New Guy seeking counsel - architecture-development-risk-education

[Justin K.]

Hello all -
I am new to the community and seeking counsel.

Long story short, I am an architect with a little construction background who happens to have an entrepreneurial spirit. Professionally and personally, I value discernment, discipline, and hard work- and from the service side of this business I cannot foresee handling the risk that would make my skill set feel like it's being challenged any time in the immediate future.
As I entertain the idea of continued education in real estate development I wanted to approach you to inquire the perceived value of a background in architecture within the field. Simply put, what level of credibility do Architects operate with within the real estate field?

My ultimate goal from where I am sitting today, would be to develop properties as an architect, acting as owner, contractor, and designer. (I'm assuming partnerships would be necessary early on as I am not joining the game with a great deal of capital)

I understand the subject matter is broad, however I DO know that I know nothing, and am glad to receive any advice that would awaken me to the realities of the profession.

Thanks!

[John Blackman]

Architects are in a unique position to save some costs if they are in the development game. We hire architects for all of our projects. Construction can be a bit daunting to get into for the first time because there is so much to know and so many ways to make a mistake. Knowing the process with your local government in regards to permits is also key.

I'd start by networking in the local builder/developer community and hook up with a builder. Builders and architects don't always get along, but you're going to need each other. For your first one, let someone else build it and track what happens. Track all of the expenses and in what order they are done. Get copies of everything and you will be able to piece together the puzzle of new construction in your area.

The key things to watch out for are the following:

1) Insurance and liability
Make sure you get a good builder's risk policy. Know your liability for workers on the site. Talk to a professional about your obligations in your state. When you sell the house, someone has to be listed as the builder. That person has the lions share of the liability or at least should.

2) Surveys - make sure you can fit what you want. Lot slopes and trees can mess up your day as well as soil quality and proximity to waterways.

3) Permits and what order those permits are required

4) Budgets - the more accurate you can be before you spend, the less hair you will pull out.

5) Financing schedule - getting the money isn't so hard as spending it properly. You can starve your pipeline if you spend wrong. Make a schedule otherwise you will end up bringing more cash to the table to keep things moving.

6) Process - making sure you schedule contractors at the right time so they are efficient will save time and money. A good builder can help you here.

This is a very abbreviated list, but if you hit the above hard it should start uncovering the nuances required to do a full build project.

Get a good local mentor and work with an experienced builder on your first few. I have a feeling that as an architect you may want to build stuff that you like. Keep the market in mind. If I built what my architects wanted to build, I would break even because they all want to build palaces in markets that won't support what they are designing. So design for the market or you may find yourself with the most expensive house in the neighborhood which is just harder to sell.