starting arch firm - how to design build? resources?

[goingsolo]

I am an experienced architect with great design ideas....but am ready to break away from the big firms I've been working for to go it alone.

I have prime real estate in houston,tx for development - residential.

I am looking to build a home for a family looking to be creative (and hopefully along the modern lines).....I will be doing everything from selling the lot (with current tear down home), designing, building to completion.

I am looking for this to be my "firm starter" - a successful project that will (hopefully) lead to more work and the foundation of my firm.

I've been searching for any information on this process to get me started. Where do I begin? What is the process? Tips..tricks...pitfalls,etc.

Can anyone point me into the right direction for information?

thanks!!

[mx2]

Common sense would dictate that you not put "all your eggs in one basket". Typically those who branch out on their own build up a clientele before going solo, as opposed to hanging your shingle and then going looking for clients. The issue is never what the project you're working on is going to provide for you in terms of income but rather what are your next projects that can keep you going....that takes some business planning. Being a developer-designer is great but it requires financing. If you do have access to such assets then perhaps you are wealthy enough to work on projects wihtout worrying about making a profit or not...well, at least until you build up a repertoire and reputation. In other words, I would re-think your strategy for starting your own firm. Tak.e some business classes or at least line up the work (and cashflow) before you jump...

mx2.5

[nanrehvasconez]

Stay where you are, learn how to manage your own company, if you own the prime real estate, design a home with yor best ideas as you please, and when you are ready and find the money to build, do it as a part time job. When you finish the home, sell and with the profits start your company. All and all learn to speculate and gamble hedging in your favor.

[phansford]

Why do you need to leave your present position to design and build a house on speculation?

Now - the tough comments/questions........

1. There is this thing - it's called the "Mortgage Crisis"...... it's real.

People are not getting loans unless they have 10-20 % down. This is not the time to take risks in the housing market if you have no experience.

BTW - Most national home builders are stating they have a 10 month backlog of product and many have halted new construction.

2. Housing is controlled by Home Builders.... not architects. Right or wrong - they understand (or believe) that houses are a product not art or even architecture. They run themselves like a business. Home Builders have learned that the majority of the public (90%) prefer traditional forms. Therefore, deciding to do modern will greatly reduce the number of people interesting in purchasing your Speculative house. It is an issue of market share. Also the Home Builders have marketing experts, realtors, and trades at their disposal.

Let me ask you this..... if building Modern houses was profitable don't you think these national companies would be doing it.....

Ryan Homes
Beezer Homes
Pulte Homes

That being said - Houston might be large enough for you to find people interested in Modern..... but you need to look at what is selling in the Houston Market. Modern homes are typically custom built by people who want a modern house.... they are not typically speculative ventures.

3. Where is the property that you own? Is it in a HOA or an area controlled by design review standards? I can pretty much assure you that you will not get approval of a modern design in a subdivision with an HOA or some form of design review. Depending on whether the development is built-out or still has open lots, the developer and builders control the HOA and you WILL NOT get approved if they are building traditional.

4. I am not trying to discourage you..... but I have been in and around residential development for sometime. I don't work in HOA's or new subdivisions. You need to do a lot of research before you throw your money into the fire known as Home Building.

I highly recommend you read "Last Harvest" by Withold Rybczynski. Rybcznski is an architect who happens to teach at the Wharton School of Business (U of Penn = Ivy League)

Stop reading Dwell magazine and start reading Builder. And join the local HBA and then decide whether you want to become a home builder.

OR

Think of different model of how you intend to market your "product". The success seems to be in the Modern House Plans market

Check out Greg La Vardera

Or the pre-fab approach where you are the manufacturer of the house or kit of parts such as FlatPak

If you build your modern house.... you might think about it being a model for you to live in and sell from.

Basically - you need to do a LOT of market research on the Houston market. You can start with the Houston HBA . Join as an architect..... its typically cheaper. This will allow you to also network.

[csintexas]

That is all pretty pessimistic advice although phansfrd was pretty right on as usual .

Some people manage to do quite well by taking risks. Dallas has made some gain in modernist design recently maybe Houston can also. The economy in Houston is pretty good right now (high energy prices no housing bust)

Some national mortgage companies may be tightening their lending practices but local banks are the same as ever. Go find a local bank and get to know a loan officer.

Anytime someone starts building they take a risk. If you have low debt and are able to move into the house if it doesn't sell or can handle getting through the first one or two with no profit you will be in a better position.

I think architect/builders are a great idea and wish we could see more of that. I think the recent trend in environmentalism will create more opportunity for modern (green) design.

[phansford]

Not necessarily pessimistic..... but I do have some direct insight into the mortgage crisis and NO part of the country in immune. Wall Street is not buying loans.... meaning you have to extremely good credit and be low risk to the borrower. You are not going to find the type of mortgage products you saw 2 years ago. You will have to have substantial money down (10-20%)

Again.... do the research . Real Estate in Houston is in a slide just like the rest of the country.

[mx2]

[csintexas]

Well maybe Houston isn't in the boom it was ten years ago but it is far from a bust. Definitely not the best market for specs these days but that doesn't mean there isn't a market there. This is the nature of building, like anything else, if you do it better than the average person you will probably succeed.

Building is a risky business, that is why it pays fairly well. The worst that could happen is you loose money. We don't know anything about this persons financial status or experience level. I assume he has enough money to build a house, and it certainly wouldn't hurt to talk to a loan officer.

[mx2]

[csintexas]

If everyone was afraid of losing money we would have no venture capital and no one would ever start a new business.

[djswan]

[cousinbirgco]

goingsolo,
I have read your post and it appears that you are not planning a speculative venture but a custom build. (you may need to clarify that point). I think it is a great idea to design and custom build a house in this economic climate because you will be using OPM (other peoples money). I would not plan a speculative project at this point in time unless you have the following:
1. deep pockets
2. deep pockets
3. deep pockets
4. a great contingency plan

That being said, if you plan a custom build with your land you need to get to the building/planning dept. to find out exactly what you can build on the property i.e. sq. ft., height, style, set backs, approx. time for approvals, etc.
Once you have a good idea of what you can build, you then need to find the most successful realtor in you area and go to lunch with that person.
During your lunch, discuss exactly what you would like to do with regard to building the project you have in mind. The realtor should be able to give you the market feedback, price ranges, client availability, and other info you need to see if the plan is workable. If everything goes well, the realtor can market your lot to clients who wish to have an experienced architect design and build a special home for them. Make sure you have a clear idea of the marketing plan, commission and other services the realtor will supply. You may want to sketch up a few ideas you have to serve as a hook for perspective clients.
Once you find a client, I think it is important to make sure you are both on the same wavelength, because you will be "married" to this person or persons for the next year or so. Make sure you have a very detailed contract that outlines every single possible thing you will and will not be providing. Make sure you have a great collection of subcontractors you can rely on to get the work done on time and with high quality. Make sure you have the time to supervise the work because as everyone knows, the quality of most work is directly related to the amount and quality of the supervision during the project. Make sure you get as much money up front as reasonable and money along the way so you won't be using any of your own money. Finally, don't listen to anyone who will discourage you from realizing your dream. As you know, designing and building a home is a problem solving exercise. Good planning, research and time management will go a long way to make this happen for you. This is a good start, there are probably a few hundred or so other details that you will need to know along the way, but as I said, it's a good start. Good luck.

[mx2]

You're all full of sh*t...how many of you have done this? Are you giving this "great" plan to your friends and family as a recipe for success? Why not? I rest my case... see you in bankruptcy court.

mx2.5

[phansford]

First off - No one is telling anyone not to "chase their dreams". However, several of us with extensive experience in residential development and home building are doing the prudent thing and telling you to do extensive research on the market. Plan and invest wisely.

Let's assume you are not doing a spec house, but hoping to find a "client" who wants to buy your lot and have you design and build THEIR dream house. You will need to be flexible in the design and might have to do a traditional design. Are you willing to do that? (Is that a pro or a con)

As a firm starter - this project will probably not give you the cash jumpstart you are thinking. The idea of being the builder will certainly help increase your potential profits from the project. (Put a check in the Pro column)

However, you might find that the local market - where the builder provides the design services - is softer on the design fees. In other words, your competition will go to a draftsmen or a residential designer and get the plans for a couple of grand. Certainly not the fee you might want to accept if you are use to the fees associated with typical architectural services. (Let's call this a Con )

If you are intending to open your architectural practice as a design and construction company, you need to understand you might reduce your market share. If you intend to have projects where you are only the designer, you will find it difficult to find builder's willing to bid/construct your work....... because as a builder, you are competition. (Put a check in the Con column)

Also - while you are busting a gut to design and build this one project, what projects will you have lined up after this project. One house will not feed you or your family. Will you be able to market and do business development. Do you have a client base from your current position that you think will follow you. (Be honest with yourself - have you changed firms before and have clients followed you. Are you involved with marketing and business development in your current position?) You decide - Pro or Con?

I think MX2 is being practical in his comments. You need a business plan, think how you are going to finance your first year or two without lots of work, and what is your market segment. You need to know what the expense will be and what income you need to bring in to meet the basic bills of food and shelter for your family. (Do you have an attorney, an accountant, insurance agent, financial planner, ..... and yes I have all of these and more and they cost me money )

The other thing I can tell you ..... architects who have been doing commercial work and try to do residential work typically struggle. There are local standards in home building and you need to learn them to be able to provide good services to your clients. Homebuilders are not the most accomplished contractors. They don't work very well outside of their comfort zone. If you detail or design something that is outside of their experience, they will ignore the drawings. And unfortunately, most home owners think the homebuilder is the most knowledgeable person in the process. Meaning they will listen to the builder over the architect. (Do you have experience in residential design - Pro or Con - BTW - there are some projects I don't do because I don't have the experience and knowledge - I am not equipped to do a 4 story office building. I don't have the staff).

The other thing you need to consider is your subcontractors..... they will make or break the project AND you. How do you know you have the right people for the task? Are they doing work for your competitor and will they reduce the level of service to you as to keep their larger client. IE - If Plumber Bill does work for Builder John and John does thirty 750 K houses a year. You schedule Plumber Bill to be on your project Monday..... and so does Builder John...... whose project are they going to on Monday? Its all about relationships..... do you have those relationships to make being a part-time or one-time contractor successful.

Well enough Dream Killing for one post If you are seriously considering this venture - good luck - plan well and talk to your attorneys and accountants and insurance people - invest with the full intention and a carefully planned strategy to make a profit..... the best investors do not go balls to the wall..... they review the stock of the company carefully with full intent on making money.... not losing it.

[cousinbirgco]