,280
told.
And or hopefully we'll get
85
00:04:13,280 --> 00:04:15,400
there.
We're navigating a path to
86
00:04:15,400 --> 00:04:19,160
ownership at some point here.
As you can imagine, 80 something
87
00:04:19,160 --> 00:04:22,079
year olds want to hang it all up
and move on and play with their
88
00:04:22,079 --> 00:04:26,680
grandkids as why not going to
have grandkids, but I'd love to
89
00:04:26,680 --> 00:04:28,960
hang it all up and spend all my
day with my kids.
90
00:04:28,960 --> 00:04:35,040
But so I really dug in and
picked up some learning
91
00:04:35,040 --> 00:04:39,720
engagements that didn't really
cover my mortgage, but gave me
92
00:04:39,720 --> 00:04:42,000
that knowledge base that I
needed.
93
00:04:42,080 --> 00:04:45,800
And I Fast forward to call it
the second year of being with
94
00:04:45,800 --> 00:04:48,720
Hydra Source.
I knew a little bit more.
95
00:04:48,720 --> 00:04:52,400
I felt more confident.
I was pitching new developers,
96
00:04:52,480 --> 00:04:55,840
new supplies, I was getting
deeper into the industry and I
97
00:04:55,840 --> 00:04:59,680
was having a lot of fun with it.
But it still wasn't clicking
98
00:04:59,680 --> 00:05:02,280
quite yet, wasn't immediately
cash flowing.
99
00:05:02,400 --> 00:05:04,040
I'm still working on the second
piece of that.
100
00:05:04,360 --> 00:05:08,160
And so I kind of paused at the
same time of all this water
101
00:05:08,160 --> 00:05:10,480
business.
I stood up Flanagan Real Estate
102
00:05:10,480 --> 00:05:14,520
LLC and started consulting
entrepreneurially on my own and
103
00:05:14,520 --> 00:05:17,960
chasing land control for my own
right at syndication of
104
00:05:18,040 --> 00:05:21,120
hopefully vertical development.
So it's kind of running this
105
00:05:21,120 --> 00:05:26,040
dual world business.
Midsummer 2025, I just got
106
00:05:26,040 --> 00:05:29,520
stuffed by Adams County and
couldn't get through a zoning, a
107
00:05:29,520 --> 00:05:32,480
rezoning process.
Spent 18 months on it.
108
00:05:32,920 --> 00:05:35,920
Spent some money, got my earnest
money back, dropped control.
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00:05:36,320 --> 00:05:39,560
Anyways, I was miserable from
all that capital side of the
110
00:05:39,560 --> 00:05:42,080
business wasn't there, at least
not for a brand new firm.
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00:05:42,800 --> 00:05:46,640
And so at that point I paused on
picking up land control and
112
00:05:46,640 --> 00:05:48,680
trying to develop and focus more
on water.
113
00:05:49,280 --> 00:05:52,480
And then things shifted even
weirder for me.
114
00:05:52,600 --> 00:05:58,200
I ended up picking up 8 sale
listings, which, OK, great
115
00:05:58,200 --> 00:06:00,360
opportunity to learn, good
opportunity to earn.
116
00:06:00,920 --> 00:06:02,560
Some of these I'm never going to
sell.
117
00:06:03,160 --> 00:06:06,000
It's hyper complex.
It's really tricky to sell
118
00:06:06,000 --> 00:06:08,960
groundwater out from underneath
the development when there's no
119
00:06:08,960 --> 00:06:11,600
infrastructure that exists today
to pull it out from underneath
120
00:06:11,600 --> 00:06:13,680
the infrastructure or the
development.
121
00:06:14,280 --> 00:06:17,200
There's also, you know,
conflicting theories of what
122
00:06:17,200 --> 00:06:19,440
happens if there's no more
groundwater under my property,
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00:06:19,440 --> 00:06:21,920
which doesn't.
We won't get into the science of
124
00:06:21,920 --> 00:06:24,080
all that.
But anyways, I picked up a bunch
125
00:06:24,080 --> 00:06:28,200
of sale listings and that in
itself was completely new for me
126
00:06:28,200 --> 00:06:30,000
because I've always been the
buyer builder.
127
00:06:30,320 --> 00:06:34,560
So I'm in fact, with the
exception of two occasions, not
128
00:06:34,560 --> 00:06:36,640
been allowed to even put things
up for sale.
129
00:06:36,920 --> 00:06:41,120
So I'm now in a scenario where I
am actively listing for sale
130
00:06:41,400 --> 00:06:44,880
water resource assets and I
don't know what I'm doing.
131
00:06:45,240 --> 00:06:48,640
Let's stop throw that out there.
That was starting mid last year.
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00:06:48,880 --> 00:06:52,440
I admit a lot of progress on
most of those listings.
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00:06:52,440 --> 00:06:55,200
I've figured out which ones are
valuable to focus on and which
134
00:06:55,200 --> 00:06:57,800
ones will get done and which
ones probably won't.
135
00:06:58,080 --> 00:07:01,120
I think that same scenario is
applicable to land deals or
136
00:07:01,120 --> 00:07:02,760
existing facilities, whatever as
well.
137
00:07:02,760 --> 00:07:06,000
Not everything can sell, at
least not at a value that is
138
00:07:06,000 --> 00:07:08,880
worthwhile for the seller
sometimes.
139
00:07:09,360 --> 00:07:12,480
So I've just been kind of
mucking around in this water
140
00:07:12,480 --> 00:07:17,000
world and meeting different
types of developers.
141
00:07:17,000 --> 00:07:21,560
There's your typical corporate
Prologis's or the Opus's or you
142
00:07:21,760 --> 00:07:24,440
know, the Evergreens, some very
common names in the Denver
143
00:07:24,440 --> 00:07:26,400
market.
But then there's other groups
144
00:07:26,400 --> 00:07:30,520
that focus on land and water.
And if there isn't a water
145
00:07:30,600 --> 00:07:36,240
infrastructure or non standard
land component to it, you'll
146
00:07:36,240 --> 00:07:39,440
never hear about it, like
Resource Land Holdings or
147
00:07:39,800 --> 00:07:43,080
Viddlers of the World, which are
a water arm specifically for
148
00:07:43,080 --> 00:07:44,560
single family housing
developers.
149
00:07:44,560 --> 00:07:49,280
So my network tripled again,
which is the same fun I had at
150
00:07:49,280 --> 00:07:52,080
Prologis when they marched me
all around the West Coast and
151
00:07:52,080 --> 00:07:56,480
introduced me to everybody.
But my network grew locally,
152
00:07:56,480 --> 00:08:01,600
Colorado focused, Douglas County
even closer, a lot of activity
153
00:08:01,600 --> 00:08:03,760
up in Northern Colorado.
And then I spent a good chunk of
154
00:08:03,760 --> 00:08:07,400
time consulting and trying to
find some water rights down in
155
00:08:07,400 --> 00:08:10,280
the Arkansas basin, which very
challenging.
156
00:08:10,280 --> 00:08:14,240
But my network in Colorado
dramatically grew, and it's a
157
00:08:14,240 --> 00:08:17,720
different type of individual,
different type of entity,
158
00:08:17,720 --> 00:08:21,000
different type of team, and it's
been very refreshing.
159
00:08:22,040 --> 00:08:26,320
At the same time, it's been
ungodly slow, as some of the
160
00:08:26,320 --> 00:08:29,240
utility folks like to
acknowledge.
161
00:08:29,240 --> 00:08:32,400
They move at a glacial pace.
Everybody loves their water puns
162
00:08:32,720 --> 00:08:35,919
as well, and they're everywhere.
I can't seem to avoid them.
163
00:08:35,919 --> 00:08:39,039
When I was with Bro, it was all
railroad puns all day, and now
164
00:08:39,039 --> 00:08:43,480
I'm like, OK, I've got railroad
stuff, I've got water stuff, Who
165
00:08:43,480 --> 00:08:44,360
knows where I'm going?
Why not?
166
00:08:44,360 --> 00:08:49,080
Boy, if I can, heck yeah.
I do like Monopoly, but great
167
00:08:49,080 --> 00:08:50,520
game.
Definitely caused some family
168
00:08:50,520 --> 00:08:56,520
disputes.
But oh man, yeah, what else can
169
00:08:56,520 --> 00:08:59,080
I tell you?
As far as water nuance, I would
170
00:08:59,080 --> 00:09:04,960
say Northern Colorado is very
fascinating as far as where
171
00:09:04,960 --> 00:09:08,400
their water comes from and the
complexity of it.
172
00:09:08,560 --> 00:09:10,480
Same thing with the Arkansas
basin.
173
00:09:10,800 --> 00:09:14,200
What I didn't realize about
living in Colorado and on the
174
00:09:14,200 --> 00:09:16,080
Front Range.
So I live in in Castle Rock,
175
00:09:16,080 --> 00:09:17,640
which is on the eastern side of
the slopes.
176
00:09:17,640 --> 00:09:20,160
I know you know all of this, but
for our listeners, they might
177
00:09:20,160 --> 00:09:24,480
not in Colorado, the majority of
the water falls on the western
178
00:09:24,480 --> 00:09:27,360
side of Colorado, but the
majority of the population and
179
00:09:27,360 --> 00:09:29,520
the political power is on the
eastern side.
180
00:09:29,920 --> 00:09:34,840
So going back into the 30s,
forties, fifties, 60s, you know,
181
00:09:34,840 --> 00:09:38,200
last century, what the eastern
side of the Rockies was doing
182
00:09:38,200 --> 00:09:40,920
was drilling holes to the
western side and then pulling
183
00:09:40,920 --> 00:09:43,720
all the water to this side.
You can imagine if you were a
184
00:09:43,720 --> 00:09:46,240
rancher or a farmer on the
western side and all of a sudden
185
00:09:46,520 --> 00:09:49,440
all of your resources were going
somewhere else and you weren't
186
00:09:49,440 --> 00:09:51,600
even getting the second use
downstream.
187
00:09:52,000 --> 00:09:55,440
Very concerning.
So no industry is without
188
00:09:55,440 --> 00:09:59,000
conflict or political challenge.
The other nuance to water is, is
189
00:09:59,000 --> 00:10:01,440
it's emotional.
And that was a real surprise for
190
00:10:01,440 --> 00:10:02,920
me.
I mean, real estate can be
191
00:10:02,920 --> 00:10:05,120
emotional too, but to a
different degree.
192
00:10:05,280 --> 00:10:09,000
I'll give you an example.
So I was for the Southeastern
193
00:10:09,440 --> 00:10:11,480
Colorado Water Conservancy
District.
194
00:10:11,560 --> 00:10:15,240
I was presenting to their board
my cost segregation analysis
195
00:10:15,240 --> 00:10:17,200
findings.
I was doing some nerd math
196
00:10:17,600 --> 00:10:21,440
engagement for them, and I was
standing up the podium, talk
197
00:10:21,440 --> 00:10:23,240
about my numbers, blah blah
blah.
198
00:10:23,240 --> 00:10:27,080
And one of the board members
stands up with tears in his eyes
199
00:10:27,080 --> 00:10:31,600
before he even started to speak
and asked me how I would feel if
200
00:10:31,600 --> 00:10:35,880
I had to think.
Sort of tangy piss water that
201
00:10:35,880 --> 00:10:37,600
comes out of the bottom of the
river every day.
202
00:10:37,600 --> 00:10:41,160
And I was sort of like piss
water, tangy water.
203
00:10:41,320 --> 00:10:43,800
What?
And he went on to explain to me
204
00:10:43,800 --> 00:10:46,560
that he represents a community
at the bottom of the Arkansas
205
00:10:46,640 --> 00:10:51,200
and they've been paying taxes to
get clean water since the 60s
206
00:10:51,280 --> 00:10:53,200
and they still don't have any
clean water.
207
00:10:53,200 --> 00:10:57,160
They drink the 2nd and 3rd and
4th use water as it finally gets
208
00:10:57,160 --> 00:10:59,320
to them down the Arkansas River.
And he was.
209
00:10:59,680 --> 00:11:02,120
Just in.
Tears and emotional and asked me
210
00:11:02,120 --> 00:11:04,880
how I was going to improve the
situation and I'm up there like
211
00:11:05,400 --> 00:11:09,400
I'm a numbers guy.
Are your reserves within your
212
00:11:09,640 --> 00:11:13,280
you know, reservoir system?
I am not qualified to answer
213
00:11:13,280 --> 00:11:16,320
that question.
That's to tiptoe around it.
214
00:11:16,320 --> 00:11:21,720
But that was my first real just
being blindsided by the emotion
215
00:11:21,720 --> 00:11:25,640
of water.
And yeah, it's it that was eye
216
00:11:25,640 --> 00:11:27,640
opening to me.
I've never experienced that type
217
00:11:27,640 --> 00:11:32,160
of emotion in any form of my
real estate fun over call it a
218
00:11:32,160 --> 00:11:36,120
15 year career.
So even with histories and you
219
00:11:36,120 --> 00:11:39,080
know, firms that were losing
assets to receivership or
220
00:11:39,080 --> 00:11:42,840
foreclosure or no emotion he's
handed back, done no problem,
221
00:11:42,840 --> 00:11:44,040
walk away.
Next project.
222
00:11:44,040 --> 00:11:46,560
Let's go the water business,
boy.
223
00:11:47,200 --> 00:11:48,680
Wow.
Yeah.
224
00:11:49,480 --> 00:11:51,280
So interesting.
There's some cobble.
225
00:11:52,160 --> 00:11:56,120
OK, So it's so funny.
We sat down and you said, I'm so
226
00:11:56,120 --> 00:11:58,760
glad it's snowing.
That's here in Colorado.
227
00:11:58,760 --> 00:12:03,480
I it is March and it's probably
snowed two or three times this
228
00:12:03,480 --> 00:12:06,920
entire winter.
So the question bears itself as
229
00:12:06,920 --> 00:12:09,760
a water professional, are we
screwed?
230
00:12:10,360 --> 00:12:13,440
No, no, we're not.
It's scary.
231
00:12:14,120 --> 00:12:17,840
But what I would tell you is
there are career professionals
232
00:12:17,840 --> 00:12:22,040
that have been working on this
and that we're aware of this and
233
00:12:22,040 --> 00:12:24,160
that are actively out in front
of it.
234
00:12:24,440 --> 00:12:27,640
Similar to, you know, how
commercial developers get out in
235
00:12:27,640 --> 00:12:29,960
front of their entitlements and
try to clean all that up as best
236
00:12:29,960 --> 00:12:33,200
they can before they, you know,
spend on real design or shovels
237
00:12:33,200 --> 00:12:35,480
in the ground.
The water industry, the
238
00:12:35,480 --> 00:12:38,160
municipal folks, they've been
very focused on this.
239
00:12:38,160 --> 00:12:41,760
So for example, Denver Water
Hyper focuses on the 1st
240
00:12:41,760 --> 00:12:44,920
snowfall of the year that date
and they basically do rain
241
00:12:44,920 --> 00:12:47,040
dances and pray for it to come
as soon as it could possibly
242
00:12:47,040 --> 00:12:49,320
come.
And when I learned about this, I
243
00:12:49,320 --> 00:12:53,560
didn't understand why until it
hit me because they, they just
244
00:12:53,560 --> 00:12:56,520
laid it out so clearly that the
first snowfall of the year
245
00:12:56,680 --> 00:12:59,720
triggers everybody to turn their
sprinkles, sprinklers off so
246
00:12:59,720 --> 00:13:02,680
they stop diminishing the
reservoir capacities and then it
247
00:13:02,680 --> 00:13:05,160
starts snowing and all that
melts and refills.
248
00:13:05,200 --> 00:13:08,120
And so this year Denver Water
was actively taking proactive
249
00:13:08,120 --> 00:13:11,200
measures to sort of maintain
their reservoir levels as best
250
00:13:11,200 --> 00:13:14,960
they could, even though we had a
late start to our first frost
251
00:13:15,760 --> 00:13:17,720
and we really haven't had much
build up since then.
252
00:13:18,040 --> 00:13:21,360
That said, there are
municipalities that have a
253
00:13:21,360 --> 00:13:24,360
longer horizon outlook than us
typical developers.
254
00:13:24,360 --> 00:13:27,240
And, and I'm, I continue to wear
multiple hats.
255
00:13:27,240 --> 00:13:30,400
I don't know how to not have 3
conceptual jobs at once, but
256
00:13:31,640 --> 00:13:34,920
they look at it not just in one
year, increments out into the
257
00:13:34,920 --> 00:13:38,880
future, not even just 5 or 10,
but municipalities like really
258
00:13:38,880 --> 00:13:40,640
look 50 years out into the
future.
259
00:13:40,960 --> 00:13:43,800
Denver water is similar decades
out into the future.
260
00:13:43,880 --> 00:13:46,480
Northern water up in Fort
Collins and the Northern
261
00:13:46,480 --> 00:13:49,800
Colorado, you know, some
municipalities, same thing,
262
00:13:49,800 --> 00:13:52,680
decades.
So they plan for these
263
00:13:52,680 --> 00:13:56,760
contingencies and they have
extra reserves and buy water
264
00:13:56,760 --> 00:13:59,680
supplies and do their best to
store as much as they possibly
265
00:13:59,680 --> 00:14:04,480
can, avoiding evaporative loss
so that we can ride out the dry
266
00:14:04,480 --> 00:14:06,920
seasons because we all know it's
getting warmer.
267
00:14:07,000 --> 00:14:10,720
Climate change is real.
Anybody that says otherwise, I
268
00:14:10,880 --> 00:14:13,720
they're not sane, so or their
full looming styles.
269
00:14:14,360 --> 00:14:17,720
So the professionals in the
water industry are doing their
270
00:14:17,720 --> 00:14:20,000
best to manage it.
Yeah, it's a little concerning.
271
00:14:20,000 --> 00:14:24,120
And yes, we're going to hear
Midsummer sprinkler, you know,
272
00:14:24,640 --> 00:14:29,120
rationing type stuff, but it'll
be on everybody to work through
273
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it and collaborate, not just the
municipalities, but their focus.
274
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There's some smart people in
there, really smart people.
275
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That's good.
That's good.
276
00:14:38,680 --> 00:14:41,840
Yeah.
It's totally out of my realm of
277
00:14:41,840 --> 00:14:45,920
understanding, but it's like you
said it, it impacts all of us
278
00:14:46,840 --> 00:14:50,080
more than we know or want to
acknowledge.
279
00:14:50,440 --> 00:14:52,680
Yeah.
And not just on sort of the
280
00:14:52,680 --> 00:14:55,760
resident side of things, but you
know, putting on the developer
281
00:14:55,760 --> 00:15:00,080
hat for half a second if I'm
building a industrial is not a
282
00:15:00,080 --> 00:15:02,760
great example because they're
not water heavy uses.
283
00:15:02,840 --> 00:15:06,440
Maybe a manufacturing process
within a building, but that
284
00:15:06,440 --> 00:15:10,760
would be the exception.
Really it's the single family
285
00:15:10,760 --> 00:15:14,000
housing market, the OR multi
family housing where there's
286
00:15:14,000 --> 00:15:16,760
bedrooms and showers and faucets
and sinks and all that kind of
287
00:15:16,760 --> 00:15:19,160
stuff.
From a development perspective,
288
00:15:19,240 --> 00:15:23,160
we have to figure it out.
And it's now one of the initial
289
00:15:23,160 --> 00:15:25,120
questions of pursuing a
development.
290
00:15:25,480 --> 00:15:28,600
Where should water come from?
And it's not that we as
291
00:15:28,600 --> 00:15:31,760
developers have gotten smarter
and we're now thinking earlier
292
00:15:31,760 --> 00:15:33,800
in the process.
It's because the municipalities
293
00:15:33,800 --> 00:15:36,600
say, oh, interesting, in the
middle of your pre pre app
294
00:15:36,600 --> 00:15:40,880
meeting, they'll say, OK, well
your TAC fees are this, but you
295
00:15:40,880 --> 00:15:43,400
also have to go out and get us
some raw water supplies and
296
00:15:43,400 --> 00:15:47,880
bring it to us to dedicate.
Municipalities are requiring raw
297
00:15:47,880 --> 00:15:50,000
water dedication.
So they're putting the problem
298
00:15:50,000 --> 00:15:53,240
on the developers to go out and
say, hey, you want us to expand?
299
00:15:53,600 --> 00:15:56,800
You want us to provide utility
services to your new 300 home,
300
00:15:56,840 --> 00:15:59,440
beautiful community with a
decorative fountain at the
301
00:15:59,440 --> 00:16:01,760
entrance.
That's ill advised in Colorado,
302
00:16:01,760 --> 00:16:03,440
but whatever you want all that.
Great.
303
00:16:04,040 --> 00:16:08,120
Go find the water.
That's a big ask, especially for
304
00:16:08,320 --> 00:16:11,080
developers that work everywhere
else in the country and have
305
00:16:11,080 --> 00:16:13,320
never been told that before.
I learned that the hard way,
306
00:16:13,320 --> 00:16:16,440
too, several years ago.
Good thing developers don't have
307
00:16:16,440 --> 00:16:18,240
any other headwinds right now,
so, right.
308
00:16:18,760 --> 00:16:21,160
None and none whatsoever.
Yeah.
309
00:16:21,360 --> 00:16:24,320
So you know with their free time
they can go if you can that out.
310
00:16:24,840 --> 00:16:26,600
Well, shame, shameless plug
here.
311
00:16:26,880 --> 00:16:30,560
There are water brokers that do
exist not just in Colorado, but
312
00:16:30,560 --> 00:16:33,520
in call it the Mountain West and
and further West.
313
00:16:34,320 --> 00:16:36,960
But let me ask you a question
and this is my favorite sort of
314
00:16:36,960 --> 00:16:39,360
game to play.
How many real estate brokers do
315
00:16:39,360 --> 00:16:41,640
you think there are licensed in
Colorado?
316
00:16:41,720 --> 00:16:44,200
Residential, commercial, farm
and ranch, whatever I.
317
00:16:44,280 --> 00:16:46,400
Think it's like 37,000 or
something.
318
00:16:46,840 --> 00:16:50,840
Great guess.
I've heard 2000 up to 100,000.
319
00:16:50,920 --> 00:16:52,760
My theory is 10.
I don't know.
320
00:16:53,160 --> 00:16:55,760
I'm sure we could figure this
out if we really wanted to, but
321
00:16:55,800 --> 00:16:57,200
that defeats the fun of the
game.
322
00:16:58,080 --> 00:17:00,200
Water brokers?
How many water brokers do you
323
00:17:00,200 --> 00:17:03,040
think there are?
I.
324
00:17:04,760 --> 00:17:06,200
Good guess.
I think there's 10.
325
00:17:06,960 --> 00:17:09,720
OK.
So when we were talking earlier
326
00:17:09,720 --> 00:17:12,440
about how do I, Sean Flanagan,
think I'm going to differentiate
327
00:17:12,440 --> 00:17:15,040
myself, my theory was to find
something that nobody else is
328
00:17:15,040 --> 00:17:18,760
doing that's horribly complex,
give it a try.
329
00:17:20,000 --> 00:17:22,960
So I've done that.
The other nuance here is of
330
00:17:22,960 --> 00:17:25,880
those 10 brokers that are
focused on water and understand
331
00:17:25,880 --> 00:17:27,800
the legalities because it's
different.
332
00:17:27,800 --> 00:17:29,920
You can't just buy it and sell
it and move it anywhere you
333
00:17:29,920 --> 00:17:33,080
want.
How old do you think those
334
00:17:33,080 --> 00:17:34,640
brokers are?
Average age?
335
00:17:34,640 --> 00:17:37,760
Sure.
Average 55.
336
00:17:38,720 --> 00:17:41,160
Oh you're way too low.
The average age of a water
337
00:17:41,160 --> 00:17:46,920
broker, in my opinion, is above
75 S These are individuals that
338
00:17:47,320 --> 00:17:48,960
have been doing this for
decades.
339
00:17:48,960 --> 00:17:51,800
They've mastered it.
There's nobody new knocking
340
00:17:51,800 --> 00:17:54,640
around the door saying teach me
these skills and they're looking
341
00:17:54,640 --> 00:17:55,960
to retire.
Several of them.
342
00:17:56,040 --> 00:17:58,760
One of them that supports
several municipalities has
343
00:17:58,760 --> 00:18:00,800
already formally retired.
And he says I'm just a board
344
00:18:00,800 --> 00:18:02,880
member now.
I just advise people I'm not
345
00:18:02,880 --> 00:18:04,960
going to hunt for water for you
anymore.
346
00:18:04,960 --> 00:18:07,920
I'm not going to no knock or no,
no call, you know, just cold
347
00:18:07,920 --> 00:18:09,720
knock doors.
He's like, I'm not doing any of
348
00:18:09,720 --> 00:18:13,720
that anymore.
So there's less and less of
349
00:18:13,720 --> 00:18:16,440
water brokers even physically in
existence in the future.
350
00:18:16,440 --> 00:18:19,240
That's my theory.
I now qualify myself as one of
351
00:18:19,240 --> 00:18:21,880
the 10.
I am significantly under the age
352
00:18:21,880 --> 00:18:26,120
of 75, so I'll be doing this for
a while, or at least while I do
353
00:18:26,120 --> 00:18:29,280
other stuff as well, 'cause I
love to wear 2 hats at the same
354
00:18:29,280 --> 00:18:33,120
time, maybe three.
Yeah, it's, it's fascinating.
355
00:18:33,120 --> 00:18:38,080
It's, it's mind blowing.
And Colorado being the
356
00:18:38,400 --> 00:18:42,800
headwaters to 6, plus major
waters, rivers, streams,
357
00:18:42,800 --> 00:18:47,280
whatever you want to call it.
We're the most complex of all
358
00:18:47,280 --> 00:18:49,600
the states from a legal
perspective, but we set a lot of
359
00:18:49,600 --> 00:18:53,000
the precedents as well.
So Colorado's a great place to
360
00:18:53,000 --> 00:18:55,880
be, at least if you're dabbling
in water or trying to build
361
00:18:55,880 --> 00:18:59,280
stuff or enjoy life.
I love Colorado.
362
00:18:59,280 --> 00:19:02,080
I'm so bullish on this state.
You know, everybody said well.
363
00:19:02,080 --> 00:19:04,520
Do you do?
Things now I'm like, I have
364
00:19:04,520 --> 00:19:07,720
enough work here in the states.
There's enough product.
365
00:19:08,200 --> 00:19:12,680
I get it, it, but in the vein of
what you're talking about when
366
00:19:12,680 --> 00:19:16,360
it comes to inventory of
brokers, something I love is
367
00:19:16,360 --> 00:19:19,320
just thinking about the path of
least resistance, minimizing
368
00:19:19,320 --> 00:19:24,920
friction and then, you know, how
can we maximize the outcome?
369
00:19:25,240 --> 00:19:28,960
All of that to say right there,
you know, I, I am constantly
370
00:19:28,960 --> 00:19:33,320
seeking ways in industrial real
estate where it's, it's the
371
00:19:33,320 --> 00:19:35,440
exact same equation you're
doing.
372
00:19:35,440 --> 00:19:37,240
But how old is the average
broker?
373
00:19:37,920 --> 00:19:39,840
The average commercial real
estate broker is 55.
374
00:19:39,840 --> 00:19:42,640
That's why I stole.
Ah, OK, you came up with that
375
00:19:42,640 --> 00:19:46,920
really fast so that makes sense.
I I got to be quick on my stats,
376
00:19:48,000 --> 00:19:50,960
but yeah, it's an interesting
game to play and it's
377
00:19:50,960 --> 00:19:53,600
advantageous.
And Someone Like You who has
378
00:19:53,600 --> 00:19:58,560
like the joie to like, people
don't like difficult things or
379
00:19:58,960 --> 00:20:00,320
things that don't have
certainty.
380
00:20:00,320 --> 00:20:01,560
Yeah.
But but.
381
00:20:02,360 --> 00:20:05,360
But you're, you're fundamentally
a developer, right?
382
00:20:05,360 --> 00:20:10,200
Like it's risk and reward and
yeah, you could go get a salary
383
00:20:10,200 --> 00:20:15,640
job where you have, you know,
your W2 pay and and there is
384
00:20:15,640 --> 00:20:17,400
nothing wrong with that.
Not at all.
385
00:20:17,400 --> 00:20:19,800
I wish I.
Thought that that was OK but
386
00:20:19,800 --> 00:20:23,880
that life is not for me either.
I think I'm in the both camp.
387
00:20:23,920 --> 00:20:27,920
I need some stability in my life
and maybe that's AW 2 and a firm
388
00:20:27,920 --> 00:20:30,560
that's got a big checkbook to
support my development itches.
389
00:20:31,200 --> 00:20:33,680
But then also the water
brokerage side where you know,
390
00:20:33,680 --> 00:20:36,480
it's, it's just like you said,
I've got the developer mindset,
391
00:20:36,480 --> 00:20:40,200
which I think is as simple as we
like to solve problems and
392
00:20:40,200 --> 00:20:42,240
developing is nothing but
problem solving.
393
00:20:42,560 --> 00:20:46,360
Sometimes they're easy, not very
often, but sometimes.
394
00:20:46,960 --> 00:20:50,640
And most of the time, if you can
get through it, there's a big
395
00:20:50,640 --> 00:20:53,120
payday at the end if you make
smart decisions.
396
00:20:53,120 --> 00:20:56,280
It's not guaranteed, of course,
but the harder the problems,
397
00:20:56,640 --> 00:20:58,480
typically the better the outcome
could be.
398
00:20:58,880 --> 00:21:01,960
Or at least that's my my fallacy
mindset.
399
00:21:02,440 --> 00:21:03,880
I don't know if it's accurate or
not.
400
00:21:03,880 --> 00:21:05,160
We'll see.
Time will stop.
401
00:21:06,080 --> 00:21:07,320
Hey, I'm I'm right there with
you.
