Skip to content
×
PRO
Pro Members Get Full Access!
Get off the sidelines and take action in real estate investing with BiggerPockets Pro. Our comprehensive suite of tools and resources minimize mistakes, support informed decisions, and propel you to success.
Advanced networking features
Market and Deal Finder tools
Property analysis calculators
Landlord Command Center
$0
TODAY
$69.00/month when billed monthly.
$32.50/month when billed annually.
7 day free trial. Cancel anytime
Already a Pro Member? Sign in here
Pick markets, find deals, analyze and manage properties. Try BiggerPockets PRO.
x
All Forum Categories
All Forum Categories
Followed Discussions
Followed Categories
Followed People
Followed Locations
Market News & Data
General Info
Real Estate Strategies
Landlording & Rental Properties
Real Estate Professionals
Financial, Tax, & Legal
Real Estate Classifieds
Reviews & Feedback

All Forum Posts by: Brian Falcon

Brian Falcon has started 9 posts and replied 22 times.

Hi Neal - that's great to hear!  What types of things are you including in your projects?  

I'm not sure which forum to post this in, so I'll give it a shot here.  I'm an architect and have a small construction business with a partner (another architect).  We only design/build Zero Energy Ready and Zero Energy homes with this company.  Currently we have 5-6 homes either on the boards (design) or in construction.  We would like to venture into developing our own projects and either selling or renting them once complete.  Project size could vary between single family, townhome/multi-family or even small neighborhoods (under 20 homes to start).  We have all the tools and talent between us for the design and construction scopes, including dealing with municipalities and working with civil, structural and MEP engineers, as that's part of our full time work. 

However we are not familiar with the process of seeking and securing funding for new construction/development work.  Does anyone have some good resources (books, webinars, websites, etc.) on how to work the front end of this type of proposed project and putting together a compelling proforma for potential funding sources (and even how to locate reputable sources to partner with)?  I will be reaching out to some developer colleagues to ask the same questions but thought some fellow BP folks may have some guidance here.  Thanks for any input, I appreciate it.

Quote from @Jesse Holsapple:

Hey Brian, seems like a solid strategy and a straight forward ground up construction loan. Would be happy to assist. 


Thanks Jesse.  I'll keep you posted.  Thinking probably in about a year we will have some funds to get started and look for investor backing.  Let's keep in tough in the meantime.
Quote from @Khemraj Sarju Jr.:

Good morning, we can assist and help in regards to financing for your ground up construction build out. We can work the purchase of land and the construction costs into one loan for you. Happy to connect at any time for more information. 


Thanks for your feedback!  Let's keep in touch - I think most likely next summer/fall we will have some profit funds from three active construction projects (and 3 starting in spring).  Thanks again!
Quote from @Bruce Woodruff:

I have always found that the best results come from a mixture of technologies and products. For instance, the most clean and sensible energy design would include solar, electricity and gas. We produce insanely clean Natural Gas nowadays. And we should not judge the fiscal efficiency of a system based on tax consequences...it is either cost efficient or it isn't.

And then there is the issues with having a super tight envelope too (overall health problems)

But things like LED have moved us a long way that's for sure...


Bruce, I like your thinking!  Regarding tight envelope - you need to add continuous ventilation on homes this tight (to your previous point - another added cost), but it improves air quality and controls the flow of air into ant out of a home.  We use only Zehnder ERVs on our homes.  They are not cheap but are awesome.  IF you do a lot of builds, you might check them out.  The new IECC actually requires them, but most municipalities don't enforce the requirement (same as duct leakage and blower door tests).  Like I said, it might be a ways off but eventually all this stuff will be codified so the sooner you get up to speed on it, the sooner you'll have a competitive advantage.  Do you have a website for your construction?  I'd like to check it out!
Quote from @Bruce Woodruff:

When I did high-end building, I would do the occasional 'Green' project, including LEEDs, all the way to full Off-Grid.

My thoughts - 1) It is a really expensive way to build. REALLY. Especially to do it right and get Leeds Certification. 2) A lot of the building techniques, products and practices are not practical, they are just there to be cool and groovy. 3) To run a house with solar requires a huge system, plus battery back-up, once again terribly expensive with a long payback that limits it to the wealthy.

Not saying that there are not positives to the whole concept, of course there are, but it is just not viable, may never be, because unfortunately, money is the driver as always. Unless people want Govt control of building and super high taxes to finance this, then it is going to stay a playground for the entitled, more or less.

Having said that, of course it would just simply be smart of consumers to want their homes to be as efficient (cheap to operate) as possible. And I think we do a pretty good job of that already.

Just my .02

Unfortunately it sounds like your experience was with a team that did not prioritize using the integrated design approach to seek out maximum benefit to each strategy used (stacking functions, synergistic benefits).  So you are absolutely correct - that approach is a disaster and can end up costing much, much more and turn people off.  Also, the market is ever-changing, so doing a LEED (no s) project 10 years ago could have more of a per/SF cost premium that in today's market.  No VOC paints were very expensive back then - today they are cost comparable to any other quality paint.  

Regarding solar - yes, still very costly, especially if including battery backup.  I am actually in the process of adding that to my house as we speak.  Although the overall cost is high, when you compare dollars - from a monthly expense, we are a wash with what my electric cost is (fully electric home). There are also tax benefits and SRECs you can use from that system.  The bigger picture with any energy source is to minimize the need for it from the outset.  So, super tight envelope, added insulation, high performance appliances (as budget allows), LED lighting...  all reduce overall demand.  My home is 3,100 sf and we have one mini split (ducted) for the whole house.  For what it's worth, there is also a report from LBNL that has found that homes with solar add $3/watt produced of value to homes.  Not sure how they came up with that, but take it for what it's worth.  
Quote from @Matthew Niemynski:

This is really interesting, would love to learn more about this. I wonder how the materials you mentioned affects costs. Would a more environmental approach to a new build/flip be more costly so developers and flippers sway away from this? Would developers/investors get some sort of tax advantages of using these materials? In my opinion, if there was some sort of advantage in using eco friendly materials, solar etc. it would be used more freely  and become a normal practice. 

Hi Matt,

All very good questions you raise.  When I design or build for clients, I spend a good amount of time discussing the concept of costs and how often times a low first cost does not translate to overall value and can lead to added costs down the road.  The key to incorporating any sustainable approach into a project cost effectively is looking at things holistically to find ways to balance costs with performance.  For example, going with a triple glazed, high performance window would be a significant add to the budget, but that would result in a reduction in mechanical system size (and cost).  Also note that smaller, high performance HVAC systems run less frequently and have a longer lifespan (adding to long term value).  Higher quality windows can also increase the lifespan of interior finishes by minimizing fading, etc.  They are also more air-tight, eliminating drafts, cold spots and heating/cooling loss in a home over time.  Related to tax incentives, there are many out there, especially with the new legislation that has been passed.  At some point this stuff will all be part of the code so there won't be any premium to doing so but for now, if you're speaking with folks with strictly a first cost approach, it often gets pushed aside.  
Quote from @Joan Gregerson:

Lots of videos about this on my YouTube channel, Denver Green Living


Thanks Joan!  I will check this out for sure!
Quote from @Shiela R.:

HI @Brian Falcon,  Yes!  With your background, you might appreciate the City of Boulder's Energy Conservation Code...

Happy Investing :)


Hi Shiela,

Thanks for sending that link!  It's great to see municipalities take a lead on this stuff.  They fight it tooth and nail on the east coast.  With our construction entity, we only do Net Zero Energy Ready (DOE Program) or Net Zero.  The demand is starting to really become evident by folks reaching out to us for new homes.  I'm still completely baffled by the fact that almost nobody is doing this near us.  It's just best practice and common sense to us.  

Brian
Quote from @Greg R.:

Brian, I'm not quite sure what exactly you're trying to accomplish? Are you wanting to evaluate your deal based on the purchase price in 04? Are you looking for COC, CAP, etc.?

Thanks for responding.  I just want to get used to using the analysis tools on BP, and see what the end results look like.  I figured since I have a property that we just decided to keep based on our current equity and rent rates, I should probably do real analysis to see what numbers actually are.  That way I get some practice for when I'm actually analyzing potential properties in the future.  I know it's a completely backwards exercise but still wanted to do it to see what the numbers look like.