I'm looking for some insight from other Arch / Dev'rs out there.
I've been hacking at this Arch / Dev game for a few years. Unfortunately, its getting kind of old and I'm thinking a nice cushy seat drafting plans all day might be better.
I'll try to keep my history short- BS Arch Design- 16 yrs of work generally outside a traditional architecture- as corporate store designer (franchise), office space planning, 3D marketing for Arch & Dev, University staff for TI's, High end custom homes and some work with medium size firms - Ed, Cmcrl, Inst., and more; but mostly production job captain, DD or master planning roles. Wasn't able to get licensed b/c work not under license architect and non-NAAB degree.
In 2006, I decided to pursue MS RE Develop & Finance degree. Graduated in early 2008 and the collapse was just beginning and no one hiring. Like most, I found what ever work possible, but sometimes nothing for months.
At the bottom of both the stock and RE markets I decided to take all my saving and retirement funds and invest in both stocks and a few cheap (> 50k) fixers. 2 of the fixers are rented to provide some income and sold 1, then reinvested in the 4th fixer. Cashed out the stocks and bought a 5th and waiting for #4 to sell so I can begin fixing the 5th. I do all the trolling to find the site, negotiating the deal, 100% of the design, and doing 90% of the labor on these.
Why do I want to take the Blue pill? This is a lot more work than I ever expected; it takes 6-12 months to get my $ back out; Rents are not where I want them or are the type of renters needed or is maintaining the properties desirable; seems I'm always working on crap fixers with more issues than I can comment on; I'm self financing my projects as I can't get lenders to lend on anything I'm willing to invest in; and the list goes on. I just finished my taxes and I'm making less than an Intern III.
You might think I'm whining, but this is the reality of what I've been dealing with. Maybe these issues are just growing pains.
I know I have options- Go back to work with a contractor, developer or builder; Try to find some one to partner with; Go back and find a corporate gig; Go back to work with a firm and get licensed; Or suck it up and stay the course.
There's got to be a better or easier way than how I'm doing it. Is Segal's program worth utilizing? Any insight or better practical "how to function as a developer business" would be appreciated.
Djohn, about 40 years in it, in addition to having an architectural practice – the idea is to parlay, meaning take the equity from the houses and do something else, maybe commercial, something that would light your fire and bring easier income….residential is always a good place to start and is the highest square foot rent, but too labor intensive. Can’t believe that with 4 houses a bank won’t look at the combined equity for something else. Another option is to take a job somewhere, consolidate things into something you can manage on weekends and consider, maybe, finding some vacant commercial land and use your equity ito buy it, use your house income for payments then get the “Lease/Build-to-Suit” sign up and start fishing for a whale. Thinking you can make a good living doing this at your level is premature…need to grow it some more.
First and foremost, you need to AirBnB these properties. Have you not heard of that website?
I know ppl that rented their house, then discovered AirBnB, and then tripled their rental income...seriously check it out.
I have no idea where you live, so if it is in the middle of nowhere, and ppl are not coming to your city for some reason it might not be as lucrative.
I was just reading an article about how most cocaine only has 1-2% of, well cocaine in it. Think how popular and rich you could get if you could bump it to like 6%....
My point was that the extra 2/3 in rental income could make all the difference.
I also would not reference the AIA's Intern III salary, for it is misleading. Most employers are not paying their Intern III's that much.
Next, why are you doing work that a skilled laborer could pound out 5x faster than you. I've flipped two house so far, and you learn quickly to contract those jobs out.
It may be worth trying to put some feelers out there and see if there are some respectable companies looking to hire someone with you expertise and skill set, but in the end you will probably realize that ppl run businesses to make a profit for themselves, and that you have been hired to assist in doing so for your employer. If you think sitting behind a desk all day drafting is ideal try it out. I think you would be surprised.
I definitely need to get out of the the house flipping end of things and grow in to another area of the real estate business. Consolidating would be great and I'm looking at the 1031 as an option to funnel the funds to build new. It would just be a matter of timing everything to make it happen.
I'd be fine working a few years for a Dev or GC group to get more experience. I think working for an arch firm as a PM or CA would be great, but not sure if it would happen with out the license. Being a drafter again would just be a slacker play, but would be a lot less headaches and I would have to get a green medical card to make it all legit.
As for hiring the work out- it would be great, but for little dumpy fixers spending $30 to 50k for reno costs would be too expense and not pencil out. I'm fairly efficient at getting the work completed. My turn around time for the renovations have been 12- 16 weeks. With little over head or carrying costs, a little longer doesn't kill the deal. The rentals were good to go in that time frame and had renters in soon after.
The 2 house flips took too long because of- one with HUD holding period requirements and the other with a prior owner not disclosing a title issue with the adjacent lot, that was supposed to have been sold with the property and we had to take legal action to gain title of. We did our due diligence on both and were prepared for some of this, just not some of the timeline involved.
Most of our properties have been in smaller towns and bedroom communities, so there are fewer options for higher rents or AirBnB. Our current (5th) house sat for 6 years and I watched for a couple years waiting for it to move through to foreclosure. I researched what I could do with it before moving forward with purchasing it. This one I found will allow me to divide the lot, convert the existing home to a duplex and build a duplex on the new lot. The house is in a transitioning neighborhood with a lot of bohemians moving in and could be an AirBnB option. But we're just waiting for the funds to free up. A 203k loan would be helpful, but I noticed when reading through the req's and some info, loan cost are a bit higher, a few more hoops to jump through and I can't do any of the work unless I'm a licensed contractor.
The 2 rental properties we would like to redevelop in to a 3 or 4 multi fam building. Each house is on a 5,000 sf lot and both are next to each other. The city re-zoned the area before the bubble burst and zoned for commercial. The city zoning says they will allow a 3-4 unit multi-fam structure. Here's the odd thing- if we build commercial (which isn't the best use for this area of town) we could build to the lot line and up to 60' high. If we build a 4 plex, we would have to build 1 unit with 7,500 sf of land and each additional unit at 2,500 sf of land. Doesn't make much sense. I have a presentation together showing that this area is better suited for multi-fam and using much less land to do it on. So working on make that one happen.
Sorry for the continued rambling and maybe a little more info than necessary. I hope to find a few more folks on this forum who are like minded and I appreciate having some feedback, as I don't have too many folks share these topics with.
Thanks again.
Mar 23, 15 7:48 pm ·
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Arch / Dev Forum- The "Blue" pill is sounding better
I'm looking for some insight from other Arch / Dev'rs out there.
I've been hacking at this Arch / Dev game for a few years. Unfortunately, its getting kind of old and I'm thinking a nice cushy seat drafting plans all day might be better.
I'll try to keep my history short- BS Arch Design- 16 yrs of work generally outside a traditional architecture- as corporate store designer (franchise), office space planning, 3D marketing for Arch & Dev, University staff for TI's, High end custom homes and some work with medium size firms - Ed, Cmcrl, Inst., and more; but mostly production job captain, DD or master planning roles. Wasn't able to get licensed b/c work not under license architect and non-NAAB degree.
In 2006, I decided to pursue MS RE Develop & Finance degree. Graduated in early 2008 and the collapse was just beginning and no one hiring. Like most, I found what ever work possible, but sometimes nothing for months.
At the bottom of both the stock and RE markets I decided to take all my saving and retirement funds and invest in both stocks and a few cheap (> 50k) fixers. 2 of the fixers are rented to provide some income and sold 1, then reinvested in the 4th fixer. Cashed out the stocks and bought a 5th and waiting for #4 to sell so I can begin fixing the 5th. I do all the trolling to find the site, negotiating the deal, 100% of the design, and doing 90% of the labor on these.
Why do I want to take the Blue pill? This is a lot more work than I ever expected; it takes 6-12 months to get my $ back out; Rents are not where I want them or are the type of renters needed or is maintaining the properties desirable; seems I'm always working on crap fixers with more issues than I can comment on; I'm self financing my projects as I can't get lenders to lend on anything I'm willing to invest in; and the list goes on. I just finished my taxes and I'm making less than an Intern III.
You might think I'm whining, but this is the reality of what I've been dealing with. Maybe these issues are just growing pains.
I know I have options- Go back to work with a contractor, developer or builder; Try to find some one to partner with; Go back and find a corporate gig; Go back to work with a firm and get licensed; Or suck it up and stay the course.
There's got to be a better or easier way than how I'm doing it. Is Segal's program worth utilizing? Any insight or better practical "how to function as a developer business" would be appreciated.
Thank you.
Djohn, about 40 years in it, in addition to having an architectural practice – the idea is to parlay, meaning take the equity from the houses and do something else, maybe commercial, something that would light your fire and bring easier income….residential is always a good place to start and is the highest square foot rent, but too labor intensive. Can’t believe that with 4 houses a bank won’t look at the combined equity for something else. Another option is to take a job somewhere, consolidate things into something you can manage on weekends and consider, maybe, finding some vacant commercial land and use your equity ito buy it, use your house income for payments then get the “Lease/Build-to-Suit” sign up and start fishing for a whale. Thinking you can make a good living doing this at your level is premature…need to grow it some more.
First and foremost, you need to AirBnB these properties. Have you not heard of that website?
I know ppl that rented their house, then discovered AirBnB, and then tripled their rental income...seriously check it out.
I have no idea where you live, so if it is in the middle of nowhere, and ppl are not coming to your city for some reason it might not be as lucrative.
I was just reading an article about how most cocaine only has 1-2% of, well cocaine in it. Think how popular and rich you could get if you could bump it to like 6%....
.... think how many people you could kill.....
let us know how things shake out. I'd like to get into dev. when I'm done with the exams (which hopefully won't be much longer)
have you heard much about segal's course?
My point was that the extra 2/3 in rental income could make all the difference.
I also would not reference the AIA's Intern III salary, for it is misleading. Most employers are not paying their Intern III's that much.
Next, why are you doing work that a skilled laborer could pound out 5x faster than you. I've flipped two house so far, and you learn quickly to contract those jobs out.
It may be worth trying to put some feelers out there and see if there are some respectable companies looking to hire someone with you expertise and skill set, but in the end you will probably realize that ppl run businesses to make a profit for themselves, and that you have been hired to assist in doing so for your employer. If you think sitting behind a desk all day drafting is ideal try it out. I think you would be surprised.
Keep that hustle up, and you will see the light!
Thanks for the feedback everyone.
I definitely need to get out of the the house flipping end of things and grow in to another area of the real estate business. Consolidating would be great and I'm looking at the 1031 as an option to funnel the funds to build new. It would just be a matter of timing everything to make it happen.
I'd be fine working a few years for a Dev or GC group to get more experience. I think working for an arch firm as a PM or CA would be great, but not sure if it would happen with out the license. Being a drafter again would just be a slacker play, but would be a lot less headaches and I would have to get a green medical card to make it all legit.
As for hiring the work out- it would be great, but for little dumpy fixers spending $30 to 50k for reno costs would be too expense and not pencil out. I'm fairly efficient at getting the work completed. My turn around time for the renovations have been 12- 16 weeks. With little over head or carrying costs, a little longer doesn't kill the deal. The rentals were good to go in that time frame and had renters in soon after.
The 2 house flips took too long because of- one with HUD holding period requirements and the other with a prior owner not disclosing a title issue with the adjacent lot, that was supposed to have been sold with the property and we had to take legal action to gain title of. We did our due diligence on both and were prepared for some of this, just not some of the timeline involved.
Most of our properties have been in smaller towns and bedroom communities, so there are fewer options for higher rents or AirBnB. Our current (5th) house sat for 6 years and I watched for a couple years waiting for it to move through to foreclosure. I researched what I could do with it before moving forward with purchasing it. This one I found will allow me to divide the lot, convert the existing home to a duplex and build a duplex on the new lot. The house is in a transitioning neighborhood with a lot of bohemians moving in and could be an AirBnB option. But we're just waiting for the funds to free up. A 203k loan would be helpful, but I noticed when reading through the req's and some info, loan cost are a bit higher, a few more hoops to jump through and I can't do any of the work unless I'm a licensed contractor.
The 2 rental properties we would like to redevelop in to a 3 or 4 multi fam building. Each house is on a 5,000 sf lot and both are next to each other. The city re-zoned the area before the bubble burst and zoned for commercial. The city zoning says they will allow a 3-4 unit multi-fam structure. Here's the odd thing- if we build commercial (which isn't the best use for this area of town) we could build to the lot line and up to 60' high. If we build a 4 plex, we would have to build 1 unit with 7,500 sf of land and each additional unit at 2,500 sf of land. Doesn't make much sense. I have a presentation together showing that this area is better suited for multi-fam and using much less land to do it on. So working on make that one happen.
Sorry for the continued rambling and maybe a little more info than necessary. I hope to find a few more folks on this forum who are like minded and I appreciate having some feedback, as I don't have too many folks share these topics with.
Thanks again.
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