Hi I'm Andrew, a kid that's building a shipping container complex

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Hi I'm Andrew, a kid that's building a shipping container complex

Account Closed
Los Angeles, CA · Member since 2018 · 15 posts · 14 votes

My name is Andrew VanCura. I am a recent college graduate from Illinois. I am 22 years old and ready to create the vision that I have dreamed about for years; a shipping container apartment building. I have done years of research and planning while still attending school, and now that I am out, it's go time. I have no experience in real estate, development, or investing, and I will be the first to admit that I know nothing about the business world. What I do know is that I am putting 100% into making my visions true, and no matter what it takes, that shipping container complex will be standing and operating within 3 years. I realize I will need a lot of help during my journey, and I am hoping that I can connect with others that can provide me insight and advice from their past experiences. I will explain a little about my plans below, and I am always willing to talk more in-depth to anyone interested. Prepare yourself......

This shipping container complex will be comprised of 500 shipping containers, having 310 living areas total. 300 units will be single studio apartments, 50 units will create a total of 10 suite-style apartments, 50 units will create office space, a restaurant, a gym, a small shop, and a salon. The last 100 units will be used as hallways and utility space. Every living space will come furnished. The complex will be located within 50 miles from Los Angeles. The 310 apartments/suites alone is expected to generate $450,000/month revenue.

I want the image of this shipping container complex to be looked at as an affordable living space, but one that also has luxurious amenities included in the average rent price. The biggest focus of the amenities will be the outdoor pool and property. I envision the outdoor pool and property to look similar to a Las Vegas resorts. Big, open, lively, and beautiful to look at. Rent, all utilities, internet, parking, and all "fees" will be combined into one monthly payment for residents to make, with simplicity in mind. Every morning and night, a shuttle service will be running to and from Los Angeles to transport residents, for free.

Very big ideas, I know. Behind my crazy/optimistic mind, I also have the ability to think realistically. All of my ideas and plans have reasoning and financial projections behind them. My vision to create this shipping container complex will be incredibly difficult, will be very profitable, and will absolutely happen.

You know that one guy that is known as crazy, that is always is acting impulsively, is always cutting corners, but somehow always ends up on top? Well that's me. And by the way...... He's not acting impulsively, he made a plan and is acting promptly. He's not cutting corners, he just took a more risky approach. Ending up on top? That part is true.

Thanks for reading my introduction!

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Nathan GesnerBusiness Member
Moderator
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
8y

It's easy to jump on here and claim you have everything mapped out and can generate $450,000 in revenue every month. However, I'm 48 years old with a few years of life experience behind me, some investment property, and a decade of real estate experience and I suspect this is all a pipe dream. Let me ask some basic questions:

1. What is the cost for development? Land, permits, infrastructure, materials, furnishings, utilities, project management, property management, furnishings, sidewalks, pool maintenance, insurance for your free shuttle, etc?

2. How do you intend to raise capital to fund this project?

3. You claim this will generate "$450,000/month revenue" but have you really done the math? A quick Google search tells me the average 1-bedroom apartment in LA rents for over $2,000 a month. Utilities average over $200 a month. $450,000 revenue comes to less than $1,500 per unit. Subtract $200 per unit for utilities and you're almost $1,000 cheaper that the average. Now add in the cost of the furniture, your free shuttle, pool maintenance, common area utilities, property management, etc. It looks like you're going to spend $50,000,000 to make $50,000.

4. I've never developed land but I can tell you this: there are a ton of hurdles to clear before you stick a shovel in the dirt. What government entities have jurisdiction over this land? What evidence do you have that the demand exists? How will the local populace react to this development? Is an environmental assessment necessary? What police/fire requirements exist? How many parking spaces are needed per unit?  I could probably think of a hundred questions to address and I'm a complete novice in this arena.

Long story short, you're a 22-year-old kid with zero knowledge, experience, or capital looking at a project so vast in scope that 99% of the commercial developers in this country wouldn't even try it.

I hope you can prove me wrong.

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  • Kyle McCorkel
    Rental Property Investor · Hummelstown, PA · Member since 2015 · 638 posts · 653 votes
    8y
    Andrew VanCura Wow, awesome vision dude. My main questions are about your team and first set of actions. Who will design it for you, who will build it for you, how will you raise money? What is your exit strategy? Sell? Or hold and collect cash flow?
    0Reply
  • Account Closed
    OP
    Los Angeles, CA · Member since 2018 · 15 posts · 14 votes
    8y

    Thank you Kyle! When it comes to designing the complex, I personally designed an initial base drawing. This drawing was mainly to transfer my vision from my mind, onto paper, so I could better describe my idea to friends and family. I have a general understanding of construction, but no where close to a professional level. During the past couple months, I have taken a few additional steps with my drawing. I created a scale sized model to give a better visual (found that generic Jenga blocks are very close to scale shipping container dimensions). I have also shared my design idea with freelance architects, one of which has created a 3D exterior building drawing for me. This has allowed me to bring my idea "to life" by seeing a fully rendered representation of the idea that was in my head. I am currently at this point and trying to figure out my next step.

    For building the container complex, I am considering two choices. Option one would be hiring a referred contractor that has experience in building with containers. Option two is building the complex with my team of 7 people with consultation, 3 of which were laborers for a local construction company. I just purchased 2 containers and I am hoping they will be delivered within the week. I am planning on creating somewhat of a prototype with the containers, getting the hands on experience, learning by trial and error, and figuring out all the necessary materials. At this point I will have a better understanding on choosing option one or option two. 

    I am looking to raise money from private investors and experiment with a short crowdfunding run. I have no experience in either, but am trying to learn as fast as I can. I am open to any suggestions or advice. 

    My exit strategy is to hold and collect cash flow. Keeping my first property will hopefully allow me to better fund my future projects by not giving away as much equity during funding. 

    0Reply
  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    8y

    It's easy to jump on here and claim you have everything mapped out and can generate $450,000 in revenue every month. However, I'm 48 years old with a few years of life experience behind me, some investment property, and a decade of real estate experience and I suspect this is all a pipe dream. Let me ask some basic questions:

    1. What is the cost for development? Land, permits, infrastructure, materials, furnishings, utilities, project management, property management, furnishings, sidewalks, pool maintenance, insurance for your free shuttle, etc?

    2. How do you intend to raise capital to fund this project?

    3. You claim this will generate "$450,000/month revenue" but have you really done the math? A quick Google search tells me the average 1-bedroom apartment in LA rents for over $2,000 a month. Utilities average over $200 a month. $450,000 revenue comes to less than $1,500 per unit. Subtract $200 per unit for utilities and you're almost $1,000 cheaper that the average. Now add in the cost of the furniture, your free shuttle, pool maintenance, common area utilities, property management, etc. It looks like you're going to spend $50,000,000 to make $50,000.

    4. I've never developed land but I can tell you this: there are a ton of hurdles to clear before you stick a shovel in the dirt. What government entities have jurisdiction over this land? What evidence do you have that the demand exists? How will the local populace react to this development? Is an environmental assessment necessary? What police/fire requirements exist? How many parking spaces are needed per unit?  I could probably think of a hundred questions to address and I'm a complete novice in this arena.

    Long story short, you're a 22-year-old kid with zero knowledge, experience, or capital looking at a project so vast in scope that 99% of the commercial developers in this country wouldn't even try it.

    I hope you can prove me wrong.

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  • Chris SvendsenPro Member
    Front Royal, VA · Member since 2016 · 306 posts · 240 votes
    8y

    where there is a will there is a way.  Get out there kid and make it happen.  Without a doubt you will encounter obstacles but good partners can help to overcome.  Make it happen!  Dreams like this can be game changers.  

    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    8y

    It is a ambitious undertaking. Will obviously require millions in capitol investment.

    My guess is it will take 5 years just to achieve building permission. That is assuming any district will even allow your concept under existing building codes. 

    I would strongly advise you spend your primary efforts toward getting approval and then concentrate on generating financial support.

    I would not advise investing too much of your own money, family or friends money into this project before you achieve building approval.

    Concepts like this often die at the approval stage. If it does pass you risk being pushed out by investors with very deep pockets. My guess is you will have very little if any skin in the game which will allow you zero leverage with investors. Your best option is to achieve approval then sell the concept outright.

    1Reply
  • Account Closed
    OP
    Los Angeles, CA · Member since 2018 · 15 posts · 14 votes
    8y

    Hi Nathan! Yes, I agree that it would be extremely easy for someone to log onto this site and claim to have everything mapped out! In no way, shape, or form did I intend to give that message off from my post, and I am sorry if that is how you felt when reading it. In my introduction post, I wanted all the readers to understand I am a total beginner, so I made sure to include the statement - "I have no experience in real estate, development, or investing, and I will be the first to admit that I know nothing about the business world". 

    I am here to learn and connect with others, mainly due to my inexperience in the field. I am very eager to learn, and I completely realize that my plans sound crazy! I am going to try my absolute best to create the project that "99% of the commercial developers in this country wouldn't try". Maybe it will take me longer, maybe it will cost me more, maybe the project won't be profitable, maybe I will mess up 100 times. Regardless, I am determined, and I will make it happen. I will definitely consider all of the questions you asked me, and I do find value in your response. In my eyes, nothing about my proposed project is considered to be "normal", and it will definitely require a like-minded individual to see it from my perspective. 

    The $450k/month revenue projection I stated is solely an estimate made by me. To you, and maybe to others, that number may be unrealistic, and I accept that. If you would like to consider my plans a "pipe dream" that is totally OK with me. I know I am only 22 and don't know much, but I was under the impression that the term "revenue" was the income generated before any costs or expenses are deducted. When your 48 year old self asks me if I have really done the math, I can say yes I have. I was very clear to say "revenue" rather than "profit". I am completely aware than many deductions will be made to that number. I will gladly share my ideas and plans with you in greater detail, as long as you have the intention of helping me, and giving constructive advice. From your reply, I think you have negative intentions rather than positive ones. Thank you for your concerns though. 

    2Reply
  • Account Closed
    OP
    Los Angeles, CA · Member since 2018 · 15 posts · 14 votes
    8y

    Chris, I appreciate your positive stance! I agree with you, anything is possible. It will take very hard work to make the project happen, but I am ready for it! Thanks for your support!

    1Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    8y

    It never hurts to be ambitious however it is most important to be realistic. You could spend the rest of your life working on this dream, and probably will,  or concentrate on not reinventing the wheel and actually make money beginning now. Once you are wealthy you can then buy dreams.

    You seldom get rewarded by taking the path less traveled. Do yourself a favour now and get rich picking the low hanging fruit.

    For now your best approach would be to park your ambitions and leave the dreams to the dreamers.

    2Reply
  • Kyle McCorkel
    Rental Property Investor · Hummelstown, PA · Member since 2015 · 638 posts · 653 votes
    8y

    @Account Closed

    You will get some good feedback from the BP community - some will be more critical than others, but 99% of people on BP are just trying to help.

    I think due to your age and inexperience, you absolutely must do the two following things: a) educate yourself about EVERYTHING by reading books and listening to podcasts and b) network your @$$ off.  Find people who ARE experienced in certain parts of the deal who you can get as excited about this as you, and partner with them.  Find people with money who you can get excited and who you can convince to trust you.  Find people who are smarter than you that you can learn from.

    People WILL judge you for your age (not saying this is right, it's just the way it is) and you must overcome this by becoming an expert and being ridiculously professional AND by surrounding yourself with partners who do have the credibility and experience.

    Be humble and yet confident - realize that you have much to learn and be willing to listen to others' ideas and feedback.

    Be bold but not reckless in your actions - after receiving the proper education.

    It would probably be prudent to try to do some smaller projects first to build up your reputation, but if you are dead set on doing this then by all means go for it, you just have to be willing to work hard (I'm talking 80-100 hour weeks), be humble and be bold.

    0Reply
  • Account Closed
    OP
    Los Angeles, CA · Member since 2018 · 15 posts · 14 votes
    8y

    Thomas, I agree with you. The final product may take longer to be completed from waiting on approval permits. I have done some research on building code and requirements, but I do not know nearly as much as I should. I will make sure to find out the specifics of the district. All I know is that I am going to do everything I think is necessary to meet the requirements, and I will continue to revise the project plans until an agreement is made. To some extent, the districts approval decision is out of my control, and if they do not accept it after multiple attempts, a last resort option would be location change. I am also hesitant about using my own money along with families, but at the same time, I truly believe the reward outweighs the risk. I appreciate the advice, I will be looking into building requirements more in depth.  

    0Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    8y

    I've done my share of endeavours where people told me that I'm crazy and where I had absolutely no background in the various fields - didn't keep me from succeeding.

    I'm a 'big picture' person and I assume you are as well. I start off with the concept/idea/project from the outside and then I work my way into the field , towards smaller and smaller details. 

    That is very difficult to understand by people that are 'detail oriented and who start a project with the smallest part and work their way out. They will always complain that some detail hadn't been adhered to or things aren't perfect or how could I even think about starting something, without every little thing being in place. 

    I buy a house with a 5 minute walk through, while they're still sitting down, figuring cost of every part of the rehab. 

    Good luck with your project. Love the idea of container homes. I understand, from having talked to someone that build a container home for himself, in Richmond, CA, that the most difficult part was getting the plan approved by the city. Because it was (and still is) a new type of building, they simply didn't have any inspector with experience. 

    So, I would make an appointment with the city and sit down with a planner and see, if you can see eye to eye and take it from there. 

    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    8y

    @Michaela G.

    "I've done my share of endeavours where people told me that I'm crazy"

    Every person with a spouse or friends has been told they were crazy when they first start talking about investing in income properties. Fear of the unknown is a major deterrent for most. 

    The upside of asking for advice on here is that fear is not a factor. Experience, logic and reason dominate.

    0Reply
  • Account Closed
    OP
    Los Angeles, CA · Member since 2018 · 15 posts · 14 votes
    8y

    Michaela, I am really glad to hear that! When I read your stance about being a big picture person, opposed to a detail oriented person, it gives me somewhat of a reassurance that there are others who think the same way as I do. I have a hard time trying to explain my ideas to some people, mainly because their mindset is total opposite of mine. You explained it well! I am currently in contact with someone who has built container homes in California on a small scale, and he has succeeded multiple times. Converting the small scale to a large scale while adhering to code might be an issue for me, but I will definitely make sure to take the appropriate steps with the city before hand.  Thank you for your insight, I appreciate it! 

    0Reply
  • Manolo D.
    Contractor · Los Angeles, CA · Member since 2015 · 4k+ posts · 1k+ votes
    8y
    Andrew VanCura Before my first contract, while my company and license was a month old, I was getting a notary from my mailbox company for bidding documents to bid on a city contract, one guy was there picking up his mails and overheard me talking bout city contracts, and chatted a little, he told me that government contracts are tough to get, hard to please clients, and ridiculous number of days to get paid, he said it was more better to work on residentials because the day you get the job done, you get paid, or within a week. He smirked at me and told me Good luck with that one buddy. That was around February, by June, I got that 25k contract, by October, I got two 90k contracts, and it kept on rolling. By year 2.5, I hit my first million. If someone says you can’t do it, prove them wrong! They don’t feed you, you don’t need them. I wish I met that guy again so I could ask him “did you ever hit a million in contracts before 3 years when you started in residential?”
    1Reply
  • Michaela G.
    Investor · Atlanta, GA · Member since 2013 · 3k+ posts · 3k+ votes
    8y

    @Account Closed , whenever there's a discussion on BP about the book 'Rich Dad, Poor Dad", you can see who's a 'big picture person' (The ones that loved the book and understand what it's all about) and the detail oriented person (who hates the book, because the story isn't true and there's no rich dad and no poor dad and all kinds of details that they're having a problem with)

    1Reply
  • Account Closed
    OP
    Los Angeles, CA · Member since 2018 · 15 posts · 14 votes
    8y

    @Manolo D. Manolo, wow good for you! I feel the same way, anything is possible as long as you make it happen. The biggest influence/motivator for me is when I'm in an airplane, looking out the window, seeing the whole city right below me. I see so many buildings, so much money just sitting there in one sight. It shows me that no matter how many people tell me that my idea is too unrealistic, it is 100% possible to make it happen. Realizing that every single large building out of the hundreds I see has an owner, makes me want to succeed even more. It shows that people have done "the impossible" in the past, and the building is standing proof of it. If all of those building owners can do it, why can't I? 

    I'm glad you didn't give up! Thank you for the encouragement!!!!

    0Reply
  • Steve B.
    Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
    8y
    In your years ling dreaming and planning what contacts have you made with your target municipalities about regulations , permitting, and zoning for your idea? You can be the most earnest and inspired entrepreneur but the leviathan of the state is easily capable of quashing all your best laid plans with little effort.
    1Reply
  • Account Closed
    OP
    Los Angeles, CA · Member since 2018 · 15 posts · 14 votes
    8y

    @Steve B. Steve, I can see it from your perspective. I realize that permit denial does occur frequently, and it could result in business failure. At that point, I would either alter my plans to meet requirements, or change locations after accepting the fact that I no longer have control over what the city decides. I only see a couple options for that situation really. I could fight the cities decision, accept the decision and give up, or accept the decision and continue my journey to a different location. As of now, I would not consider myself ready to submit project drawings and plans. I still have a tremendous amount of preparing to do. I am glad you addressed the permit concern, and I will make sure to check with the municipality before hand, while also maintaining communication with them during the development.

    0Reply
  • Jamin Solomon
    Tucson, AZ · Member since 2017 · 13 posts · 8 votes
    8y

    @Account Closed That's crazy, dude!! But that doesn't mean its impossible. Please be realistic on your journey, but chase after it if its what you really want to do, man. You're super young and have time on your hands to make mistakes and correct them. Jeff Bezos has changed the world through Amazon and everyone thought he was crazy. His theory of regret avoidance was key to that so push for your dreams because you don't wanna look back and regret it when its too late. Best of luck on this long journey of permits and approvals lol.

    0Reply
  • Alex P.
    Investor · Longview, WA · Member since 2015 · 94 posts · 176 votes
    8y
    So I've lived in a couple shipping container complexes while working in the oil fields, sound similar to your idea. I think if the need is large enough it might be feasible, the rents in North Dakota were the highest in the country so there was a need then. Seems like the way California is going. Those complexes always had the worst reputation, it was like living in a bunker. I would be really curious to see how you're visualizing the design so it doesn't seem like you're living in a jail cell. Also when the economy changed those were the first things to become vacant and torn down. I do realize California and North Dakota are vastly different but regardless..
    1Reply
  • Adam Byrne
    Rental Property Investor · Los Angeles, CA · Member since 2018 · 28 posts · 7 votes
    8y

    Hi there Andrew,

    I too have had visions of container home projects. It's exciting to think you can retrofit a container and quickly build up a modular living system for a family or a an entire community as you envision.

    My recommendation is to start small. Buy one lot and place one container on it. Do your due diligence and select the right lot. Make sure you're clear with the county or city's building and planning department. Build it out, market it and acquire a tenant. Prove the model works and it's profitable.

    Then it will be easier to attract more capital to invest in a scaled up version of your vision.

    0Reply
  • Ola Dantis
    Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes
    8y

    @Account Closed Look, Andrew, if we look back historically, there were many people who were told by cynics that they were crazy and that their ideas were outlandish. In some cases, the cynics were right, while a handful of those ideas went on to be successful and some ideas even revolutionary. 

    Some of the advice you have received here may sound critical at first; however, there are some really good nuggets in there. So, I won't totally dismiss them. 

    You are 22 years old [you have a ton of energy + more optimistic view of the world], so, for instance, if you pursue this dream for another 8 years and you hit 30 and no container has been built, you better be ready to pivot. If it has please come back on this forum and say a few words @-ing the cynics, lol

    I personally know a man who pursued his dream for almost 15 years and that project has never started. Unequivocally, I  call that insanity. 

    To conclude, I'd say vehemently go after your dream but put a time stamp on it—if this doesn't work by 20XX, then I will start buying multifamily properties instead. 

    Hope this helps, Andrew. Goodluck, as I know you're going to need it. Thanks! - Ola 

    1Reply
  • Account Closed
    Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes
    8y

    I want to build a 300 unit college dorm style building, with tiny rooms and communal bathrooms, as an affordable rental for millennials instead of moving back in with their parents.  Once I scale the business I’m projecting 2 billion a year.

    0Reply
  • Philip Williams
    Rental Property Investor · Rockford, IL · Member since 2014 · 385 posts · 702 votes
    8y

    This reminds me of a flip thread I was reading, the flipper who had never done a flip before claimed he was going to make 150k on his first flip. HE did a ton of arrogant things in my opinion tagging people and claiming he knew best. He got a ton of views likes and responses, how beautiful the house was etc. Well that flip is still on the market the profit margin looks to have potentially sunk to 50k at most and it's been listed over 6 months. Before you think but 50k is a lot of money, they are in for close to if not more than 500k. The odds of this being completed in your three year time line are probably in line with the power ball. 

    Have the humility to learn from those around you. 

    John C. Maxwell

    1Reply
  • Vince Scolari
    Investor · San Jose, CA · Member since 2016 · 47 posts · 16 votes
    8y
    Andrew V. Hey Andrew very cool concept. I remember reading an article a few years back about a couple of guys who did build a successful container apartment development. Don’t quote me on this but I think it was in the Seattle area. You might want to do a quick google search and connect with those developers and/or anyone else whom may have accomplished a container project. Your project would have its own unique challenges and if you could pick the brain of those who have done it, it would provide you with a good step in the right direction. Good luck and keep us updated.
    0Reply
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