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Updated about 5 years ago, 10/15/2019
First Post: Architect --> Real Estate Investor
Hi everyone!
Long-time reader/listener, first post.
I am an architect in St. Louis, Missouri making my transition from the design professions to real estate investor and developer. After spending many years creating value for clients, its time to do it for my benefit.
Last year my wife and I purchased a duplex and are now living in one unit and renting the other. We did a light renovation on both units, and the renters take care of the majority of the mortgage. Its should cash-flow nicely when we move out. We are currently looking for our next project — ideally, a ground-up multi-family project where I can leverage my design expertise as an investment.
Anyhow, I'm excited to engage more in the online and offline community, especially here in St. Louis. I'm also curious if there are any other architects on the site working similarly.
Aaron
@Aaron Schump
Not an architect. But in the exact spot. Living in one side of a duplex, looking for the next purchase.
Soon to be architect (currently studying for ARE's). I'm a little behind you @Aaron Schump. My wife and I plan on purchasing investment properties in the future using the BRRRR method and eventually move up into new development/redevelopment of larger multi-family. (Or at least that's the goal)
@Aaron Schump I am kinda in the same spot. I am an Architect in Utah that also does development work. Most of my income still comes from my work as an Architect, but do a development project every year or so as I find the right property to do something cool on. One of the hardest things about doing the first development process is dialing back the amount of cool you have in your brain. I would recommend having some sort of partner that is looking at the process from a different background for your first ground up project.
Patrick, Edgar, and Jarod. Thanks for reaching out!
@Patrick Queensen we are in Tower Grove South, where are you living/investing? We picked up a building on Morganford a few months back. It's currently 2 residential units but we will begin renovations of the ground floor this week. We are converting it back to commercial space for the architecture office.
@Edgar Martinez, best of luck on those ARE's. It's quite a trail.
@Jarod Hall, nice work on the website! Which projects did you do for yourself? perhaps the Guadalupe Condos?
The design/cost dilemma is going to be difficult for any of us, but a great design is how we can increase the value of our projects.
@Aaron Schump
Welcome Aaron! I am an architect and on my second house hack. I gut renovated the second one and we will be doing a BRRR to acquire the next one.
It’s been a real game changer for my husband and I.
I actually love my job as an architect even more now, and being an architect is such an asset to bring to REI
- Architect
- Westchester County, NY
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@Aaron Schump Another architect here. I purchased an estate sale SFH for my family. Finishing up the reno this year and will utilize the equity to get an investment property hopefully in 2020.
All the best @Edgar Martinez. As I've said to many, get it done ASAP. Life happens and delays things.
I agree soo much @Mala S., we bring a lot to the table in REI as architects.
- Jared W Smith
@Aaron Schump yeah the guadalupe condos was my first and now I am the owner on the axioms townhomes that is still working its way through the planning process.
@Jarod Hall Very nice projects! I'm curious if your willing to share the financing plan. For instance, did you take a fee for the desing on the front end or differ as capital toward the projects.
Hey Aaron, another Aaron and architect here. I'm looking to do something similar to what you did but in NYC. Good luck! I'll be following your posts.
Good for you! I'm an engineer that also worked in the A/E field for a bit and then made my way into being an investor/developer, as well. It's great professional experience that translates very, very nicely into what you're now doing.
Let me know if you need anything or have any questions, Aaron.
@Aaron Schump Yeah I am super open about everything. So my firm did get a fee. But the fee was deferred until the project sold. So in the final payment stack the architecture fee, contractor fee, and seller real estate commissions (one for each of the three partners in the project) were just above the profit split to get paid out. So it acted like equity, but also acted like the architect was behaving like an architect (my liability insurance wanted there to be a normal arch fee and a owner architect contract)
So for us repayment it went like this
1st primary construction loan. We used hard money.
2nd the cash the partners had brought into the deal. Each of us had different amounts
3rd professional fees of each of the three partners
4th threeway profit split.
Does that answer everything. Let me know what else you have questions on.
@Jarod Hall Thanks, Jarod. That is great information. On our first little house hack, we just did with an FHA loan. I'm trying to get my head around a ground-up project. It's going to have to be a bit more complex than an FHA.
