All Forum Posts by: David Fenster

@Shira Laux Definitely do your zone check first, then do a dep dive into the zoning ordinance for allowable height, stories, density, lot coverage, etc. Your drafter may draw something for you - but unless they're skilled at the nuances of the code that doesn't mean they're knowledgeable about what is allowed. Single Family, R2, and Rm (multifamily) lots are all differently located and have different allowables, are not always in the same area or side by side, and vary from county or city. In addition, 5,300 sf is small and can be tough to get a duplex + parking+ setbacks, etc. all to work out.

First figure out the maximum you can actually get to work based on the code, then decide from there what works for your budget and desires.

There are many options out there when it comes to building materials. We find the default to wood is simply choosing the approach that best suits available labor force. 

We've designed with shipping containers, mass timber, metal, concrete, wood, and prefab. The best scenario is when you can strategize on paper prior to getting to the building stage, but if you're already there pausing (briefly) can be beneficial to see if there are options available to help reign in costs.

@Jessica Piff
Just as an FYI, most (and best to call the local Planning Department to confirm) jurisdictions do not rescind an existing zone application if the work being performed is generally minimal (ie, not adding or removing "conditioned" space).

Basically, the existing zoning remains so long as the existing buildings are not torn down.

I agree with @James Story on this one. While construction costs are high, ultimately if you can build for less than you would buy a similar product you'll be slightly ahead of the game, and as both tenant and landlord, you stand to gain on many fronts - both short and long term. We've designed buildings using a myriad of different construction approaches, from shipping containers to concrete, wood frame, steel, etc. Maybe see if you can get some feedback on different construction approaches to help get the costs in line with wat works for you - but make sure you work through an entire project budget including all the costs of development versus just the hard construction. It's not an easy process, but with the right team you can make a complex process not turn complicated and be really satisfied with both the journey and results.

Hi @Annie Bass

Maybe reach out to a local architecture firm or contact the local Planning Department. Generally speaking, it can be a time consuming and expensive process, depending on where it is located. Cities determine the zone for properties based on long term strategies, tax base, transportation, density, etc. - and so changing the zoning of a property from Commercial to residential doesn't generally result in a lot of success. Sometimes you can get single family to multifamily (or R-1 to R-2) but commercial to residential is much more difficult.

Cameron is largely correct. The commercial lending to an LLC is more difficult, though I would slightly disagree on the financial protection. No amount of money is good money to put at risk, and so with an LLC you are protecting your personal finances against possible harm. Now, everyone hopes it never happens, but just like insurance we do things to protect against possible unfortunate situations.

Keep digging into the LLC, and speak with your CPA as well. As close as you are to the friendly State of Delaware, you may want to look into that. Circling back to Cameron's point though - there may be many banks that choose not to lend to a newly formed LLC. We had a tough road of it at the beginning as well and needed to start first deals with personal loans.

We've looked at situations like this in the past - and the advice I had gotten from a long time developer was simple and straightforward (and seemed the most fair as well). Firstly, if you can all agree that there is a deal that can be made - that's the first and most important part. Secondly, to find a fair and equitable price, agree to either split the cost (or you pay) for an appraisal to be done. Then you're both starting from an objective versus a subjective point and you can negotiate up and down from there. So long as that first step is made in good faith understanding both parties want an equitable result, a solution and final price can typically be found.

Siply put, well done. Congratulations on your current and what I'm sure will be continued success!

Location is critical to any investment, and commercial even more so. The 2 acre parcel could be really hard to unload if it sits awkwardly in relationship to the adjacent streets and/or access is difficult. I would suggest analyzing how the deal works for you to sell the 5 acres at one price that puts a higher value on the 3 acres and a lower value on the 2 acres, or selling the 3 acres at an even higher value and knowing you may be sitting on the 2 acres for a long time to come. If it's 5 acres though, what is keeping someone from utilizing all 5 to it's greatest potential? How can you turn the 2 acres that seems not as ideal to your potential buyer into a plus somehow?

Hi  @Wendy Boone 

We've been working on a large variety of different multi-family approaches over the last year, ranging from 4 units to 150 units. With the cost of construction rising so rapidly, we're trying to create really streamlined and efficient plans that also create great spaces for people and can be built quicker or less costly.

We're down in San Jose, but do work all over the country (and globe), and were speaking with a group in Newport, OR just the other day about a 5-6 unit development.

Please feel free to DM me if you'd like to chat about it. If simply some advice would be helpful, we're happy to guide as well.

Generally speaking, I'd stay away from stock plans as it's rare they work for every situation and the headache you'll go through trying to adapt it to your situation - it would have been better to start from scratch with something specifically designed for your location, zoning requirements, aesthetics, needs, and budget.