TM INFORM. INSPIRE. EDUCATE. EMPOWER.
OPERATIONS Commercial Real Estate KPIs
MARKET TRENDS Post-Peak Home Pricing Forecast
Designing the Perfect Fix-and-Flip Loan FUNDING
Special Suppliers’ Section ALSO IN THIS ISSUE
What’s Included The Role of Design in Every Aspect of Real Estate SPECIAL FOCUS • One-on-one, 20-minute video interview by Eddie Wilson filmed on location. • Video interview posted on Eddie Wilson’s website and social media pages, and the Think Realty Podcast page. • Profile article in Think Realty and Private Lender magazines with coverline status. • Profile article posted on thinkrealty.com, aaplonline.com, and officialew.com, naming you the exclusive Titan of your sector for 12 months.
Filmed on location, Titan Talk is a one-on-one interview between you and Eddie Wilson, CEO of Think Realty and the American Association of Private Lenders. This personal endorsement carries extensive publicity, marketing opportunities, and bragging rights, naming you as the exclusive Titan of your real estate sector for a year.
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• Video and article circulated to over 24,000 industry professionals via the Think Realty and AAPL e-newsletters. • Six social media posts on Think Realty and AAPL’s Facebook and LinkedIn pages.
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Online Reporting Owners maintain control of their property and keep tabs from afar using their own online account, with easy access to updates on property activity, including vacancies, leasing, maintenance, property evaluations and financial reports. Cost-Effective, Reliable Maintenance Relationships with preferred vendors result in discounted equipment and services. Maintenance staff is available 24/7 to handle emergencies and to make sure maintenance is timely, cost-effective and done in a professional manner. Timely Rent Collection Nothing affects cash flow more than late or missing rent payments. In addition to offering incentives for paying rent on time, our collection processes are professional but tough, and we are extremely diligent in collecting rent through a systematic, timely process. Strict and Compliant Evictions Even with careful placement there is occasionally a tenant who needs to be evicted. Our offices are knowledgeable in state and local landlord and tenant laws. If rents are not paid on time, we strive to minimize costs by following the legal steps quickly and efficiently to get the property leased again.
money lost. Professional management costs are easily offset by shorter vacancy. Our advanced planning and heavy advertising gets vacancies filled fast.
Thorough Tenant Screening and Selection
Placing the wrong tenant can quickly cost you more than professional management fees. We make every effort to find tenants who will pay rent on time and take care of the property with the use of criminal, credit, and employment checks. Full-Service Leasing In addition to advertising properties and screening tenants, our full-service leasing process also includes rent-ready guidance, market rent analysis, professional showings, move-in property assessments, and professional tenant education at lease signing. Routine Property Evaluations Regular assessments of both the inside and outside of your rental property ensure tenant compliance with the lease and identifies maintenance needs to preserve your property.
PUBLISHER & CEO Eddie Wilson
MANAGING DIRECTOR Linda Hyde
MANAGING EDITOR Carmen Fields
SALES MANAGER Kurt Power kpower@thinkrealty.com
FULFILLMENT COORDINATOR Blair Pierce
DESIGNER David Rodriguez
CONTRIBUTORS Luke Babich Daren Blomquist Jenifer Calandra Merrill Chandler
Jamie Cohen Andrew Flint Matt Giffune Kate Haubrich Timothy B. Hawkins II, J.D.
HEY! LET’S BE FRIENDS! GET SOCIAL. STAY CONNECTED.
David Jacobs Bruce Kellogg Laura Olson Alicia Ortiz Susan Reilly Damon Riehl Jeff Roth John Santilli
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4 | think realty magazine :: may – june 2023
FROM THE EDITOR
Cost-Saving Your Way to Design Success
esign is so much more than what is
and to prioritize the project’s more important features. 3 Permitting and Regulatory Costs. Depending on the location
D
appealing to the eye. All good design starts with a vision, but it also requires an understanding of current trends and budgeting. Several factors can cause costs for home
and type of renovation/rehab, there may be additional costs associated with obtaining permits and complying with local regulations. Always check permitting regulations, especially in historic neighborhoods. Often there are restrictions you may not know about. Save yourself time and money by doing your due diligence on the front end of your project. Think Realty has partnered with some of the largest names in the industry to provide our members with savings on materials. From flooring to paint, appliances and cabinets, we have sourced the best resources to help you save. Sometimes it truly can be about what you save on a project that brings your profit margin from red to black. Check out our insert on page (see page 40) to see some of the offerings from our valued discount partners. Whether you are updating rental properties, doing a fix and flip, or just renovating your own home, let Think Realty’s savings program save you money. Activate your discounts for free and start saving on common renovation/rehab materials at https://thinkrealty.com/think-savings.
renovations/rehabs and designs to increase. As you plan, here are a few things to consider
about how design can impact costs: 1 Material Costs. The cost of building
materials can vary greatly depending on factors such as availability, demand, and seasonality. If the material needed for a renovation/rehab project is in high demand or short supply, the cost can escalate significantly. Shortages of many common materials has greatly affected scope of work and timeline on several projects. 2 Design Complexity. The complexity of the renovation/rehab design can also contribute to higher costs. A more intricate design may require more materials and labor, including specialized expertise, which adds to the overall cost of the project. To stay within budget, it is important to be realistic about the scope of work and complexity of the project
CARMEN FIELDS, MANAGING EDITOR
thinkrealty . com | 5
CONTENTS
INSIDE THIS ISSUE
8
SPECIAL FOCUS
THE ROLE OF DESIGN IN EVERY ASPECT OF REAL ESTATE In this special section, you’ll gain an understanding of how design contributes to every project’s success: from the structure of the financing to the budget to the look and feel of the building to selecting team members to building your website.
6 | think realty magazine :: may – june 2023
INVESTMENT STRATEGY 32 Understanding Land Sale Contracts This form of seller financing can provide an appealing alternative to a traditional mortgage in some instances. By Bruce Kellogg
DESIGN 8 Small Space, Big Impact
50 Designed For Success: Creating Achievable Goals Consistently tracking and completing written daily, weekly, and monthly activities is key. By Jeff Roth 54 4 Things You’ve Never Considered About Your Website’s Design Overlooking just one of these critical factors can cost you customers and money.
Follow these design tips to maximize your property’s potential. By Jamie Cohen 12 Kitchen Cabinet Design Tips & Tricks for 2023 Here are four cabinet upgrades that can make your kitchen look brand new. By Kate Haubrich 14 The Balance Between Successful Design and Budget Understanding which improvements are best for your property will help you attract renters or buyers and maximize your profit. By John Santilli 16 How to Design a Home from the Ground Up Doing your research and writing out a clear design plan will help to make your project successful. By Michele Van Der Veen 22 Why Design Matters for Industrial Properties The design of an industrial property determines value and impacts your investment; consider these 10 factors as you weigh your decision. By Neil Timmins 26 5 Renovations That Add Value to Your House Flip Your goal should be to maximize the amount of value you create in your property while minimizing the amount of capital needed to achieve that value. By Ryan Zomorodi FUNDING 28 Designing the Perfect Fix-and-Flip Loan An article series on navigating the private lending world By Damon Riehl 30 Business Lines of Credit: The Golden Egg That Keeps on Giving A business line of credit can be a valuable tool
LEGISLATION 36 Tenants Are Not the Enemy of Housing Providers
By Jenifer Calandra
56 Segmenting for Success
Housing providers must work together now more than ever to fight legislation with unintended consequences. Timothy B. Hawkins II J.D. and Alicia Ortiz 38 Layers of the Florida Condo Legislation
Segment your prospect lists for better marketing conversion. By Justin Silverio
58 Why Insurance Shouldn’t Be an Afterthought
The new law is meant to protect people in their high-story home from disaster that can occur when maintenance is not performed By Susan Reilly
With comprehensive and effective coverage, you can be confident your investment has the proper protection from any unexpected events or losses.
By Laura Olson
MARKET & TRENDS 41 Lower the Boom
62 12 Tips for Photographing Your Rental Property Photos can make the difference between successfully marketing your rental property— or not.
Here’s a glimpse of what post-peak housing prices may look like in 12 local markets. By Ingo Winzer
42 Why Investors Are Cautiously Bullish to Begin 2023 More favorable pricing at auction, easing interest rates, and other factors have some investors eyeing opportunities. By Daren Blomquist
By Luke Babich
64 Why the Design Phase Sets the Stage for Project Success Clearly defining project goals and your level of involvement, selecting the appropriate design team, and effectively managing communication are all keys to preventing costly mistakes that might derail your project. By David Jacobs
OPERATIONS 46 What to Consider When
Establishing Commercial Real Estate KPIs You can mitigate risks and better respond to market conditions by establishing and monitoring KPIs aligned with your business goals. By Andrew Flint 48 3 Ways to Use Lease Management Software for Inflation Protection Tackling inflation while managing multiple leases can be especially challenging, but it doesn’t have to be with the right tools and data. By Matt Giffune
SPECIAL SUPPLIERS SECTION SEE INSIDE
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thinkrealty . com | 7 Atlanta Office, Warehouse, Showroom 1055 Research Center Dr. Atlanta, GA 30331
DESIGN
SMALL SPACES
Small Space, Big Impact FOLLOW THESE DESIGN TIPS TO MAXIMIZE YOUR PROPERTY’S POTENTIAL.
By Jamie Cohen
hether you want to sell a family home or liquidate an
are ways to make a small space as striking as a mansion, ranging from updating the home’s interior to taking advantage of curb appeal. The following are tips and tricks to help you turn a small property into a wise investment
with a maximum return on investment (ROI).
W
investment property, maximizing your property’s resale potential is crucial to achieving high financial returns. Smaller properties can be challenging to maximize, but there
MAXIMIZING THE INTERIOR Making the most of a small property means ensuring your space
8 | think realty magazine :: may – june 2023
side walls light can make a room appear longer—and the opposite can make it appear wider. • Painting just one wall with a dark color can shorten or shrink a room. • Accent colors can widen or shorten your room depending
on whether the dark accent is on the bottom (widens) or top (shrinks). Make sure to
paint accent colors about chair height to achieve this effect. • Lower a tall ceiling by painting it a darker color. Conversely, you can raise a ceiling with darker walls and a bit of light paint. Adding an accent color to a wall can liven up home design and distract from the square footage of a room. Feel free to go for bright, fun colors—they can make a space seem alive and vibrant, especially with the proper lighting. Lighting Is Key. Lighting your home comes down to opening up a space without washing it out. If you can use natural lighting, you should always prioritize it. Swap out those dark, light-blocking curtains for bright, gauzy curtains that let in natural light. If you can’t get natural lighting in a space, opt for warm light from crucial spots throughout the room. Some spaces, like your kitchen or a work area, benefit from white light, but warm, diffused light can elevate your property and create a cozy space. Pairing the right light with the right space maximizes your small proper- ty’s potential and attracts potential buyers. Take a moment to consider each area in your property and the general vibe you’re selling. For example, you can see yourself living in a bedroom with natural lighting
is decorated but not cluttered. From choosing the right paint colors in critical areas to creating the illusion of more space to prioritizing lighting, there are several ways to maximize the saleability of your small property. The three main things to consider to unlock the potential of your property’s interior are: • Updating interior paint
great tool. It can transform a space by extending a room or hiding less-than-attractive areas . You can achieve plenty of optical illusions with color (and no, you don’t have to be an artist to fool the eye). Here are some ideas for expanding or shrinking a space using paint: • Light walls and ceilings paired with a dark floor give the illusion of a larger room. • Darker walls and ceilings can shrink space. • Painting a back wall and ceiling a darker color but keeping the
• Focusing on lighting • Investing in staging
Updating Interior Paint. Color can do a lot for open spaces. In a small space especially, color can be a
thinkrealty . com | 9
during the day and warm, cozy accent lights at night. Conversely, having ample lighting in the kitchen that’s bright enough to cook by, but not overwhelming, can make any kitchen feel like a chef’s paradise. Staging Is Everything. Staging your home helps buyers see themselves in your home. The National Associ- ation of Realtors (NAR) found that staging increased the overall dollar offer on the properties by 1% to 5%. Here are a few quick tricks to make staging work for you in a small space: • Invest in high-quality furniture to give each space its own identity. • Focus on critical areas of the home (living room, kitchen, bedroom) and stage these properly. • Push furniture back from the wall to give the illusion of extra space. • Remove personal items and clutter. • Use artwork to guide buyers’ eyes through a room.
• Finally, use neutral colors to create a blank canvas for potential new owners.
EXTERIOR UPGRADES The exterior design of a space is just as vital as interior design. Here are some key ways to monitor curb appeal and make your land- scaping work for you, no matter how small the lot. Curb appeal is how potential buy- ers see your home from the outset. It includes things like a garage, access to amenities, and landscaping. You cannot change certain parts of curb appeal (like closeness to amenities) after you buy your property; however, there are some aspects you can change or use to your advantage. Upgrading the siding, doors, and windows on your home and keeping
the gutters well-maintained can upgrade the appearance of your property. In addition, ensure the roof is in good shape and all outside amenities are inviting and ready to use. Making minor fixes on your property can make a huge difference, including pressure-washing side- walks and walkways and maintaining lawn space. These small, routine acts can significantly affect a buyer’s interest levels. Achieving a high financial return on a small property requires max- imizing its resale potential. There
are several ways to do so using design—from updating the interior paint and lighting to creative staging to leveraging curb appeal and updat- ing the landscaping. Using these tips and tricks allows you to turn a small property into a wise investment, despite its size.•
Jamie Cohen is a freelance digital marketer and writer with a passion for real estate investing. He enjoys remodeling his family’s first home as a hobby and spending time at dog parks with his two Boston terriers.
10 | think realty magazine :: may – june 2023
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thinkrealty . com | 11 Dominion Financial Services LLC. NMLS ID # 898795, 1029 N Calvert St Baltimore MD 21202. Dominion Financial Services LLC is not currently licensed in NV. Dominion Financial Services, LLC is licensed or exempt from licensing in all other states. Dominion Financial Services, LLC is licensed in Minnesota as a Mortgage Originator (License No. MN-MO- 898795). Dominion Financial Services, LLC is licensed in Arizona as a Mortgage Banker (License No. 0950308). Dominion Financial Services, LLC is licensed as a California Finance Lender and Broker under Department of Business Oversight (License No. 60DBO 91679). Dominion Financial Services, LLC is licensed in South Dakota as a Mortgage Lender (License No. ML-05220). Dominion Financial Services, LLC is licensed in North Dakota as a Money Broker (License No. MB103364). Dominion Financial Services, LLC is licensed in Vermont as a Commercial Lender (License No. 898795 CLL). Dominion Financial Services, LLC is licensed in Oregon as a Mortgage Lender (License No. ML-5763). Dominion Financial Services, LLC is licensed in Idaho as a Mortgage Broker/Lender (License No. MBL-2080898795). Dominion Financial Services, LLC | NMLS# 898795 | 32 South St, Baltimore, MD 21202 | DominionFinancialServices.com
DESIGN
KITCHEN CABINETS
Kitchen Cabinet Design Tips & Tricks for 2023 HERE ARE FOUR CABINET UPGRADES THAT CAN MAKE YOUR KITCHEN LOOK BRAND NEW.
By Kate Haubrich
he kitchen is the heart of any home. Potential homeowners have a lot of opinions about a property’s kitchen. By adding a couple of affordable cabinet upgrades to a kitchen renovation, you can give your project some extra appeal. But before you get started with your cabinets, it’s important to note that a professional layout is a critical first step in any kitchen renovation. A good professional designer knows all the pitfalls to look out for (e.g., doors T
opening into appliances or cabinets, lining up the sink with the kitchen window, where and how to use space fillers, etc.). A designer has seen it all and will work with you in areas where you need to get creative to achieve your vision. Most important, a good designer will be able to generate a color, 3D-rendering of your project as well as line drawings and a “birds eye view” of your kitchen with all the measurements clearly outlined. These drawings will be critical tools as you work
with contractors and installers to place all the components of your kitchen correctly. Once you have a professional de- sign in hand, think about incorporat- ing the following four cabinet ideas. 1. SMART STORAGE SOLUTIONS Your designer can assist you with slipping in smart cabinet storage solutions, especially in tight spaces. Hidden Charging Stations . By install- ing a few outlets in upper cabinets or even in drawer bases, you can keep your countertop clutter free. All your phones and unused charging cords will be hidden from site. Roll-Out Trays. Double the storage space in your kitchen by adding roll-out trays. Add two trays to your larger base cabinets and load up your pantry with three to five trays. Now you not only can access the contents of your cabinets more easily but also have a ton more storage space for cans, plasticware, dry goods, small appliances, etc. Try a roll-out tray under your sink for a great way to access your cleaning materials (and keep that cabinet from becoming the neglected stor- age space it usually is). Spice Pullout Racks. A really easy upgrade that solves a big headache for the end user is to install spice pullout racks. Spices are presented
12 | think realty magazine :: may – june 2023
in a deep base cabinet where the door pulls out three racks of storage space. These short-width cabinets also make great endcaps to a range or other appliance. Appliance Garage. An “appliance garage” is a space that hides your small appliances such as blenders, toasters, air fryers, etc. With an appliance garage, you can keep these appliances on your counter, but they are hidden behind a hinged cabinet door that matches the rest of your kitchen. If coun- tertop space is limited, consider a “lift” for your mixer stand: Trans- form a shelf in a base cabinet into a platform that stores your mixer (or other small appliance) when the mixer is not in use but can be gently maneuvered into countertop height when access is needed. 2. CEILING-HIGH CROWN MOLDING Although tall wall cabinets are currently trending, connecting them to the ceiling with crown molding will continue to grow in popularity through 2023. This practice draws the eye up the cabinet, elongating the space. Leaving upper cabinets “free-float - ing” creates a linear break between
the top of the cabinet and the ceiling, creating a shortening effect. Whether you can achieve this effect with crown molding depends on the existing kitchen structure. Often, electrical is kept within soffits, making them complicated to remove. A work- around is to simply add crown molding to the soffit—an easy way to still achieve the “elongated” cabinet look. Adding crown molding is also a fun way to add more character to a project and space. There are many styles of crown that will work with a wide variety of cabinets, offering a great way to add detail and texture to your project. 3. TWO-TONE CABINETRY HGTV has certainly shown us a lot of dramatic kitchens in dark blues, greens, and even black. A neutral two-tone kitchen can still give your project plenty of drama. Try painted white cabinets on top, with darker gray cabinets for your base. This technique can be especially effective in darker rooms where all-gray would make for a gloomy kitchen, yet you still want something different from the standard all-white kitchen that’s so popular today. If you have room for an island, make it the focal point of your
kitchen. Feature the island in a different, but complementary, finish or color. Perhaps experiment with a blue or green shade that is a bit much for an entire kitchen but works well as a pop of color for an island. 4. O PEN SHELVING OR GLASS FRONT CABINETS Open shelving is enjoying a comeback moment in 2023. People seem to either love it or hate it. A bit of open shelving placed over a fully backsplashed wall can create a
beautiful detail in a kitchen. For those that just see open
shelving as a clutter magnet, glass front cabinets could be the answer. Glass front cabinets bring a touch of “openness” to the space while still allowing you to hide that one ugly coffee mug your friend made you out of view, in the back behind the matching coffee cups. •
Kate Haubrich is the director of marketing at MFS Supply. Throughout the past seven years, Haubrich has run eCommerce, product management, and
data analysis at MFS Supply in addition to her standard marketing strategizing responsibilities.
thinkrealty . com | 13
DESIGN
BUDGET
SPONSORED CONTENT
The Balance Between Successful Design and Budget UNDERSTANDING WHICH IMPROVEMENTS ARE BEST FOR YOUR PROPERTY WILL HELP YOU ATTRACT RENTERS OR BUYERS AND MAXIMIZE YOUR PROFIT.
By John Santilli
Y ou’re a real estate investor. Maybe you flip properties. Perhaps you hold properties and rent. Whatever your investment strat- egy, as a real estate investor, your success depends on your ability to choose the right improvements for your investment properties. Striking a balance between curb appeal and current design trends is
crucial to attract buyers or renters and ensure profitability. Understanding what today’s buyers and renters want in a property is essential, but at the same time you must stay keenly aware of your investment property’s potential profit margin. For example, if your property is in a high-end neighborhood, prepare to invest in more high-end
fixtures and ensure the layout and decor reflect current styles and trends. On the other hand, if you are flipping a property in a mid-range neighborhood, you must moderate your investment in improvements so you don’t drag down your profit. But how do you know which improvements will bring the best ROI? In this article, we’ll explore a
14 | think realty magazine :: may – june 2023
few of the key factors to consider when choosing improvements for your property. Keep in mind that with design trends changing constantly, you should combine some evergreen design ideas and current trends, depending on your market. Knowing what the market, the neighborhood, and the comps can support is critical to choosing improvements that boost value in a way that will give you the most ROI. SUSTAINABILITY Now more than ever, there is a focus on sustainable options to save operating costs and appeal to environmental consciousness. Choosing something as simple as LED lights makes a statement that the property is eco-friendly and more cost-efficient. If your property is in a higher-end market, your budget can sustain higher investments, such as radiant floor heating. ROOMS Renovating kitchens and bath- rooms have always been great ways to improve a property. According to the National Kitchen and Bath Association, people still want larger spaces and less clutter. If your flip is in a high-end market, consider adding small appliance work areas and larger (or even double) islands in the kitchen. People are not just seeking more energy-efficient appliances; they also are seeking things like second freezers in the garage or basement. More moderate properties, on the other hand, tend to stay with the basic smart technology that
buyers and renters consider to be convenient and valuable. Those with a smaller kitchen footprint should consider adding some features that help maximize space. In bathrooms, there is still a trend toward larger showers (even at the expense of having a tub), and people are looking for additional space, like sitting areas. Here, a less costly investment is smart tech for faucets and lighting. An area where the pendulum has made a big swing is in open concept floor plans. With the pandemic creating a need for home office space and the job market turning remote, creating work nooks can be an excellent way to generate ROI for your renovations. Whether renting or selling your investment property, people are looking for comfort, cozi- ness, and a little privacy in layouts. This is excellent news for investors in older properties that never went open concept in the first place. COLOR An easy and cost-effective way to look on-trend without blowing your reno budget is with interior and exte- rior color choices. “Greige” has been in fashion for years, but now people are ready for some color, including blues and greens (even bold ones). Earthier color schemes and more natural materials like stone, which add color and texture, are affordable on-trend touches to consider. INSULATION One timeless investment that’s also sound is insulation. The cost of attic insulation can be recouped by more than 100%. Front door and
garage door replacements are more subtle, but have excellent curb ap- peal and have massive resale value.
EXTERIOR When considering the exterior, think about the area’s climate. Face it. Whether you are presenting to a renter or a new buyer, a house’s façade and landscaping make the first impression. Native plants and drought-tolerant landscaping is becoming more important to buyers. Renters want something low maintenance and presentable to guests. As always, ensuring you have a nice, inviting front door with nice hardware and some inviting outdoor lighting will also make your investment property more inviting to renters and buyers. Think about installing a smart doorbell camera. As you choose improvements for your investment properties, keep in mind market trends, your budget, and potential ROI. By focusing on appealing design that includes functional rooms, open space, trendy colors, and exterior features, you can create a property that will attract buyers or renters and generate a solid return on investment. •
John V. Santilli is the chief revenue officer for RFG. He joined the company in July 2019 and is responsible for all opportunities connected to its RFG,
including expanding the company’s sales channels to maintain its position as a leader in rehab financing. Before joining RFG, Santilli had 25 years of lending and marketing executive leadership experience across multiple private and public marketing-dependent companies. He managed companies from startup to maturity, ranging from $2.5 million to more than $50 million in annual revenue. Santilli earned a master’s degree in management from the University of Pennsylvania and a bachelor’s degree in business administration with a concentration in marketing from Drexel University.
thinkrealty . com | 15
DESIGN
PLANNING
How to Design a Home from the Ground Up DOING YOUR RESEARCH AND WRITING OUT A CLEAR DESIGN PLAN WILL HELP TO MAKE YOUR PROJECT SUCCESSFUL.
By Michele Van Der Veen
D esigning a home from the ground up requires creativity and imagination—and can be overwhelming. But, there’s an approach you can use that you’re already familiar with: Getting started on designing a home is similar to doing research for a school paper.
experience, but doing your home- work is the key to success. Deciding on the style of the home is one of the most important decisions you will make. So, how to start your research? Some of the best ways to determine what you want to build is to look at what others have already built. Look at as many homes in person as you can and pay attention to their design, including floor plans, elevation drawings, and even
material boards. Other great sources for your research are design books and home design magazines. Television shows on net- works such as HGTV and the Magnolia Network also provide great inspiration for design ideas. Apps such as Houzz and Pinterest are also great resources. Spend time gathering ideas in the home design section of the bookstore. Today’s bookstores are filled with hundreds of books full of thousands of ideas. Remember, after you decide
DO YOUR HOMEWORK A home built from the ground up can be an exciting and rewarding
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on a home style, head back to the bookstore to get a book focused on that particular home style. Research and study every room in the book to build a home that will capture the feel of the style you want to achieve. Start a notebook with a section for each room. Collect pictures of designs you want to incorporate. This approach may seem a bit old school, but a book with a collection of your design ideas can be easy to access on the job site. Being able to make copies of your ideas to leave with the contractor once the build is underway helps minimize mistakes as you convey your ideas. TAKE A FIELD TRIP TO A MODEL HOME Although designers are creative people, sometimes they need a boost
to get their creative juices flowing. Often, model homes are wonderful to visit because they showcase the latest interior design ideas. Model homes can also give you a feel for the room sizes and house sizes that will work for the project you have in mind. To make your visit to a model home most productive, take a measuring tape to measure the rooms you like. Be sure to consider the size of the room versus the size of the beds staged in the room to give you a more accurate idea of the size of bedrooms you’ll need. Likewise, measure door openings and the width of hallways. Assess the height of ceilings. Pay attention to the flow of the rooms and how each room connects with the others. Also take a look at door trim size, baseboards, and win- dow casings. Pay attention to window locations and the height and size of windows. Look at exterior finishes
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for paint color ideas as well as batt and board or lap siding concepts. Don’t overlook the roofing material and the pitches of roofs. Roofing with steeper angles will always be more expensive than roofs with fewer angles. Overall, model homes can be one of your best tools and resources for planning and designing any home. Being able to see designs in person will always be one of your best sources of information. Now, with a design style in mind and all the creative ideas you’ve collected, it’s time to start design- ing your project.
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MAKE YOUR CHOICE Some home styles are much more expensive to build than others, so if you’re on a budget, you will need to understand what you’re getting into financially before you commit to a particular style. Since different styles demand different designs, not all home styles will cost the same to build. The style you decide on will drive the rest of your decisions. For ex- ample, exterior and interior material is determined by your choice of home style, and these materials can vary greatly in cost. Mediterranean homes are usually the most expensive to build because of their custom-shaped windows, higher ceilings (which require the home to be better insulated), and, of course, expensive tile roofing. Farmhouses and ranch houses, with their more square and rectangular lines, tend to be the least expensive to build. Choose a style you love—and can afford to build!
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to life and should be an exciting and encouraging moment! Any time you take on the task of building a house from the ground up—whether it’s your first house or your hundredth—your success will come down to the amount of effort you put into finetuning your ideas before you even break ground. As you create the home on paper, don’t overlook any detail. Use all the tools at your disposal—paper sketches, notebooks, photos you saved on your phone or computer, etc. Creating a clear picture of your ideas will help those in charge of building your home bring your ideas to life. GETTING A GOOD GRADE Building a home won’t be over- whelming if you let design that you’ve thoroughly researched guide you and
keep you in control of the construc- tion. Completing the design phase of building a home from the ground up should give you a sense of accom- plishment—an A+ kind of feeling! •
WRITE IT OUT ON PAPER Sketching out your home designs does not mean you need to turn to an engineer or architect first. It is not uncommon for designers to sketch their building ideas on a napkin. Just get your concept down on paper, and then hand it off to the professionals to draft your ideas. Once you move to that stage, you’ll be committing yourself to your design ideas. Having a drafter take your ideas and develop them into a blueprint that is structurally engineered for your area is a pinnacle point in the process of designing a home. Having those blueprints in your hands will feel like a great achievement. With this stage, you will be able to move onto the actual building itself. The home will start to come
Michele Van Der Veen is host of Good Day segments, including Flip It, Decorate Like a Designer, and Stage to Sell. She started her career in real estate investing more
than 30 years ago. A published author, Van Der Veen has been recognized and featured in international magazines for her unique approach to interior design. Acquiring a formal education from the Interior Designers Institute of California, her experience stems from building custom homes to flipping more than 100 homes and working in commercial real estate development alongside her father at a young age. Not afraid to push the limit on her own designs and investments, Van Der Veen will often be heard reassuring her team about her decisions by saying “Don’t worry, we are the comps!” For more on Van Der Veen’s work or to contact her, visit iHeartHomescorp.com.
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DESIGN
INDUSTRIAL
Why Design Matters for Industrial Properties THE DESIGN OF AN INDUSTRIAL PROPERTY DETERMINES VALUE AND IMPACTS YOUR INVESTMENT; CONSIDER THESE 10 FACTORS AS YOU WEIGH YOUR DESIGN DECISIONS.
By Neil Timmins
ccording to the Annual Retail Trade Survey released by
rapid growth of online shopping is a contributing factor behind the rapacious demand for industrial real estate. One and two-day delivery timelines require drivers
to deploy from fulfillment centers, warehouses, or distribution facilities near consumers. Yardi Matrix, a commercial real estate data and research company,
A
the U.S. Census Bureau in 2020, e-commerce sales increased by $244.2 billion, or 43%, in 2020. The
22 | think realty magazine :: may – june 2023
estimates that 370 million square feet of new space is needed annually in the U.S. to meet industrial demand, totaling 1.8 billion through 2026. All of this is good news for indus- trial developers, and even better news for investors who already own industrial properties. Not all industrial sites are cre- ated equal, however. In the world of industrial real estate (i.e., buildings used for warehousing, distribution, and heavy equipment operations), the design of the building plays a crucial role in determining its utility—and utility determines value. So, if you are looking to
purchase or invest in an industrial offering, you should care about how it’s designed. The following list details 10 things to pay attention to when you evaluate an industrial investment opportunity. 1. CLEAR HEIGHT Clear height is the vertical distance from the floor surface to the lowest obstruction feature (e.g., beams, lights, or ducts). Clear height can limit or expand the building’s functionality and suitability for var- ious tenants. Heavy machinery and equipment may not be operational under low ceilings. But a wide range of tenants can fill a building with tall ceilings. For example, a
business that handles materials and storage will capitalize on the vertical space for storage. Over the last two decades, tenants have consistently preferred buildings with taller and taller clear heights. Your tenant base will shrink if you need to fill an older, shorter building. 2. FLOOR LOAD CAPACITY Floor load capacity is a measure of the weight a building’s floor can safely support without failure. Heavy machinery or equipment requires a high weight load to operate. Floor load capacity ensures worker safety, enables machinery to function, and provides flexibility for future use. Building codes often require a min- imum floor load. You will lose time and money if you need to reinforce a floor with steel and concrete to meet code or retrofit a space. 3. PLAIN OLD LOOKS A previous tenant or business may have tacked multiple additions onto an older industrial facility as they required more square footage. Sometimes, these additions can turn the building into a Frankenstein of sorts. The aesthetics of the property makes a difference in attracting tenants. They do not want to conduct business out of a building that would The spacing of columns within the building can impact the flexibility of the space. Columns may be needed to provide structural support and distribute weight. But buildings that have poor column design can restrict a tenant’s ability to operate equipment like forklifts and pallet jacks. Wider column spacing, or no columns (clear span), offer increased storage capacity and make the space more adaptable. repel their customers. 4. COLUMN SPACING
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as much information as you can on how the building was designed, what materials were used, and how usable the space is. Keep the big picture in mind as you review opportunities to buy or invest in an industrial property syndication. Use these questions to get your mind wrapped around the big picture: 1 Is this building functional? 2 Is this building adaptable beyond the current tenant or business? 3 Is this building aesthet- ically attractive to customers and tenants? 4 Does this building help a potential tenant maintain property safety measures for their employees? 5 Does this building comply with the local, state, and federal codes that apply? well-designed building. That is why engineers, appraisers, and inspectors exist. Get the right people involved, and do not be afraid to pay them. You can adapt an industrial building to meet future demand. You do not need to predict the future. You just need to make the right purchase. • You cannot be an expert in all the components that go into a
5. AIR FLOW AND VENTILATION An industrial property requires air circulation and ventilation to keep the humidity and temperature down and to reduce the risk of fires. For some tenants who may desire to mitigate the buildup of harmful gasses, fumes, or dust particulates, indoor air quality is important. Some local building codes make ventilation If you anticipate significant elec - trical power use, test the electrical capacity of the property you are considering. Electrical capacity is often measured by how much power can be supplied to the building safely and reliably. A licensed and certified electrician or electrical engineer might conduct voltage drop testing, circuit breaker testing, and load calculations to test the system. 7. OFFICE VS. INDUSTRIAL SPACE BALANCE Most industrial buildings have some sort of office component, but the requirements enforceable. 6. ELECTRICAL CAPACITY balance between office and industrial space varies. You need to understand how much square footage goes to office and how much toward actual warehouse space. Keep in mind that some tenants may require more or less office space. The more office space you have, the more you limit the potential client base for your building. 8. CONSTRUCTION MATERIALS Industrial buildings are designed for heavy-duty use and wear and
tear. Industrial tenants require buildings with high-quality and durable materials to withstand their business needs. Building materials can determine what kind of tenant occupies the property. Tenants handling hazardous or flammable materials prefer concrete buildings. The most adaptable buildings are steel buildings with large clear spans. 9. PARKING LOT DESIGN On the outside of the building, note the size and layout of the parking lot. Does it have space for large trucks and vehicles to maneu- ver? Can trucks easily access the building for shipping and receiving? A property that sits on a one-way or narrow street may find that its operational ability is impded. 10. LOADING DOCK ACCESSIBILITY Just as with parking lots, make sure trucks can easily access the loading docks (if present). A well-designed loading dock attracts tenants because it enables them to optimize safety, curtail labor costs, minimize the damage to goods, and reduce injuries. Bonus points if the loading dock height is adjustable and is large enough to accommodate big delivery trucks.
Neil Timmins is an author, investor, and educator. After spending years investing in houses and $300 million in transac- tions, he graduated to investing in
PUTTING IT ALL TOGETHER It can be easy to get bogged down in the details: columns, breakers, loading docks, materials. Gather
commercial real estate. Now he educates others on how to do the same. Neil’s first book “Unicorn Hunt- ing for Real Estate Investment Companies: The Complete Hiring Funnel” was released in 2021. He hosts the popular podcast “Real Grit.”
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