Young Architect Starting Out Flipping -- Columbus, OH

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Young Architect Starting Out Flipping -- Columbus, OH

Account Closed
Columbus, OH · Member since 2020 · 5 posts · 7 votes

Hello, bigger pockets world

I am an architect, I have just finished my master's degree in architecture and have practiced a few years prior -- together I have been in the game for around ten years.

Rather than returning to a job being a monkey at an architecture firm, working long hours, living on mediocre pay in an expensive market like NY or LA, I've decided to move back home to Columbus, Ohio to try to build my own projects.

With architecture, you’re never really trusted to build something unless you have already built something. So, in this case, I am hoping to be my own client and get my first work built.

Because I don't have a lot of cash on hand, I was imagining to first buy and flip, and with the money earned use it to purchase more and to keep it growing. Ideally, I would like to own rentals and eventually soon building new builds, once I have a built a network of contractors and trusted pros.

The goal is to challenge the business models of architecture offices and to also challenge developers a bit. The city is being overrun by developers and flippers doing minimal work to try to stretch their dollar as far as possible. I get it, it's capitalism. Though this is my home and I think it deserves a little bit more love than it is getting right now. And I recognize that by having good design sensibility, being an architect and understanding where to focus the money, I believe that I can make much higher profits for the same amount of money invested as a typical flipper.

My father, as a hobby, has been buying and flipping homes for the past 8-10 years. He has experience with the process, but I am hoping to find funding on my own. He is willing to oversee the project and will help me look out for problematic areas, and knows a lot of contractors.

I also would like to do a lot of the work myself, at least demolition, framing, electric (my father is a trained electrician), insulation, wood flooring, trim, etc. and my father has most any of the equipment I would need, but financially I would like to be independent of him.

What are the best ways to get started and to find funding without a lot of money on hand? I have the know-how and am confident that high profits can be made, I just am trying to find the best ways to purchase a house and fund the first project.

Thanks kindly!

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Nik Moushon
Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes
6y

@Account Closed

First, congrats on graduating from architecture school. Thats not an easy major. I know, I did it and have been practicing for nearly 10 years now. 

Second, if you went through the trouble and expense to get that degree dont waste it by not going to work in an architecture firm. Architecture school only teaches you a small fraction of what you really need to know. You gain most your experience and knowledge from practicing in a firm in the real world. You are doing yourself a great disservice. You will be wasting your degree, throwing away the opportunity to gain knowledge you will gain no where else, and you are shooting yourself in the foot if you really want to challenge the business model of architecture and that of developers. You cant challenge something you have no knowledge of. And trust me, interning on the side while going to school is not going to give you the knowledge and expertise you will need to challenge the system, I've done that too. I'm like you and want to change how architecture is practiced and perceived in the world but through my almost a decade of practice I know I could not have done it without the knowledge I have gain working in firms. I've worked in a large home developer company (300+ employees) and I've worked in a small 10 person firm. They both have given my knowledge and experience I would NEVER have gotten if I went out on my own at the start. I'm not saying going out on your own is a bad thing. I'm just saying you are going to miss out on a absolutely HUGE amount of experience and knowledge if you do. Really, really consider what you want to do. If all you want to do is REI and flip house then go for it....just knowing that you didnt need to waste money on a degree to do that. But if you really want to change architecture then you should go work in a firm. You will want to be picky about the firm you work for, not just any will do, but once you find that one that really treats you as an asset and not a tool...your learning curve will sky rocket.

Third, If your "mission statement" is really want you want to achieve for yourself then I would suggest looking up Johnathan Seigal. He is based in San Diego, CA. He is one of the pioneering architects of Architect as Developer (A+D) and is one of the most successful at it. This A+D model is 180 degrees from the traditional architecture business model and is almost never even mentioned in school let alone taught. If you want to fast track your goals you need to dive into this kind of business model. This is what I am wanting to following and I am currently practicing it in my own REI side jobs. If more architects practiced this model we could not only fundamentally change the architecture business model but we could change entire cities to how architects envision them to be and take the control out of the hands of developers who only care about the bottom dollar. I could talk for hours on this subject. So if you want you can PM me or we can have that conversation here for others to join in on but I don't want to distract from your main point in your OP too much. 

Fourthly, if you dont have a lot of cash and no job then you have two options: Hard Money or Private Money. BP literally wrote a book entirely on this principle. So its definitely possible but its not easy. If you have no experience that you can promote to back yourself up on it going to be a hard sell....just having your degree isnt going to be enough. Saying your dad has experience isnt enough either...unless he's going to sign the loans with you. The easiest way to start out is to get a loan from the bank, which requires a W2. Another reason to go get a job at an arch firm. There are more people on here that started out with a full time job and did REI on the side than those who started from purely hard/private money. You will have a much easier and much less stressful time on your first job if you going with traditional financing. Having a hard/private loan go south on you hurts a lot more than a bank loan. There also no reason no to team up with someone. Yes, your dad has experience and could be a great source...but he's also your dad lol. There a lot of good and bad things about working with family and every family is different. You just have to gauge that yourself. Teaming up will also make getting financing a lot easier no matter the type. 

I hope this was helpful and I wish you the best. If you have any other questions fell free to reach out. There are a good number of us architects on here (licenced and un-licenced). Lots of different experiences and expertise for you to throw ideas against. 

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  • Nik Moushon
    Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes
    6y

    @Account Closed

    First, congrats on graduating from architecture school. Thats not an easy major. I know, I did it and have been practicing for nearly 10 years now. 

    Second, if you went through the trouble and expense to get that degree dont waste it by not going to work in an architecture firm. Architecture school only teaches you a small fraction of what you really need to know. You gain most your experience and knowledge from practicing in a firm in the real world. You are doing yourself a great disservice. You will be wasting your degree, throwing away the opportunity to gain knowledge you will gain no where else, and you are shooting yourself in the foot if you really want to challenge the business model of architecture and that of developers. You cant challenge something you have no knowledge of. And trust me, interning on the side while going to school is not going to give you the knowledge and expertise you will need to challenge the system, I've done that too. I'm like you and want to change how architecture is practiced and perceived in the world but through my almost a decade of practice I know I could not have done it without the knowledge I have gain working in firms. I've worked in a large home developer company (300+ employees) and I've worked in a small 10 person firm. They both have given my knowledge and experience I would NEVER have gotten if I went out on my own at the start. I'm not saying going out on your own is a bad thing. I'm just saying you are going to miss out on a absolutely HUGE amount of experience and knowledge if you do. Really, really consider what you want to do. If all you want to do is REI and flip house then go for it....just knowing that you didnt need to waste money on a degree to do that. But if you really want to change architecture then you should go work in a firm. You will want to be picky about the firm you work for, not just any will do, but once you find that one that really treats you as an asset and not a tool...your learning curve will sky rocket.

    Third, If your "mission statement" is really want you want to achieve for yourself then I would suggest looking up Johnathan Seigal. He is based in San Diego, CA. He is one of the pioneering architects of Architect as Developer (A+D) and is one of the most successful at it. This A+D model is 180 degrees from the traditional architecture business model and is almost never even mentioned in school let alone taught. If you want to fast track your goals you need to dive into this kind of business model. This is what I am wanting to following and I am currently practicing it in my own REI side jobs. If more architects practiced this model we could not only fundamentally change the architecture business model but we could change entire cities to how architects envision them to be and take the control out of the hands of developers who only care about the bottom dollar. I could talk for hours on this subject. So if you want you can PM me or we can have that conversation here for others to join in on but I don't want to distract from your main point in your OP too much. 

    Fourthly, if you dont have a lot of cash and no job then you have two options: Hard Money or Private Money. BP literally wrote a book entirely on this principle. So its definitely possible but its not easy. If you have no experience that you can promote to back yourself up on it going to be a hard sell....just having your degree isnt going to be enough. Saying your dad has experience isnt enough either...unless he's going to sign the loans with you. The easiest way to start out is to get a loan from the bank, which requires a W2. Another reason to go get a job at an arch firm. There are more people on here that started out with a full time job and did REI on the side than those who started from purely hard/private money. You will have a much easier and much less stressful time on your first job if you going with traditional financing. Having a hard/private loan go south on you hurts a lot more than a bank loan. There also no reason no to team up with someone. Yes, your dad has experience and could be a great source...but he's also your dad lol. There a lot of good and bad things about working with family and every family is different. You just have to gauge that yourself. Teaming up will also make getting financing a lot easier no matter the type. 

    I hope this was helpful and I wish you the best. If you have any other questions fell free to reach out. There are a good number of us architects on here (licenced and un-licenced). Lots of different experiences and expertise for you to throw ideas against. 

    4Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    6y

    Hi @Account Closed, welcome to the site! I would look into an FHA loan.

    1Reply
  • David Frandsen
    Real Estate Agent · San Diego, CA · Member since 2014 · 205 posts · 123 votes
    6y

    @Account Closed There is a concept that I have always liked: We all have an unfair advantage. Capitalize on that advantage. 

    For architects this can be powerful. They understand building. Can make properties look cool with low cost materials. Good luck on the flipping! 

    2Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y

    @Account Closed If you have a W2 job I would recommend getting an owner-occupant mortgage that builds the rehab into the loan.

    If you do not have a W2 job then you will need to find a good deal and get hard money for it.

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
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    3Reply
  • Account Closed
    OP
    Columbus, OH · Member since 2020 · 5 posts · 7 votes
    6y

    @Nik Moushon thanks so much for the advice!

    Sorry I was being a bit vague. But I have worked as an architect, for several years. I worked at highly competitive starchitect offices, one Danish and one Rotterdam-based, and was able to work directly with developers. I co-lead projects and worked for heavyweight developers. You’re right, it is incredibly educational and was super transformative in having me question the model and architect/developer relationship. I have been cooking on the idea throughout 3.5 years in graduate school and after a long thought, I decided to give myself a year and take the risk to see what will happen. Sink or swim.

    I should also note that I have talked with many colleagues before making this move. I cast my questions wide and I received incredibly encouraging feedback from those who know me best, and ones I trust would give me honest and fair feedback.

    I am only a few weeks out of submitting my master’s thesis and officially graduating. This venture is very much in its infancy but my aim right now is to find others and to begin teaming up.

    You are right about my father, I completely agree, I only mentioned him because I realize how naive I may sound -- graduating as an architect and trying to jump straight into this business. But, my father has been able to do it as a side hobby while also having a highly stressful job that is completely unrelated to the industry.

    I am in the process of developing a proper business plan and have filled for an LLC. Is it a ridiculous thought to think I could find an investor? In a very ideal world, a person to foot the bill for the costs and receive a percentage of the profit after agreeing on time/terms?

    Thank you again! 

    0Reply
  • Account Closed
    OP
    Columbus, OH · Member since 2020 · 5 posts · 7 votes
    6y

    thank you @David Frandsen this is encouraging, and precisely the advantage I see too. I think it'll also be helpful to be able to easily 3D model to test various ideas and to get quick and precise measurements for cost estimates, material needs, etc. 

    cheers

    1Reply
  • Account Closed
    OP
    Columbus, OH · Member since 2020 · 5 posts · 7 votes
    6y

    Thank you @Remington Lyman for the neighborly advice. I plan to possibly get a small part-time job, just to cover rent, but I'm not sure if I am ready to take on a full-time architecture position at a Columbus firm. There may also be a chance to teach, but that wouldn't give me a W2 until the fall. 

    cheers. 

    1Reply
  • Remington LymanBusiness Member
    Real Estate Agent · Columbus, OH · Member since 2017 · 6k+ posts · 7k+ votes
    6y

    Sounds like you will need to come up with creative financing. 

    [email protected]614-541-8475Podcast Guest on Show My Job Laid Me Off, So I Replaced My Salary with Rentals
    Reafco512 Reviews
    WebsiteView Page
    0Reply
  • Account Closed
    OP
    Columbus, OH · Member since 2020 · 5 posts · 7 votes
    6y

    @Remington Lyman sorry for the redundancy! I have not mastered the forum interface yet.

    I guess creative financing is what I'm trying for or find an investor. Is it crazy to think an investor would be interested in something like this? Making a percentage of the profit in a 6-month turnaround? 

    Columbus seems to be booming, and expected to for some time from the reports I see. Are there investors near (or far) who may be interested in riding this venture with me? My intention is to keep this growing to eventually have new-builds within the next 3-5 years. 

    1Reply
  • Zeke Liston
    Real Estate Agent · Columbus, OH · Member since 2018 · 1k+ posts · 1k+ votes
    6y

    What interests you about new-builds @Account Closed?

    0Reply
  • Nik Moushon
    Architect · Wenatchee, WA · Member since 2018 · 843 posts · 907 votes
    6y

     Sorry, I totally misunderstood your work experience. Thats good to hear you've experienced the real world lol. I see so many recent grads coming straight out of college and think they are going to be the next Mark Zuckerburg of changing architecture and they dont have a clue about what actually happens in the real world. Dont get me wrong, wanting to change architecture is a great thing, but you cant change it if you dont know anything about it. Hearing you say you worked in some starcitect offices is a good thing and makes me cringe at the same time lol. Mostly just because of personal preference of what office style I like to work in than anything against those architects. As you found out, I'm sure, you can quickly get pigeon holed in those large offices and feel like you are just another employee with a number....not to mention the horrible hours and the cost of living. I worked near Chicago straight out of college and quickly found out that I love to visit the big cities for a day or weekend but I hated living there. Too many people and way to expensive. Thats just me though. Moving back to a smaller city is a big change and I think you will find it a good change. My suggestion would be to find a small architect office to work in. I would suggest looking for an office of around 10 people or so. You get a lot more hands on experience and one-on-one time with people who really know their stuff. But the absolute BIGGEST advantage is you will start to find out who is who in your localized area. You will start to work with the local developers. You will find out who the local contractors are (the good and bad ones). You will start making connections with people you would not have had otherwise. Hell...I know the mayor of my town on a first name basis now lol. Since I work with the city on development projects and are in meetings with them I get that one on one face time with people I never would if I just did things on my own. If you want to make those kind of changes you spoke of you have to start somewhere and there is no better place than your home town. Starting small and building a reputation. Who you know will trump what you know almost every time. I know I've already mentioned it but find a firm that can give you that foot in the door for your local market. Find one that does a lot of local but mid to large size projects. The more variety of projects the better. You dont want to work for someone who does just single family home or one that does only office commercial buildings. You will not want to be working for someone for forever and so to cut the time down that you are reliant on a W2 you need to gain as much and as broad of experience as you can. The quicker you can builder those local relations the better your business will be at the end. 

    Here are a couple books I suggest you read:

    https://www.amazon.com/Architect-Developer-Guide-Self-Initiating-Projects

    https://www.amazon.com/gp/product/0812224051/ref=ppx_yo_dt_b_asin_title_o02_s00?ie=UTF8&psc=1


    The first book is written by an architect and goes into how to be an Architect as Developer. If you really want to reach you goal as a practicing architect, this is the business style/model you will have to take to succeed....or find a billionaire who can fund you and let you completely take over. The second book is written more from a developers perspective. It really gives a great point of view on how different developers became extremely successful AND how their working relationship with the architect made the project be an even bigger success. 

    I would strongly suggest looking into Jonathan Segal, FAIA. He has a couple videos to watch and offers a class on A+D. I havent taken it yet but plan to (as soon as my money is not tied up in a construction project). 

    Also look at the podcast Buisness of Architecture by Enoch Sears https://www.youtube.com/user/BusinessofArch . He covers A LOT of different topics regarding architecture. Everything from how to run a traditional arch firm to being a architect as developer and a lot more. 

    Working with your father can be an amazing thing. I love working with mine. But its just not for everyone. Theres nothing wrong with that. Just no amount of money is worth ruining a relationship with a family member. So as long as you two know how each other works and can get along then go for it! Just make sure to run it like business partners not family partners. try to keep as much emotion out of it as possible. Because when s*** hits the fan you want to see it as a business failure not a family failure. Just words of caution is all here. Not pressuring you either way. 

    Going with an LLC is the right move. I just got one this year as well. If you are set on going out on your own make sure your business plan is solid. I would also suggest setting it up in a way that helps you towards your architecture goal. Set it up like a A+D business model. Set yourself up to get that experience on how to run projects in that manner so you can just start breezing through all you future ones and you dont have to switch business models. The typical house flip business model is different than an A+D model. They are similar but their are some key differences. Start setting yourself and your business up so they follow the path to your end goal. No need to have to jump or switch paths later on just because you took the easier path first.

    You can find private investors to work with for sure. They are out there. Again...its who you know not what you know. If you are set on only using private money then you have to know someone who is going to bank roll you. If you start out small you can usually find 2-4 people to usually get you enough to do your project and they dont have to be rich. But that might cover you for only one SFH at a time. If you ever want to start doing larger projects then you have to find people with more money. There is always hard money but that can have some really tough terms to agree to. There are other ways to get creative with financing also. i.e. find a house with a lot that is big enough to split. Then you will have a free piece of land to build on and the value of the land will cover the down payment on the construction loan. That way you get a free piece of land and have to come up with zero cash for a down payment. Once you get a feel for how the banks and project financing works you will start to see some creative ways to get what you need. The one good thing about our degree is it teaches you to be extremely creative. That creativity doesnt have to stop at building design.

    I'm not too far ahead of you in my journey to be a true A+D. So please reach out any time and we can bounce ideas of each other. Best of luck.

    1Reply
  • Joshua Myers
    Rental Property Investor · Columbus, OH · Member since 2014 · 148 posts · 177 votes
    6y

    @Account Closed you can find someone to give you money in the current market. But without any sort of track record it's probably going to be recourse debt. I'm also skeptical that any serious investor would put down a serious chunk of money in this scenario unless the deal was an obvious home run.

    As far as the Columbus market being a good place to start a serious house flipping business, that's debatable at best. Individual deals can be profitable, but the competition is crazy and the lack of supply is making deals hard to come by. The fact that the local economy is roaring doesn't make Columbus a good place to start a house flipping business. The business model is only profitable if you have A) a steady supply of B) below market value houses. At the moment you don't have either of those. Yes, some of us are finding deals here and there and making good money. But I'm also seeing a lot of people overpaying for rundown houses with no profit potential because they NEED to find a "deal."

    1Reply
  • Peter Lohmann
    Property Manager · Columbus, OH · Member since 2012 · 309 posts · 275 votes
    6y
    Originally posted by @Joshua Myers:

    competition is crazy and the lack of supply is making deals hard to come by. The fact that the local economy is roaring doesn't make Columbus a good place to start a house flipping business. The business model is only profitable if you have A) a steady supply of B) below market value houses. At the moment you don't have either of those. Yes, some of us are finding deals here and there and making good money. But I'm also seeing a lot of people overpaying for rundown houses with no profit potential because they NEED to find a "deal."

    Quoted for truth.

    1Reply
  • Account Closed
    Investor · Columbus, OH · Member since 2017 · 861 posts · 1k+ votes
    6y

    Plus, you would be competing with the avalanche of money from private equity buying up seemingly anything on the market cheaper than normal so they can turn them into rentals. (Vinebrook etc.) 

    Then for the deals they don't want or don't see, you have little local buy and hold guys like me who can pay more than a flipper or wholesaler, who still want to keep growing but have the systems in place to make a skinnier or riskier deal work as a BRRRR. I am beginning to think I may be "dumb money" and there's a whole bunch more like me.

    This is the strongest market I've ever seen for Columbus, honestly.   Perhaps one of the outer markets, Marysville etc? 

    0Reply
  • Joshua Myers
    Rental Property Investor · Columbus, OH · Member since 2014 · 148 posts · 177 votes
    6y

    @Account Closed I've thought about Marysville, but I'd be worried long term about how concentrated the local economy is around Honda and Scott's.

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