All Forum Posts by: Eric Winkler

Good morning James,

I work directly for the builder so I wanted to address your concerns.  Firstly, 4-8 months was never a timeline that was set by the build team.  It takes 6 months on average to build a house once you have permits and we have gone vertical - which wouldn't account for the permitting process at all.  Permits, pre Covid would take 30-60 days - now they take 90-180 days to obtain.  This is AFTER you have completed all the requirements to even obtain a permit.  As I have outlined below, these steps run in series, not concurrently.  It sounds like there may have been miscommunication or unrealistic expectations that were set.  Below is a timeframe of what needs to happen in order to obtain a permit with the City of Cape Coral:

As I stated before, the permitting process typically took 30-60 days (Pre-COVID). Now, due to the pandemic, an influx of demand, and a lack of local resources at the permit reviewer’s office, permits have been taking roughly 90-180 days. The standard overall permitting process timeline is below. Please take into consideration that all time frames are estimated and vary by project. Once we submit the completed permit package over to the local municipality, the wait time for approval is unfortunately out of our hands. To keep our process fair for all our customers, once approved, we will start the construction of your home in the order of project contract date. Please note your start date may be backlogged due to other starts ahead of you.

• Survey (8-10 weeks)

• Request Permit Prints from Design Team (4-6 weeks)

• Site Plan and Septic Design from Design Engineers. (6-8 weeks) Need survey back to start designs as this is site specific.

• Energy Docs (1-2 weeks) Need plans from Design Team to make request.

• Zoning Review by Entity (typical 4-8 weeks) Need completed design package to submit.

• Permitting (8-16 weeks) Need completed design package to submit.
• Approved Septic System Design from Lee Health Department (8-12 Weeks)

If you could provide me your site address we can check directly with the county to see the status of the permit.  Additionally, if you have any questions along the way regarding the process, we have an entire permitting staff and email setup to answer questions and provide updates as well (message me and I will give it to you if you don't have it already).  On a positive note your investment has increased in value significantly over the last 8 or so months - and although frustrating, I believe you will be pleased with the overall results and equity position you find yourself in once the build is completed.  

Again, feel free to reach out with any questions regarding your build - I will be more than happy to address any concerns and/or provide you with an update!

Hey Javier!  The process will vary depending upon what you mean by "the process", the builder, and the team that you are working with.  Are you planning on sourcing the lot yourself? If they are spec homes the design is pretty much done -especially if they have gone through permitting with this model before.  I can't speak to every experience but I do know there are teams out there that will require more leg work where you will have to spend more time and do some of the heavy lifting so to speak - this could be anything from sourcing your lot, to sourcing your funding, etc.  Many builders are builders - they usually have folks they can recommend and/or point you in the right direction - but their mission is to build properties.  There are also builders out there that are more integrated - meaning they have a core or team of folks that they work with on a regular basis.  They setup a pipeline for the investor to glide through - from pre approvals with the lenders, to lot acquisition, to build contracts, through permitting and building, even up to and including listing the property if you are flipping or getting PM in place if you are holding long term.  My advice - ask questions - does the builder work with investors?  Are they familiar with what you are trying to do (Build to Flip or Build to Rent), do they have a team in place?  (lender, broker, pm).  Hope that helps or at least gives you some idea of what to be asking when interviewing your perspective builder.

Hi Anna!  I can't speak to the Boise market per se - but I can speak to the model of build to flip - as I have worked with many investors successfully in this arena. There are a couple of factors to consider from my perspective.  First - the market itself - many markets have low inventory, high demand and rising appreciation - as I am sure you do in Boise right now as well.  Here in Florida - same thing - high demand, low inventory, high appreciation.  Next - the builder - what kind of build timelines are we looking at?  12 mos?  18 mos?  More?  The construction itself - are you starting with a property that is near completion or are you starting from the ground up?  Various pros and cons on either side of course.  For example - property is near completion (60-90 days) - Pro:  less likely to be delayed and closer to the finish line  Con:  Probably paying at or very close to market value.  Starting from the ground up:  Pro:  Many builders can/will offer better pricing especially if you can bring volume and/or have investors funding builds - wholesale pricing = immediate equity + appreciation = higher profitability.  Cons:  it's ground up construction  - know your builder, their strengths, their timeframes, and their weak links.  Finally - exit strategy - we know what to do if everything goes the way we want it to, but what if it does not - meaning we decide to hold - I agree with @Joel Wilson above -this is where it would be a good idea to run a cash flow analysis on the property before diving in.  As far as the taxes - it would be a good idea to work with a tax expert - there are many different ways to deal with the taxes, depending on how you have structured yourself and your investment.  Again - I am no CPA - but I would take a look at deferred sales trusts as well.  Wishing you success in your endeavors!

Another great question to ask the builder, or especially folks that have worked with the builder (brokers, realtors, etc) would be how many starts they have had as well as how many completed projects in the last year or so.  Of these - how often was the escalation clause executed?  Many builders have the escalation clause to protect themselves as nobody wants to see the builder go under - this would mean nobody wins.  Even in these times with volatile prices, labor shortages, etc etc I have seen many builders with escalation clauses not having to execute them because they budgeted appropriately.  Many builders are budgeting on price projections 6 or so months out (depending upon supply chain, permitting, etc) where you are and don't have to execute the escalation.  As with all investments - due diligence when selecting the builder is key!

@Jacob Hafer - there is high demand for new construction in many areas throughout the US as we are just now seeing the levels of construction in the US hit levels that it has not seen since pre 2008.   There are many markets that have a housing shortage which, of course, creates more demand.  Where are you looking for your investment - are you sticking locally, or are you looking at other markets?  As an example - Florida is a hot market as there are over 1000 people a day moving there - no state income tax, business friendly, landlord friendly - and high rental demand in pockets throughout the state.  I would take a look at the market you plan on investing in, the rental demand, current rents, etc - plug those into your analysis to make an educated decision.  

@Emmanuel Marquez - we have over 300 builds we are working on in the SW FL market.  We typically quote 12-14 month timeframes - the biggest wild card is permitting (including the pre permitting process).  In many areas this can take 7-8 months - we are happy when we can get all of our surveys, engineering, etc done WITH permit in hand in less than 5 months.  Some locales (like Cape Coral) - are making changes to the permitting process to make it more efficient - fingers crossed!

@Collin DeWese - SW Florida is a really hot market and we have been doing numerous projects for investors and homeowners alike.