All Forum Posts by: Henry Clark

I like your project.  But normally people with a title like yours are referencing low income housing which there are many options already.  For starter homes and downsizing you’re probably in the right buyer box, just need to add entertainment and commute options.  Great thing about BP is lots of options and opinions.   But it’s your money. You’re always right.  

Quote from @Don Konipol:

Quote from @Henry Clark:

Hello Malta BPers. Visiting over Xmas with family. Let me know if you're up for some seafood. You drive and I'll buy. Would love to talk REI mainly commercial an industrial.

Henry, you’re a REAL real estate guy - we can’t just take a vacation - we HAVE to still think real estate! 

No takers but still great meal for my birthday.

 Next time I’m in Houston will see if you’re up for Cadillac Bar and Grill if it’s still there. Haven’t had fajitas in a while. 

@James Hamling

Happen to be doing a lot of travel in Europe the last 3 years.  My son is based in Sicily, brother near Lucca, Italy; trips to France, Spain, Germany, Hungary, Austria, others.  

Currently meeting family in Malta for Xmas.  

Not an all encompassing answer to your Europe vs US housing question.  

1.  Germany where my wife is from.  They just kept adding an extra house unit to the end of the building. 

2.  Old towns and cities have narrow roads and streets due to horse drawn carts.  Also to reduce sun from heating buildings and for shade.  This restricted traffic forcing MFH in town.

3.  Spain where we were at you couldn’t build out in the country side unless you owned a lot of ground.  Prevent urban sprawl from taking limited farm ground.  

4.  Europe got blown up twice.  Easier to add mass transit.

5.  They moved to mass transit.

US has far more ground per capita.  Cost less to do urban sprawl than high rise.  Plus the US is based on forty acres and a mule approach to growth.  The auto is a given right in the U.S.  .   

Basically if we followed part of the European model. 

 No more urban sprawl thru zoning.  

Heavy investment in mass transit.  

Tax autos out of existence. 

Do away with parking in town. Europe did this out of necessity versus planned.  

Personally for 90% of the people their personal residence is their best real estate investment.  

1.  Most people live pay check to paycheck.  They “live” and need a place to stay thus that cost is better to pay down principal in a house than rent.  So they are ahead of professional investors.

2.  Your house is normally protected during bankruptcy versus commercial investors.

3.  Downpayment say 10% for personal residence versus 25% for commercial.  More leverage is better.  Plus takes less time to save the downpayment.  Longer time in market.

4.  Better Longterm tenant (you) and no rehabs every two years.  

5.  No collection issues.  (You)

6.  Inflation is your friend.  Your home will increase in value while your debt will decrease in adjusted value.  

7.  No property management needed.  Lower cost to operate.  

8.  Although you can 1031 a commercial property.  $250k per spouse tax avoidance if you sell your primary.  Then buy another and do it all over again.  

9.  You might sell our rental property but less chance you sell your house.  Especially if your pay check to paycheck.  

10.  Join the military. They give you tax free money you can invest and never have to payback.

I might not be as smart as those higher level investors but the majority of citizens aren’t either.  Which makes owning a personal residence the greatest investment out there for the majority of first time investors.  

Quote from @Devin James:

Quote from @Dennis Bragg:

Quote from @Devin James:

Quote from @Dennis Bragg:

Quote from @Devin James:

Quote from @Dennis Bragg:

Hey @Devin James

Your thoughts on affordability and density resonate with me. I’ve seen developers in Phoenix transform underused lots into thriving micro-communitie. One developer I worked with built smaller homes around a central courtyard, and buyers appreciated the balance of affordability and community.

In San Diego, where I’m based, density has taken a different shape...like ADUs (Accessory Dwelling Units) that maximize land value. I read something recently in The Economist about how smaller units increase land efficiency.

Have you explored micro-communities or shared amenity setups in Orlando? I’m curious how those resonate with buyers there.

My first home here in Orlando had an ADU. Great use of space and provides additional income to offset the monthly payment.

Orlando, and many other cities, have a "missing middle" problem in regards to housing. 

Municipalities either want Class A multifamily, or 2000+ sqft homes on .25 acre lots. 

There's a huge demand for Townhomes, Duplexes, Triplexes, Quads, and smaller multi's.

I love cities who can implement those micro communities. I can see the vision but they are not yet put to use here in Orlando.

It's great to hear your first home had an ADU...those are game-changrs for both space efficiency and offsetting costs. You're spot-on about the "missing middle." I've seen this issue in San Diego, where a friend of mine worked with a city planner to rezone a lot for duplexes and triplexes. They framed it as a way to provide workforce housing, and the project not only sold out but became a model for similar developments.

I read a piece in Forbes recently about how smaller multi-units are reshaping urban housing. In Omaha, smaller multi-unit builds with shared amenities like co-working spaces are cacthing on. People appreciate the balance of affordability and livability.

What’s been the biggest hurdle for Orlando in pushing these types of projects forward? Zoning issues? Or are developrs hesitant to take the leap?

Love to hear it!

Mostly zoning issues. 

Specifically for us, we focus on the outskirts of Orlando. Many of our developments are turning unprofitable citrus groves into SFH's.

I do think there's a trend towards BTR (Horizontal Apartments). Here's a project we sold to Taylor Morrison that will have this new type of housing. Super cool apartment style living, but all one story.

Repurposing citrus groves into SFHs is a smart move...turning underused land into vibrannt communities. I’m also a big fan BTR developments, especially horizontal apartments. They offer renters a unique option that feels like home but without the long-term commitment.

A developer friend of mine in San Diego recently completed a BTR project on a former industrial site. I saw a report in Forbes about how BTR developments are shaping suburban rental markets. The concept of single-story units with private patios caught on quickly, especially among young families and empty nesters.

Do you think these horizontal apartments in Orlando could help bridge the gap for middle-income renters? Or are they more likely to appeal to renters in the higher-income bracket?

100%!!

Im a huge fan of them

I think both - they will bridge the gap with middle-income renters and also appeal to the higher-income bracket. As you said, younger crowd & empty nesters

So you’re talking apartment units and condos.  There is nothing new there.  

Plus building in the middle of an old orange grove isn’t the way I would go if I was wanting to address that economic group.  I would knock down an old building structure in or off downtown.  Closer to entertainment district, services and mass transit.  

Someone mentioned Omaha above.  They knocked down the warehouse district near downtown and built condos.  Big entertainment area.  Just north of town 10 blocks they built about 100 mini houses about 300 square feet.  Waving normal setbacks.   Target low income and transient groups.  

 About 30 blocks west of downtown they did the Blackstone district.  Basically gentrified an old neighborhood.  

I would look at your target and identify what they want besides just the living unit.  

There have been a lot of posts about failing syndications.  Most of the ones failing have been due to lack of appropriate financing or inappropriate product mix.  I would check your market analysis.  

Quote from @Devin James:

Quote from @Henry Clark:

OP why?

Forget the politics.  If we bring in 20mm people with no money they take up all of the low priced housing.  This in turns hikes the price on mid size housing.      Plus it drives down wages so existing population can’t move up in housing.

Add in Airbnb and you drive up housing.

Add in tariffs for Canadian lumber 3 years ago and potential future China and Mexico tariffs.  

Don’t see cheap housing in the future.  Unless as stated above there is cheaper housing out in the country side.  But most ethnic groups always start in large cities.  

My family with 3 young kids on an E8 wages started in a trailer and apartments.  Later the American dream 40 acres and a large house.  Opened a trailer park next to our house for military.  

Who is your market for lower cost housing.  As a developer what plans and developments do you have in progress?  

 Hey Henry,

We've built and sold 70 homes since 2021. 

When we were first selling homes in 2021, Buyers were upgrading to larger homes since interest rates were 3ish% and they could afford the extra 300+ sqft.

Today, we see smaller homes selling significantly faster than larger homes. People can't afford the extra sqft now due to the rates. 

I understand that historically, rates are pretty average, so i dont see them coming down much.

America is significantly undersupplied in housing. So we need to build more, and if people can only afford smaller units, then we need to build smaller. BUT Building smaller doesn't work well as builders because we cant spread our costs out across larger sqft, so we need to build with a higher density. 

We have 3 active projects currently in Central FL. 1) 253 townhomes on 38 acres. 2) 135 SFH's on 48 acres 3) 153 attached SFH's on 21 net acres.

 OP it’s a Relative question for me.  

Do we need more housing.  I’m betting on it.  Doing our second subdivision.  18 lots on 75 acres.  Obviously in the other end of the spectrum than your developments.  

Who is your market?  What wage scale?  Single or family?  Section 8?  Square footage?  What market, Orlando or Glenwood, Iowa?  

20mm people in the last 3 to 5 years with no cash or social programs found a place to live.  Made that up, no data source.  Is this the market?  Or the market just above them?  

There are 76 mm baby boomers about to leave say 30mm homes in the next 10 to 20 years.

In Orlando do your employees or sub contractor employees lowest wage get paid $40 per hour or around $90k for a single person?  
.    
A sawmill is closing down in Montana because its workers can’t live anywhere near.  All $1mm units being built.  Town won’t allow smaller lower cost zoning.  

My point is define Relatively what circumstances are you inferring?  

We are building a house for one of our workers.  $5,000 to hook up water and electric.  About 100 yard pull from street.  Septic system about $1,000 we will build.

House is 30x40 with 10x30 of that as an open porch.  Concrete pad and cinder block walls. Metal trusses and roof.  Budgeted for $25,000.  

No closets.  Open floor.  Another $5,000 for electrical and plumbing.  

No architect drawings, no permit fees.  Add another $5,000 for labor.  $3.00 per hour.

So you can build low cost housing even if you use higher labor rate.

Kids on Xmas break working to build the house for their grandfather. Also helps them to pay for their school uniforms, books, lunches and school fees.  

OP why?

Forget the politics.  If we bring in 20mm people with no money they take up all of the low priced housing.  This in turns hikes the price on mid size housing.      Plus it drives down wages so existing population can’t move up in housing.

Add in Airbnb and you drive up housing.

Add in tariffs for Canadian lumber 3 years ago and potential future China and Mexico tariffs.  

Don’t see cheap housing in the future.  Unless as stated above there is cheaper housing out in the country side.  But most ethnic groups always start in large cities.  

My family with 3 young kids on an E8 wages started in a trailer and apartments.  Later the American dream 40 acres and a large house.  Opened a trailer park next to our house for military.  

Who is your market for lower cost housing.  As a developer what plans and developments do you have in progress?  

Hello Malta BPers. Visiting over Xmas with family. Let me know if you're up for some seafood. You drive and I'll buy. Would love to talk REI mainly commercial an industrial.

OP do you do the bookkeeping or the accountant?  Do you turn in clean PLs on each property?  Same for fixed assets.  

Does your CPA want to get rid of you?  Most service or trades people us included increase the rates for customers we don’t want.  

Hopefully you’re a great client.