All Forum Posts by: George Yu

@Malcolm Jarrell looks like your going to have to raise capital. Usually if the deal is good its not hard to find someone to lend money. There are lots of investors in your local area you can go to REIA meetings or try to see some investors on BP. Money is always the problem starting out. Everyone will need to figure that out on their own.

@Ricardo Kreyhsig they way I did it was to find someone already doing it and provide some relational capital with the pre intention to be active. I wanted to learn. You could also go the the permit office and ask to see who has pulled permits in the last 90 days or ask them who are the local developers. Then call them and see how to help you develop what you want or see if there is a partnership.

@Hedi B. thank you! hard to tell for this one since we haven't gotten through our first month so not all bills have come in. but we projected no less than $10,000/month. 

said it somewhere but 14 months

Survey, topo, utilities, sewer verification, flood plain, zoning, variance, etc

@Josh Rowley congrats on the build! That was more of a heart decision with us partners. We could easily not include the utilities and we would be fine. We believe that is where the future of affordable housing should go. One bill each month because people are busy. No need to have multiple to keep track of. Plus it places pressure on us as developers to build them more efficiently which is something all three of us are passionate about. Passive house standards, solar, geothermal, wind etc. We just want to push the envelope. We are experimental and its what makes every build exciting. We add new materials, processes, tech and it keeps getting better. 

@Minna Hu great questions! The most challenging is a combination of finding suitable land to build on with our strict criteria. Combined with working with cities. City officials are sometimes like a high school clique in these small towns that we go to and its tough to know if they will help you or not. We have gone to cities where they didn't seem that interested and then rolled out the red carpet once we moved further along. There are other cities that we went to that loved the project from the beginning but refuse to offer any support in terms of getting the deal done. One city wanted us to spend 500k to improve existing city infrastructure which was clearly the city's job. They think that developers are set to make a ton of money so they sometimes try to push responsibility off. 

Top three mistakes: Not negotiating the utility rates with the city before starting. Pre leasing the units too early and the move in date was pushed back about 45 days because developer went over scheulde. Not building more units! 

Sprinkler system greatly reduced insurance for us

hire an exterior designer to help with paint choices. I picked the colors and they didn't turn out like i thought it would to save couple thousand $$. 

change design to decrease cost and increase efficiency.

@Gary B. yes land we purchased and that counted towards our 20%. we projected the total buildout cost to be around 1.5 million and they wanted us to essentially put down 300k or 20% just like a mortgage

@Gary B.thanks! construction loan was straight forward. They wanted a PFS as well as two years tax returns. they wanted 20% down. besides impactt fees of about 75k can't think of anything else we did for the city. I would recommend going with a smaller local bank. Find out what their portfolio max is. Banks have a sweet spot for types of loans they do. If yours falls in it then your ahead. Also its all about the relationship. Know his wife name and kids. plan to work with him on more than just this one deal.

@Vaughn Smith thank you and absolutely! will be breaking ground in a couple more cities this year. Will post better pictures and take better notes 

@Shital Thakkar 

1) we bought into the land at a good cost.

2) construction loan was 1.165 at 6.25% 

3) land 40k

4) no south goeriga near florida. 

5) depends on the amount or site work needed and land cost as well as building design. There is economies of scale but not much at 32 units. 

6) needed to rezone. Entire process took 4months. Depends on if city is willing to help or not. 

@John Stewart no we went with a local bank in the city and got it. Wasn't that hard for us we had the balance sheet and relationship. We have never raised capital before. We would like to at some pointt but would like see how far we can get with just our own blancesheet. so far after this last refi we pulled out our initial 20% equity and more