All Forum Posts by: Sue Hough

@Chris Allen. What I have done in the past is what Terri stated above; secure the contract on the land with a very long due diligence period to allow you ample opportunity to allow for zoning changes. I would not recommend using a standard MLS contract, you would want to have your attorney draft one specific to this deal. Zoning changes can take months. After zoning is approved you need permits, which requires architectural plans and various land surveys. Do not close on the property until the land is zoned for what you want and you have your plans approved...this is key. The city can tell you everything looks good, but that means nothing. All it takes is one salty neighbor to lay some fertilizer down to muck up the process and stop the development. So, let me repeat, do not close on the land until you have your permits in your hand!!!

Good luck!

@Jonathan Orr I would always steer to tilt-up as long as you have the space to bring in heavy equipment to maneuver the panels.  Here are my main reasons; tilt up is significantly stronger than cinder block, far less labor intensive which equates to fewer errors, saves time because it requires less labor and is not subject to weather conditions, and there are many brick manufacturers which make an embedded brick system (natural thin brick) which adheres directly to the panels, thus an additional cost and time saver. Overall it is a cleaner product with fewer errors and saves tremendous time versus cinder block.

Good luck!

@Michael Cline welcome aboard!!  My recommendation to you is; learn as much as you can and before today is over set a date on a calendar when you are going to put your first offer on a project (no more than 30 days out).  Then go do it, don’t get caught up in needing to know everything because that does not happen in life.  Learning from your mistakes is also learning.

Good luck and we are always here for you!

@Peyton Clark every contractor, until you have a long standing working relationship, will require a down payment.  This is determined by the scope of the work and amount of money out of pocket.  

Typical is 30% on projects under $75k and 20% on projects over.  Ask if your hard money lender would provide some funding at closing for initial start up expenses.  If not, you will need to provide this out of pocket.

Good luck!

@Bruce P.. There is no need for you to specify every building code detail, as it is accepted and understood practice to include the term “Code compliant” or “build to code” on your SOW.  If your contractor is not familiar with the term, that is the best litmus test to find a different contractor, whether it be an electrician, plumber, carpenter or any other.  Seasoned contractors have a full working knowledge and understand which building codes are applicable (or it is their responsibility to clarify which codes apply) and fully understand it is expected to build everything in compliance, you do not need to spell it out.  

There are always instances which I am unfamiliar with a certain code (as all contractors) and how it applies. Recently we were framing a new home and I was unclear as to the specific spacing which was required for “hurricane clips” on the framing.  It was my responsibility to find the correct code and be in compliance.  Do not rely on architects, as many of them do not know the small detailed codes. It is not their responsibility to spell out every code, or your blueprints would be 1000’s of pages :).

Good luck!

@Emanuel Escarpita welcome!  Just a couple of comments about working in Chicago; unfortunately you will never have the opportunity to “talk” to the building inspectors, as they are a group of elite individuals who do not have listed phone numbers and you will only see after you request for inspections via an online portal.  The City of Chicago Building Department is not friendly to newbies or any sort of people.  It comes down to knowing the codes.  My recommendation is to work with an architect who is familiar with Chicago and has many years experience.

Just because you are zoned “multi-family” does not mean you are eligible to convert the building.  Also, what classification of multi-family is it?  Many factors go into determining the feasibility of conversion, such as; FAR (floor area ratio), off street parking, compliance with fire standards and so forth.  

Finally, I would be very cautious about your new find.  The Chicago market is saturated with investors, to the point there is almost no inventory. The small worthy investments which go on the market are under contract almost immediately.  Therefore, every property which is on the market longer than a week is very suspect, as I am positive many investors have already toured the building and have found it unsuitable.

Good luck!

@Danielle Dieni welcome to BP and a great question!  When you are first starting out it is always best to have a contractor with you to establish a “safe” budget.  There are just too many items which can be overlooked by someone without construction experience such as: structural issues, improper electric, faulty roofing and so on.

Having said that, many contractors are not crazy about doing this, as bidding a project takes quite a bit of time and, let’s face it, investors look at quite a few properties before they find a good fit.  You may want to find a good contractor you trust and in the beginning before you are able to give him/her a project, offer a small consulting fee.  I have been willing to help out investors I am confident will send me work for $250-$500 per bid.  This allows you to have the numbers you need in a timely fashion and the contractor is happy.

Good luck!

@John Zavala to answer you question in a nutshell; No.  There is no one stop shop to evaluate raw land as each piece of property is unique.  The main basic criteria for evaluating the land;

1.  Zoning - is the zoning appropriate for what you want to build

2.  Engineering - is the soil able to bear the weight and infrastructure of construction.  Is the soil “clean”?  Is the runoff suitable?  Is detention required?

3.  Water and waste - are you city water and sewer or well and septic.  How deep do you have to dig and which septic system is needed.

4.  There are a mired of other entities to verify necessary information to build such as; Department of Transportation, Army Corp of Engineers, local fire departments and so on.

Good luck!

@Mike Russ so far as the value of the land once you split the parcels @Greg Dickerson is spot on.  The only thing I can add is; do a complete and thorough search of sold vacant land within your local area to compare lots under those circumstances.  The reverse is; to see what new construction homes are selling for in your area and back out the cost of construction, infrastructure, holding expenses, profit and so on. The one variable in the “reverse” scenario is quite often the builder does not include the “add-on’s” in the sales price, just the base model.  So the numbers may be misleading, but it can give you a good ball park.

Good luck and if you have any additional questions you can always message me.

@Mike Russ congrats on your exciting new venture.  Ground up construction is very rewarding and, in my opinion, the most fun.  Having said that, you did not indicate you had a strong construction background, so I will assume you do not.  Before you begin this journey you will need to for a strong working relationship with a builder/developer because;

1. A lender will require a builder with experience for the loan.

2.  The process throughout is, what I consider to be a very advanced undertaking.  You need experience and knowledge in; soil suitability, EPA guidelines, Department of Transportation requirements for highway/road access, road development, zoning and permitting, accurate bidding, utility management, life/safety requirement and so forth.  

I am sure you have the brain power to work through many of these hurdles, but a builder/developer has the knowledge to know which questions to ask and that is the key.

Good luck to you!