All Forum Posts by: John Blackman

It really depends on what your long term goals are.  A quick buck is safer and may be financially more wise in the short run.  However, if you are looking to getting into development, you are going to have to cut your teeth eventually.  As a new developer, it is likely that you will pay some dumb tax.

I would highly recommend partnering with an experienced developer that has built homes in that area on your first go around.  Going solo even well researched is very risky.  Consider your first project a learning experience.  You might make some money, but better still you will learn the trade and how to build again even better or possibly on your own without training wheels.

Those are all terrific suggestions @Lynn Currie

You really have to get to the point where you can spend your time on high order operations.  I will second the decision to hire a book keeper first.  That takes a huge amount of time, and I went through 10 or more book keepers before I found one that worked for us.  It is critical to find someone competent.  Cheaper is not necessarily better here.  All of the inexpensive ones were terrible in my experience.  Some of the expensive ones were bad too.  I tried to outsource this to a remote book keeper, but have found that having one local has worked the best.  We meet for less than 1 hour a week and she does the rest on her own time.

Always be thinking about moving up the stack.  If you are spending a lot of time managing projects, you can hire a manager to do that.  You just have to consider how many projects it would take to make that fee worth it.  There is usually a volume gap where not enough projects means you are going to lose money on the head, but if you have enough and they are competent, it will give you a return on your hiring investment.

Everything that is in that gap, you have to do yourself until you can scale to the point where the volume makes it worth it.  Some businesses are more bold and will hire the head anticipating growth which means running with a loss or some debt, but if you don't grow that is going to eat away at you.

The One Thing - This book I found very enlightening and great for creating focus and effectiveness.  It's a short read and one of the BP favorites.

I also abhor paper.  As soon as I see any, it's scan and recycle.  Get rid of it.  Immortalize it in dropbox and be done with it.

@Karen Margrave In Austin, they call it the 'modern barn' style.  Sliding barn doors on rails are a very popular addition to the look for the master bedroom.

For the second property you mention. you should check the FAR on it.  If it is a big house, it may have already exceeded the 40% floor to area ratio for the lot thus preventing you from building anything else.

You can also go down to the permit office on Barton Springs road, second floor and ask them in person.  Be prepared to wait, but you can get an education there.

If the building was constructed before 2002 then it is grandfathered in.  The obvious reason for that design is to make it suitable for student housing.  So purchasing it shouldn't be a problem in that sense of it.  If you wanted to tear it down and rebuild something new, it would have to conform to the zoning regulations.  I sounds like that is zoned SF-3 which allows single family or duplex residences. 

Our team builds plenty of duplexes on SF-3 lots, but none of them have more than 3 bedrooms per unit, per the code you specified.

You could attempt to rezone the property, but that is fraught with much peril.  There is plenty of money to be made rezoning, but you will spend I would estimate 12-18 months fighting that fight with the city of Austin with no guarantee of success.

You will need an architect to do a site plan.  Roads, utilities, easements, access, fire truck turn-around space, setbacks, and trees to name a few will impact where you can build.  A good commercial architect or residential one that is used to multi-family can do an assessment for you.  Keep in mind that is likely going to be a sunk cost if it doesn't work out.

This looks similar to a lot of the moderns that are going up in Austin.  Dark floors, white walls, rectangular tile, they're proven winners.  The final product looks great and your numbers are very similar to the market here in Austin too.

The online version is really agnostic to your type of business.  It's all about how detailed you want to make your chart of accounts.  That is the Rosetta stone to anyone's books.  If you craft your chart of accounts carefully, any of them will work.  It then becomes simply what you prefer.

QB is well known, lots of accountants are already familiar with it.  But the UI is terrible.  It feels 20 years old.  The desktop version you have to replicate across multiple devices.  The online version is nice, but they change it a lot which can impact your biz.

Xero is primarily online.  It may have a desktop version but I have only used the online version.  The UI is great, feels new, and reconciling your accounts is very easy in my experience.  It's also online, so you don't need to pass around accountant copies, you just give your accountant a read-only login and they can see your books and reports real time.

Each solution has its pros and cons.  I prefer xero, but there are plenty of folks who will like QB for their own reasons.  Familiarity is also something to consider.  Learning new software is work.

@Lucky Oldham

 You are in for a ride.  I remember my first build.  I was such a pain in the #@%& to my builder, but that's ok.  The key is to make a good budget.  Get *everything* on there and get pricing established early.  Most builders are cost plus meaning they tack on a percentage based on the cost of materials.  I don't like this because it means I am paying more just because I chose nicer paint or fancier equipment that takes the same effort to manage.  So I prefer to do a fixed price contract that details out finishes or a fixed management fee attached to a budget.

Invite me as a colleague and I will share my building budgets with you that you can use as a template.  Construction costs in MA are going to be different than they are here in TX but you should get an idea for the categories you will need to consider.  You can also check out my new home build thread where I cataloged the process from beginning to end here on BP:

http://www.biggerpockets.com/forums/44/topics/1362...

Some things to consider:

1) Make sure you get builder's risk insurance to cover the cost of the building during construction in case of fire/loss etc.

2) Make sure your GC is insured and his subs are insured.  Your contract with him should place all of the liability on him. 

3) Get very crisp on the budget.  Add 10% contingency and try not to spend it.  Things come up though, so you are likely going to have some unexpected surprises.

4) Plan out your carry costs as part of your budget.

5) Make a schedule.  This is probably going to be the most challenging to hit.  One off builders don't usually have a pipeline process and will tend to move slower than a production builder, but you kind of have to live with it until you can scale.

6) Don't build the fanciest house in the neighborhood.  You will be tempted to put extra nice features into the house.  Don't.  Build for your market.  Spend what you need to sell in your market, maybe a few extras but don't get carried away.

Try xero.com.  I like it better than QB online and the experience is comparable and inexpensive.