All Forum Posts by: Eric Teran

@Sebastian Jimenez you have a great attitude that you want to get out there and be successful. Be sure to work smarter and not harder to reach your goals. At your age you have time so be patient but don’t waste it.

Read as many books as you can, listen to podcast, watch videos. There will be one or two aspects that interest you more than others. For example, maybe the construction aspect, or loans, or finding deals. When you find that interest go get a job in that field. Go to a bank and learn how lenders work, go work for a developer and see how deals are made, go find a realtor to study the market, and so on. Stay at the job for a year and soak in all the information. Don’t be afraid to ask the boss if you can listen in on a call or be present at a presentation. Just ask. It never hurts to ask. Then move onto another aspect of real estate. Maybe you like to design a house so ask an Architect if you can help on the weekends, ask a property manager to let you shadow them for a month and learn all their tricks. Ask lots of questions.

You are young and can explore all these opportunities. Get a different job each summer. Tell everyone your goals. If you don’t speak up people cant help you. In a few years you will be well rounded in real estate investing and have a lot of connections. You will find mentors and your network will grow so when the time comes for your first deal you will be ready.

If you ever want to learn how to understand zoning regulations for properties just let me know. Just like that your network has started. Good luck.

@Jon H. I’m an Architect and as long as you build what is legally by right they can’t deny you a permit. If you asked for a variance or special exception or a change in use, etc. Then they can deny your application. However, it sounds like you will not be doing any of that so you will be fine. Just verify all the site requirements. You do this by going to the zoning or planning office in you jurisdiction and ask them what may be built on that lot. There will be setbacks, height limits, and so on. Just adhere to those code regulations and you are fine.

I’m regards to modular it is not different than stick built. The value of the house will not be affected. No one can tell it is a modular house. Don’t get confused with modular and manufactured. Modular site on a permanent foundation while manufactured is on a chasis and usually in a mobile home park.

If down correctly modular will save you money and it will definitely save you time. I built my own house using Superior Walls for the basement which are prefabricated and a modular system for the two upper floors. PM me and I can give you my website that shows my house and a daily blog that I kept during construction so you can have an idea what you are in for. BP always blocks my comments if I give out my website in the forum since it goes to my architecture site.

In conclusion built what is legally by right and there is no stress and look into modular to save time and money.

@Chris Vee so my $175 SQ FT does not include soft cost. Those are all the plans and permit fees. The soft cost can add between $20k to $50k for a new build or major remodel. I also got a lower price since I'm an Architect. I'm always surprised when my clients get their bids and how much the price is in the DMV market. The biggest factor is labor. Rough materials are more or less the same. The finishes are a big difference. You can find nice wood floor for $2 SF or pay $10 a SF for wood from Brazil. In a 3,000 SF house, the difference is $24k. Those finishes start to add up. As you mentioned labor is the biggest factor. When I built my house I went looking for a day laborer to help me for a day to install a silt fence prior to construction. I couldn't find anyone to do it for less than $20 an hour. I did the job myself. 

@Jason H. You asked earlier in the thread what is our advantage? I believe it is two things.

We know how to read zoning codes. We know how to use them to our advantage and are not scared at pushing those limitation. We also know when not to test the waters thinking that a variance is doable. Zoning knowledge is big.

The other factor is that we can go into a space and understand what may be built. Our creative thinking doesn’t limit or scare us. The wealthy Architects don’t get old a lot of money to produce a construction document set. They get paid the big bucks to find creative solutions. Architects need to use that to their advantage in real estate investing.

@Jason H. And @Bryan LaRoche I have been able to remove my emotions when needed. It is like drawing in Cad or Sketchup where you can zoom in and be anal about every line being perfect but in reality you don’t need to zoom in so far. It all depends what is being drawn. Just like the emotion part.

I’ve grown in this aspect a lot since I branched out on my own. I always ask a potential client what they are going to do with their property in 2 or 5 or 10 years from now. It helps me focus their attention as well as mine. Do they want to pass it to their kids or make some good money in a year or two? Is it a developer who wants to make money. Then I have to design something with a positive return. What makes client X happy and how do we get them there with a great design? You design for your client and not yourself. It’s a lot easier that way and your personal emotions don’t become involved.

I see it more like a puzzle. When it comes time to do your own investment you have to put on that hat. For example, a skylight will look nice but it isn’t going to change the world so don’t knock down the bearing wall and rip up the roof because the $10k investment is not worth it. The developer thinks in terms of returns. So the skylight didn’t work but a nice big window does and that investment is only $1k. It doesn’t mean it is going to be ugly but there are always solutions.

Not every project is falling water but you can make every client feel like they have their own falling water within their means. This has helped me utilize my time wisely because it isn’t fun working for free.

I bought a vacant lot in 2015 in the city of alexandria for around $215k and then built a 3,000 square foot home for $400k. Plus permit and engineers the total was around $650k when we moved in during the summer of 2017.

I am an architect and drew everything myself. I acted as the GC of record and did a lot of the work myself. IKEA kitchen! I had a few GC to provide a bid and they were around $525k just for construction. A big savings doing it yourself but I am in the industry so I have some knowledge.

I saved a lot of money and time by using Superior Walls for the basement and a custom modular house for the two floors above grade. I wrote a daily blog during construction that I can share with you if you PM me. BP doesn’t let me give it out in the forum because it goes to my architecture website.

You have two routes; 1) Find a vacant lot which is hard to do in the beltway. Easier as you get further out. You will pay a lot for all the utilities to get to your house. 2) buy a dump of a house, tear down, and build new. You will still pay a lot for a tear down.

Using a GC, Architect, engineers, etc. Will cost around $200 SF. I think you can make $1.1 million work but you need to stay under 4,000 SF or choose incredible cheap finishes and get a good price on the land.

Let me know if you have any questions about the process. It is fun but lots of work.

@Stephen Mattison, I agree with everything that @David Edwards said. Manufactured is never on a solid foundation. Modular or prefab is on foundations. I wrote a blog a few years ago titled, "I love Modular Construction and so should you!" I believe there are more advantages than disadvantages. 

The majority of Modular companies will make you use one of their certified GC to install the home on the foundation so you can definitely find a GC with the knowledge and process of modular construction. The house also has to be a certain size, easy to get to, and designed with modular construction methods in mind to make it make sense financially. A custom home designed without the requirements (mainly width of boxes and structure) can't just say it wants to be a modular home. There will likely be too many modifications. Additionally, the design wants to limit the number of boxes that will be used. For example, a crew can set up four boxes in a day but if the house is 8 boxes they have to be out there for two days and a crane company will charge around $10k per day. 

So Modular can save money if done correctly. What it will save every time is time. No question about it. Time is money. 

I designed and built my own modular house. After calling around 30 modular companies I settled with Excel Homes as they were the ones that were most comfortable working with a custom design and Architect. I also used Superior Walls which is a prefabricated system for basements. That was also amazing. If you have a big lot then you can probably choose a predesigned plan which makes life much easier. 

In regards to banks, you just have to find a local bank that has experience doing modular. Typically a bank has 6 or 7 withdraws and they are more or less the same amount. Each draw is a few weeks apart as construction progresses slowly. With modular you will do 3-4 draws and they all happen within 3-4 months. The first draw is for site work and foundation, the second is for the modular installation, and the third is finishes and so on. The big one is the second withdraw. It will be around 50% to 70% of the loan. It also has to be coordinated so that on the day the trucks are on site ready to install the first box the bank has to wire the funds. It is kind of a catch 22 because the bank doesn't want to wire the fund until the first box is installed and the modular company wants the wire before the first one is installed. It is a very tense morning. 

Finally, appreciation. Modular homes appreciate the same as stick build. There is no requirement to say that it was built modular and no one kind tell. If you PM me I can send you my blog that I kept everyday during construction. BP doesn't let me link to it because it goes to my Architecture Website.  

Just like traditional buildings you have to be careful. Anything can go wrong if you don't have a good team behind you. 

Good Luck. 

@Sadia Ali there are a few things to consider.

1. How close are the utilities? Bringing electrical, water and so on will become expensive.

2. Is there a road? If not you may have to pave it if it is only dirt now.

3. fire insurance is expensive if you can get it. Some home insurance companies won’t cover you if you can’t get fire insurance.

4. Prefab construction may not work because the big trucks can’t get up there. My first question to any prefab company is to ask them if they can make it to your site.

5. The house will need a fire sprinkler system and defensible landscaping around the house.

It can be done but there are lots of items that will drive up costs. It depends what homes sell for in the area. Is this also a spec house that you will sell or for yourself? Can you subdivide the 4 acres and get more homes on there?

Good luck.

@Brandon Coleman when I was 22 I decided to use my $18k and travel the world for 18 months. I visited five continents and 60 countries. I travelled by car, plane, boat, donkey, mopeds and anything else that moved. I ate the best pizza in South Africa, I got mugged in Cuba and then got my money back when I mugged my mugger, I got lost in the Sahara desert, I used the toilet in Ghandi’s child hood home, I met a girl in the Czech Republic and then another one in Thailand and then Spain, I ate amazing beef in Argentina, I partied with Russians in Moscow’s until sunrise, played soccer in Ghana and Turkey and Brazil, I saw the most amazing sunrise in Vietnam, I had Guinness in Ireland which taste better than anywhere in the world, I met my wife in Ecuador, I met incredible people everywhere and so on and so on and so on.

Before I left on my journey everyone told me to save my money, to invest it, to start a life. That is what everyone does after graduating college. I knew I would one day have a family and it would not be the same as a solo trip around the world. If I waited until I retired to do my world trip I would not do 95% of the things I did.

I did invest it! I saw the world and grew as a human. I had $1k left at the end of my trip but gained an appreciation for life. It made me a better person.

You don’t have to be as extreme as me and spend almost everything you have and I’m not saying buy a boat either but enjoy your life. Be smart in life and in work and success will come. You might have to wait until you are 40 rather than 30 to be a millionaire but enjoy life and what you do.

Spend $30k on a house hack, rent all the rooms so it pays the mortgage and then go travel the world with the other $10k. Come back a changed person. Good luck!

@Jason H. I read the engineer thread and thought of doing an Architect these as well. I'm glad you did. I have seen a few Architects post on BP and I even wrote about 10 blog post on BP a few years ago about real estate investing from an architects perspective. I need to start that again. I graduated with a BA back in 2001 and finally got licensed in California in 2012. Now I live in the DC area and am licensed in DC, VA, and MD. In 2018 I started my own firm and it was the best decision I made. I make more, work less, and spend more time with my family.

I agree with you that we work for developers and get nothing in return so my goal is to become an Architect + Developer with my own projects. BP has helped me understand the thinking of an investor or flipper and about 50% of my clients are real estate investors. It is different speaking to an investor compared to a home owner. It is a completely different set of goals.

My wife and I built our own modular house in Alexandria and we own three properties in Ecuador so we have some passive income and the goal is for that to grow. Eventually I want my firm to slowly die out and the developing side with my own project to become my sole focus. I tell all my clients my business plans and it has lead to a few good contacts.

Architecture is a tough field and we don’t get that much respect. The problem is that there is a lot of bad architecture out there and DIY shows that do not show reality.