All Forum Posts by: Kevin Keith Beck

Jack,

In one more year you'll be 18 and can do whatever it is you want to do.

I'm 58 now and have had a few regrets.  One of the biggest was not following my dream.  PLEASE do not let others dictate your happiness.

Follow your heart, keep your head up, and go for it.  You'll be sorry if you don't and may even resent your folks later for squashing your dreams.

Good luck to you.  Be strong.

Kevin Beck

Nik,

At least you're in a different state! Lucky guy.

I have been a part of the energy efficiency community here in California as a builder and consultant for the last ten years and have raised objections in meetings with the CPUC about the feasibility of their "Big audacious goals". That's what these targets were in our minds.

But here we are, ten years later and the State has not backed down or slowed the "code train" as far as necessary energy efficiency upgrades at each code cycle revision. They are on track to reach their targets. BIG? Yes. AUDACIOUS? Certainly. But that doesn't change the reality of what's ahead for builders, developers, investors, and realtors.

I'm not sure how you flip houses up there, but here and everywhere else I have flipped homes I am absolutely trying to attract buyers who might otherwise buy a new unit. This choice happens every day to each one of us as consumers. Buy new or used? That is the question. Each of us has priorities in our buying habits, but for the most part we would generally prefer something new to something old. That's just human nature. Seasoned flippers know this and use all sorts of tricks and features to lure buyers to their side of the street.

I've spoken with many production builders of new homes during these ZNE (Zero Net Energy) meetings with the CPUC and Energy Commission and they are all concerned about the requirements ahead and how will they deal with it. Some are planning on reducing home size in an effort to offset new requirements and purchases necessary to adhere to the new code. IMO, this is a great 'nudge' to build more responsibly. McMansions are not going to save energy. Other builders will be raising prices for their units to absorb the added costs. Still others will be moving their developments farther and farther out from city centers where dirt is cheaper. This contradicts the efficiency goals whose major objective is to reduce greenhouse gas emissions. Cars (currently) are major contributors to GHGs. Perhaps, in combination with emission standards for cars escalating along with the building codes the Commission is of the belief that every home in the future will have an electric car in the driveway and polluting while commuting will be mute?

What I didn't address in my initial post was what you mentioned in your response. You mentioned it would be impossible to address existing building stock due to accessibility, etc. I wholeheartedly agree with your logic. We've expressed the ridiculousness of trying to retrofit 13 million homes in the state to the CPUC and the Energy Commission. You want a surprise? They didn't care. However, they did back down a bit. There used to be a goal (I don’t see it any longer) to mandate that all existing housing stock be retrofitted to be net-zero by 2050. I don’t see that language any longer. Probably due to so much backlash. What they have required though in the new plan is that in addition to all new commercial buildings being net-zero by 2030, 50% of the EXISTING commercial buildings in the State will have to be retrofitted to net-zero status. This is still a HUGE undertaking. Can you imagine going into any city in California and retrofitting every other skyscraper and building to be net zero?? Crazy!

Plenty of work ahead if you’re in the efficiency business I’d say.

Kevin

Tick-tock!

Are your California investments ready for the new 2020 net-zero Building Code requirements ahead?

It’s only one year away. Come January 1st, 2020 California's Building Code will MANDATE that ALL newly constructed single-family homes be net-zero (homes that are able to produce as much energy on its roof as it consumes in a year).

See: https://www.latimes.com/business/la-fi-solar-power-new-homes-20181206-story.html

As real estate investors, building/home owners, rehabbers and flippers, those who play in California will, come January 1, 2020, be competing for potential renters against much more energy efficient homes, “Super-homes”!

Biggerpockets Flippers know that in order to compete, we must remodel our homes as good and or better than the new home development across the street in order to achieve top dollar. Historically, we just had to use the same color palette, the same carpet, the same tile, the same appliances, etc., etc. If a potential home buyer or renter could get the same features as a new home for less money, most would. That’s the beauty of our business. By finding deals and adding value we can theoretically compete against new homes.

Now, us flippers will have to make a choice. If you are a flipper and your competition is a newly constructed home, you will at some point have to make changes to the stuff that’s “behind the walls” (adding more insulation, energy storage, pipe insulation, HERS ratings, equipment and appliance change-outs, etc.), stuff that we could never capture a good return on the investment for. How do you sell better insulation?

For newly constructed homes to be able to pass the upcoming 2020 Building Codes here in California, builders will be making the house itself differently than it has in the past. Some of these new construction changes will include: requirements for beefier 2x6 walls that are thicker to provide more insulation depth, installing more attic insulation, installing tighter and more efficient HVAC systems and water heating equipment that may need to be certified by third-party Inspectors for compliance. In addition to all these features that the buyer may never see, they are also going to get enough solar PV panels on the roof so that they’ll have NO ENERGY BILL every single year! Not just a few panels, but enough panels to offset ALL their home’s electrical energy needs.

How is your property going to compete with that?? I can tell you as an Energy Consultant, you don’t have enough roof space to simply add PV panels and achieve net-zero. You are going to have to make lots of changes to lots of different areas to be able to make the PV production work and be compliant.

Take a look at your own inventory. How old is it? How much roof space is there to install PV? Can you increase the wall/attic insulation values? Can you change all the HVAC and water heating equipment? Will your rehab math still work if now you’ll have to add solar PV to all your flips? If your investments are older than 1980, you’re going to have huge upgrade projects ahead if you want to compete against the new home offerings across the street.

For large multi-family property investors, you have a little more time. By 2030 ALL existing commercial buildings will be required to be net-zero. These retrofit projects will be BIG.

I wanted to bring this up to the Biggerpockets community because I want us all to succeed and not be blindsided when these requirements affect our livelihoods.

These changes are not impossible but will take careful planning and consideration.

Take heed friends and be careful out there.

Kevin Beck

Hi Alissa,

I'm not sure if I can answer all your questions but am here if you need a "sounding board"?

I'm now a retired contractor looking for partners to flip in San Diego (I know, crazy huh?).  In the meantime, I am happy to offer advice and guidance based on my 30+ years as a "Green" builder and high-performance home designer.  

I'm trying to get to a point where I can build small net-zero/green communities of "mini-houses" and multi-family builds.  To get there may require other avenues of income and capital generation, but hey, if it were easy, everyone would be doing it right? 

In response to your initial question, my gut reaction would be to analyze existing home price/per sq.ft in the specific area you're contemplating. Example: say you research and find that "C-type" homes on your block of interest are going for $100 a square foot and "A-type" homes are at $300/ft. There's you're gut check math. Can you add/rebuild/repurpose the footage within those brackets and still profit. You can't change the numbers, they are what should guide us. If you overbuild (add a ADU on a house that already has 6 bedrooms) you'll have trouble selling. The trick will be to find a great deal on a property (BIG problem #1 in San Diego) that can use the ADU addition approach. You'll need to evaluate each property for potential AND know what your strategy is for providing that ADU. You gonna crane it in, build it on site, buy a package??? Many choices.

Let me know if you'd like to discuss further.

Glad to help,

Kevin

Hello Anthony,

My name is Kevin Beck. I am a retired General Contractor who is now hoping to connect with investors in my area. I'm pretty sure I can help investors flip/rehab properties by acting as their Building Consultant ("eyes in the field") and or as a Project Manager on their flips. When an investor wants a closer look at the property, they can send me out to evaluate upgrade potential, neighborhood status, and any unforeseen obstacles that may decrease profitability before pulling the trigger on the offer.

Services I may be able to provide are: Project Management, contractor liaison and quality control, construction estimating and project timeline management and control. My sub-specialties include: energy efficiency and high-performance construction design/execution and residential rehabs and remodels.

I am hoping to connect with local/active investors like yourself who can appreciate the years of experience I can bring to the table to help you efficiently and profitably flip homes. I am hungry and committed to learn the wholesale real estate business and am seeking a "partnership" where we can both benefit.

If this is of interest to you, I'd love to hear from you. If not, I appreciate your time.

Thank you very much.

Kevin Beck

Hello Mark,

I’m an old newbie.

I have bought and sold various homes throughout my life and, as a general contractor, have remodeled hundreds for others.

I am new to my area (San Diego) and currently help local estate owners deal with subcontractors, manage major rehab projects, and locate and execute capital improvements that make sense. While the work is rewarding, it is not increasing my own portfolio.

I’m 58 years old, have terrible credit and besides my consulting business, am not employed. Not seeking pity here, just explaining honestly my situation.

I am retired now and have no interest in putting my tool belt back on, but what I do know is how to build, maintain, remodel, manage, improve, and take care of homes and buildings.

I realize my market (San Diego) is too “rich” to make Cash-Flow deals work but I do see a lot of high-end flips, especially along the coast. While I may be able to provide “value” to these rehabbers, I am also interested in partnering with out of state BP members to allow me to invest my own funds to stack and grow my own portfolio.

I am reaching out to you all to get your feedback. Any assistance would be greatly appreciated.

Thank you,

Kevin Beck

Honore,

There may be need for clarity when describing some of the roles of your TEAM.

I have been a contractor and builder in both the residential sector (homes) and commercial (everything else) sectors.  Each has their own "process" and often there are BIG differences between them.  Also remember, large production builders of new homes operate quite differently then one-off new home builders.  Typically, large scale production builders are concerned with each penny saved while building a unit (home).  A local builder may take more pride in their delivery and quality because they depend upon your "praise" to stay valuable in their market.

Now let's break it down further.  I have worked for a Commercial Contractor who had multiple Project Managers who NEVER went to a site.  Their job was to interface with the on-site Project Superintendent(s) and Project Engineer(s) who sit on those ugly jobsite trailers from day one to last.

Now a small boutique builder and remodeler probably has Project Mangers either directly on site or floating from one project to another assuring progress and monitoring quality. The on-site Foreman/Lead Carpenter (toolbelt-wearing or not) would be your in-house "contractor who would be in charge of the day to day.

Of course, this would all depend upon how many projects you are trying to juggle at once.  The large Commercial Contractor I used to work for would typically have 20-30 projects running at once.  Each with their own Superintendent and Engineer with Project Managers in charge of 6-10 projects each.

If your doing one at a time and just starting, I would agree with some of the other comments, get a local (vetted) contractor to handle EACH project.  Don't spread them too thin.  They'll start "pricecreep" and schedules will be at risk. Once your dating period is over (3-6 projects) discuss other arrangements for a "partnership" where you would both benefit.

Kevin

Right On Milad!

Forward!

Kevin

Milad,

The "most feasible" question is a tough one to answer for ALL of California for multiple reasons.

Each City, Town, and Municipality will have their own “Playbook” when it comes with how they’ll deal with impending energy codes. Some will reduce or forgo building permits for ADUs while others may simply “fast track” the permit process but their fees will remain the same. The challenge to California’s Building Departments is that they have typically generated income by charging fees for various aspects of the building process from plan review to inspections for each phase of construction. These fees are usually based on the square footage as the “old” code mandated 1,000 square foot+ minimums when designing single family homes. Thus, Building Departments were assured a base fee and could extrapolate projected income. Builders and designers of high-performance structures, Passive-House certified homes, Tiny Houses, and Net Zero construction know that square footage should NOT be a factor in establishing fees for building departments. Especially in our energy saving furor here in California.

Don’t get me wrong, smaller square footage doesn’t necessarily mean more energy efficiency. I wrote an article once about Tiny Houses and the challenges they face trying to fit into a code-enforced building world. In the article I found varying opinions about a Tiny House’s energy consumption. A good friend of mine who is also a Passive House Designer (IMO the BEST constructed building shells on the planet) reminded me that there is a “sweet spot” when designing a super-efficient shell and it’s less about square footage than it is about volume. The beauty of a Passive House -Certified home is that the energy modeling is spot on. You’ll know exactly what the energy consumption is before you build and be able to “edit” the structure to get what you want. Which leads me to my next question, “what do you want to offer and for whom?”

Even if you tried to design a perfect shell for all of California, you couldn’t. The code wouldn’t allow it. There are multiple “climate zones” in California, each requiring their own base set of specifications. That’s the unique problem/benefit of our code here, it’s climate zone specific. Let me explain. Say you wanted to build a modular home that will end up sitting on a permanent foundation built with the exact same materials, construction processes, and finishes. You’d like that home to be able to be sold in any area of California including mild coastline communities and dry/hot desert cities. The Code would MAKE YOU design for the worst climate zone possible IF you did not create a custom “recipe” for each structure as you built them. One for the desert, one for the coast and so on. See the problem?

That is why the Tiny House movement has gained momentum. They are NOT foundation-tied homes. Tiny House on Wheels (T.H.O.W.) are built on movable trailers and therefore are not constrained to any of the 50 state building codes. They have to abide by either the travel trailer industry codes or the manufactured homes codes and regulations. Going this route with your idea may be challenging as ADUs are typically considered part of the property and not movable as with Tiny Houses.

Many jurisdictions are still wrestling with what to do with decreasing square footage demands and tiny houses. We’ll see how this plays out.

As for materials, many designers have taken advantage of the hundreds of thousands of shipping containers unused throughout the world. Most don’t realize it, but shipping containers are seldom “returned” for reuse in some countries and simply add to huge piles of unused boxes. Designers have utilized these steel boxes for time-saving home builds. It’s also an extremely environmentally-friendly approach to the build process as you are re-utilizing the materials, energy, and time it took to make these containers in the first place and many are already insulated to transport refrigerated goods. They also make shipping them easy from any country in the world as they are already built for this purpose. The challenge with converting shipping containers to livable spaces is that now you must bring a steel worker onto a site typically staffed with carpenters. One knows wood, the other steel. Best case scenario, you find a team who can seamlessly blend both.

Container-conversions can be stacked, shifted, even placed on end creatively but a lot of engineering is necessary if “optional layouts” become too lengthy. This (container-conversion) engineering is also challenging to convey to Building Departments as they are more familiar with sticks and stones construction practices. It may be best to configure a couple layouts/designs and perfect these rather than try to satisfy every application?

Another option is “skid-based” construction where a whole (small) structure is built on skids (6x wood beams) that support the structure during construction, the transport, and final resting of the building on the site. These skid-based buildings can be carried by flatbed trucks and craned over houses to rest in the back yards. Of course, size and weight will affect transport requirements and craning ability.

Kit homes are an interesting idea. I saw some Tiny Houses at a Tiny House Jamboree once that were brought in on a flatbed trailer in pieces. These pieces were larger sections of SIPS (structurally insulated panels) that were the walls, floor, and ceiling of the whole structure. These puzzle pieces were reconstructed before our eyes in one day by a four-man crew and small crane to form a complete tiny house. I’m sure it would be a lot easier to lift multiple sections over a house than one BIG box?? This is the manufactured house methodology used in Ireland and throughout Europe as the deliver packaged Passive Houses to sites and re-erect them onsite in days.

There is obviously a lot to consider. How to build? With What? For who? Etc. The clearer you become about the concept and target market, the better.

Know thy buyer!

Kevin

Hey Jonathan,

I too am trying to work my way through my Carrot sites.  I'm trying to make a go of it here in San Diego.  Yea, I know, crazy huh?

I'm no Computer genius and don't suggest that I am any type of Webmaster.  What I do know is how to market which is what drew me to Carrot in the first place.  Before I had to hire someone to build a site, usually Wordpress structure, that I could post-build go in and edit.

I'm not sure I can help but I am available if you want to communicate.

Good luck,

Kevin Beck