All Forum Posts by: Rich P.

 Just curious..are you able to build for that range in LA that is then selling for what..in the 300's $/sf I assume for an average area? What about lot prices you see down there? 

Oh man what an open question! You need to generate a pro forma that plugs in all your assumptions, land acquisition costs, development costs, rental rates, hold terms, and then let it spit out a sensitivity analysis so you can see what your IRR would be based on the hold and the equity multiple generated based on offer price. The BASIC way of looking at it is this. You spend X on dirt, Y on development, Z on leasing to calculate a % Yield on Cost. Leasing up the space will drive value. What is the exit strategy? Sell off on a lower exit cap to a core portfolio?

 East bay Oakland/Berkeley through 24 corridor to WC, down to Dublin. I know loads of sub contractors to directly manage commercial work but they are not the right people to work on residential or smaller projects and I just do not know that sub base or GC base. These would be ground up resi buildings

I think your current skill set would help determine which path you would take. If you do not work in any type of environment where you deal with construction or development etc, it will take a lot of effort to learn the technical side of the business. If you have more of a business/financial background perhaps your skill set would enable you to be more beneficial raising capital, getting loans, presenting deals to partners for an equity stake etc. You could also be more involved with putting pro forma's together when analyzing land to build on and projecting returns etc. Depending on what your skill set is, you could potentially partner up with someone who can compliment the other side. IMO to be successful in RE development, you nee dot know the technical side first and foremost. I have seen more guys get in trouble who are more financial guys without proper technical skills. 

If the client is not capable of figuring this out then they need to get with a General Contractor who builds homes from the precon and permit/entitlement phase through to handing over they keyes. Just look for anyone that has built a custom home nearby. 

Just so you know, theres no way you will be able to get an actual building permit to build something within 30 days. You need full construction drawings into plan check for that. All you will be able to do is get information from the City on how the land is zoned and what restrictions are in place for that zoned parcel (setbacks, height, land coverage ratios etc) . If it is zoned something OTHER than what he wants to build then that throws a whole new issue in place because then you have to go re entitle the land which is more risky and could be open to public review etc. You can have all this conversation at the City with a plan checker to get preliminary info. 

Anyway as far as getting someone to build it prior to foundation work, like I said get a General Contractor that can handle whole process or if client is capable, they can direct hire a utility contractor and an earthwork/grading company to set the pad. They will also need to get with the City water and local electric company on generating a Work Order to get power brought to the site. 

 This blows my mind. That area around Jefferson...East/South Oakland near Fruitvale..to that Eastmont shopping center..Maxwell Park. Anything between the Coliseum  and the 13 etc. Yes there are SO MANY terrible homes to buy and fix up. But the area is aweful IMO. Other people may move there but theres no way I would with my family. My SO really wanted to be in Oakland so we spent a lot of time looking around. No matter how cute of a house we found that was incredibly refurbished and renovated, we never got the feel of 'yeah I can feel comfortable going to the store here or walking my dog around the neighborhood'. We couldn't pull the trigger. The more time we spent looking the more we realized we would never feel safe even going to the grocery store in those neighborhoods. Its a shame because that area geographically is brilliant. The people down there still remain pretty damn ghetto. 

Anyone know of any GC's or sub contractors that operate in the residential space on the Bay Area? Specifically higher end custom home or small multifamily (3 - 4- units). Thanks. 

 Are you seeing that $160/sf price basically your GC contract cost? So thats building only (excluding permitting, fees and lot?) ..thanks...

Hi...What product type is this? SFH in the Bay Area? Is this hard cost only (building construction)? Seems low to me. Are you really building for $70/ft excluding cost of lot, permits?

 10)% on the land. Thats not going to change. But assuming you build LIKE TO LIKE..apples to apples...then you should FOR SURE be able to build it cheaper in a pre fab environment and also reduce risk/change orders by a lot too. I have never built pre fab but I love the idea of it and it isn't new. Lots of companies do it. I love the idea of risk being reduced so much. In pre -f ab they are literally building off shop drawings. I would go out on a limb to ay if you built the same house twice, one pre fan one traditional, that the pre fab cost would be lower overall due to the reduced risk. Again, I have not built pre fab but am looking into it for my next development.