Go to "Create Room-Structure-Outside Area" in the left list, and then left-click to draw the outside area. Once the drawing line is enclosed, the outside area is formed. Then you can replace the material of the grassland.
This is the most confusing command. Why not have some type of markings so that you know when the drawing line is enclosed? This waste ALOT of time. Ive been trying to make an outdoor area for over 30 minutes.