All Forum Posts by: John Blackman

Gas, especially for anything higher end.

I hate the microwave in a drawer thing.  Reaching down to the Microwave is less usable than having it at chest height or higher. 

These are both simply my personal bias.

One way we stretch our existing budgets is to get attic exemptions.  This may not apply to your market, but an attic doesn't really cost that much more to frame since you've already got the roof.  So the $/ft area of a finished attic is much less than the rest of the house, but you can sell it as finished space.

To lower costs, you standardize and buy in volume.  The houses look more plain and less imaginative.  That can be ok depending on your market.  It's not what we do because we are building in a niche market where we have to stand out.  Finishes and features that make a property unique really sell.  It may cost a little more, but if your property has something that is unique about it compared to everything else on the market in that range, I guarantee you buyers will chose your homes first.  Everyone wants to be a unique snowflake.  It doesn't have to be the whole house, but having one stand out feature will keep your home in buyers minds.  Things we do that 'stick out'

J-Frame tamlin siding - it adds cost, but looks unique

Irregular windows - see above

Non conventional roof lines - see above

Interior metal hand railings - see below

Unfinished concrete inside - Cheaper than drywall, its free!

Unfinished Mother in law space above a garage

A tastefully placed curved surface

A little cedar in the entryway - see above

If you have high ceilings, you can do the industrial AC thing

Now you don't want to do all of these in the same house, but each house has one that makes it stick out.

I know this thread was supposed to be about saving money, and here I am showing you how to spend it.  However I think the effect is the same.  You want a good return on your investment, so ask yourself is what I am cutting going to detract from what a buyer wants?  Is what I am adding really going to push a buyer over the edge to purchase?  Does this make me stand out, or will no one notice if I make this change.

That being said, a good deal is a good deal, so I wouldn't limit myself to only one acquisition strategy.  If you find a property that meets your criteria, it is certainly nice to have one that can perform right away. 

Building takes a lot of time, and you're not going to see immediate income.

Building to rent can be a good strategy if you're up for it.  This assumes that you can build for below the retail price.  Plus if you are building, you can finish out the project with sturdy materials suited for renters.  It's kind of like making your own discount property, although finding stressed (discount) new construction is much harder and likely comes with some extra cost to fix a half completed project.

Hi Matt, welcome to BP!

I'm going to stick to the rule that I use with just about anything new, whether it's a vendor, an investor, or new strategy I want to try.  Do one, learn, do two, learn some more, do four and by then you will have probably figured it out.  If the vendor, investor, or strategy doesn't work out, you've managed your risk and won't end up with a pile of projects with a partner that doesn't work.

Each market is different and comes with their own hurdles, but as a first step I would recommend partnering with an existing builder that has a good track record.  Act as an investor in a spec build and learn.  Someone else is doing everything you need to learn which will keep the project flowing as well as any construction project does.  You will discover what parts of the business you want to take over as you watch the project being done by the builder you team up with.

I chose not to be a developer specifically but instead to be a financing company that hires builders.  The primary reason for this is that you cannot scale yourself.  No matter how good you are, your capacity to manage projects is limited.  So if you want to go beyond what you can take on yourself, you're going to have to hire builders to manage projects for you.

That being said, I do think it's important to do a few more hands on so you can learn the pitfalls and budget considerations for a project.  Those skills will help you create successful project scopes and budgets with each successive project.

And a sense of shameless self promotion, Lifeonpire.com just posted an interview with me where I talk about the steps our company went through to get where @Bryan Hancock  and I are today.

http://www.lifeonpire.com/podcast/13

WEEK 4

Overview

The plumbing rough has been completed, but our city inspector did not show on Wednesday as planned.  So we will not be able to install steel and pour until that inspection is done.  We do have a nice video this week though.  Hopefully we'll have some poured concrete next week.

Video

https://www.youtube.com/watch?v=ACrKp2JHHxc

Typically when you form an LLC, the splits are listed in the agreement and are fixed. This is one huge problem I have with LLCs. So we get around this by creating new LLCs for each project as the splits don't always make sense for each project depending on who is bringing what to the table. So as far as I know you cannot change the splits over time without filling an amendment to your LLC with the Secretary of State every time you want to update it.

That being said, you can give whatever splits you want regardless of what is in the LLC docs. They only really matter once you start suing each other. At that point whatever is in the LLC is what will hold up in court.

WEEK 3

This has been a bit of a lost week.   Our plumber is backed up and his scheduled slot was Friday.  It rained.  He is scheduled to do the plumbing rough on Monday.

WEEK 2

We dug the exterior beams this week.The ground is especially hard and the plan calls for deeper beams than most due to the large number of corners in the slab design which has been slow moving.  We are still aiming to pour next week.

Complete this week

• Dug beams

To Complete next week

• Plumbing rough
• Install steel
• Termite treatment
• Pour foundation

Blocking Issues

• None

Pictures

At the outset this sounds like a pretty good relationship.  The builder has a track record which is super important, and you know the market really well.  Ultimately you cannot know for sure if it's going to work out.  I went through 3 bad builders to find the 3 good ones that I have now.  Each one of them cost me a substantial amount of money, but the deals still came out in the positive.

The best advice I would recommend is to plan, plan, plan.  Go over your budget multiple times.  Get hard bids.  Add 10% to your conservative budget and borrow that amount from the bank.  If you can, build one first to see how the experience goes.  If it's not working out, you want to find out on one house, not two.

You will learn a lot along the way, not matter how it works out.  You will get better on each successive deal.  You will come up with better processes and find out what you need to improve.

When you are determining splits, make sure your interests are aligned so everyone makes more money if the project is done more quickly and on budget.  Time is the greatest killer in a construction project.

At some point you have to go make the step.  Having a builder with high integrity is a great asset to start with.