WEBSITE SNEAK PEEK

Oakley Home 2.0 Website Preview

I recently started developing an interactive website to help serve as a sales tool for the Oakley Home 2.0 project and below is a sneak peek of what the format is starting to look like. The rendering shown is just a placeholder for now and will be updated as I continue to add content to the site.

OAKLEY HOME 2.0 VIDEO UPDATE 2

Weekly Update for October 29, 2016

This is the second of a series of weekly updates on the Oakley Home 2.0 project that will serve as a supplement to my other Starter Home 2.0 Project Blog Posts.

• Topics discussed: lot clearing , geotechnical report, insurance, builder kick-off meeting

DE-CLUTTERED

Yard Waste Removal

This weekend I made a call to 1-800-Declutter to get a truck to come out to the Oakley Home 2.0 lot and remove a pile of tree limbs and debris that had piled up on the site and was in the way of areas that need to be surveyed and dug up for test pits to examine the soil conditions for foundation design. Now that the site is clear, I'll look to see when I can schedule these activities to take place.

OAKLEY HOME 2.0 VIDEO UPDATE 1

Weekly Update for October 22, 2016

This is the first of a series of weekly updates on the Oakley Home 2.0 project that will serve as a supplement to other Starter Home 2.0 Project Blog Posts.

TAKING ON LEED

Oakley Home 2.0 LEED Certification

In preparing to build the first Starter Home 2.0 project in Pleasant Ridge, one of the items I spent a lot of time thinking about was whether or not to pursue LEED Certification (which was the topic of a previous blog post). Ultimately, I decided with it being my first time going through the homebuilding process and having so many unknown variables to consider, that it was not in my best interest to follow through with certification at the time.

However, now that I have a project under my belt and more familiarity with the people and process involved, I have made the decision to get the Oakley Home 2.0 LEED Certified. The first step to doing this was to get the project registered through the USGBC website, which basically just requires filling in some basic project information and paying a $150 registration fee as a USGBC member.

The next steps are hiring a LEED Green Rater for the project and determining which credits we are going to go after. I'll be make to cover all this in future posts, but for now, anyone interested in tracking the progress of the LEED Certification, can click here.

SITE WALK THOUGHTS

Informal Site Analysis

This past weekend I took a trip over to the Oakley property to take down some of the weeds and overgrowth that had accumulated over the summer months. However, in the process of doing that, I also took note of some of the existing conditions that need to be addressed in order to move along with getting the Oakley Home 2.0 project built. 

The first order of business will be getting a geotech company out on site, similar to what was done with the Pleasant Ridge property to do a soils engineering study and recommend the type of excavation and foundation system required for the building. This is especially important with the site having been built on previously with some of the existing foundation work still appearing to be in the ground and likely needing to be removed. The good thing with the drawings having been completed at this point, is that the geotech company will know where to dig test pits based on where the new home will be located on the site.

I used my 100' measuring tape to compare the site plan dimensions on my drawing with existing conditions 

Another task that will need to be taken on is removing clearing the site of the piles of tree limbs and yard waste so that a site survey can be completed, which is a requirement for obtaining a building permit. The survey is also the most accurate way to confirm the existing site grading, which is important when it comes to establishing the finished floor elevation and how that relates to access to the garage and access out of the basement.

The final site related task is going to be having one of the trees on the property removed. With the new house plan and rear deck extending further out into the backyard, it became apparent that a tree on the northern edge is in direct conflict with the new building mass and will need to be taken down. This same problem existed at the Starter Home 2.0 Pleasant Ridge house as well, so I feel like I have a pretty good idea of who can perform this work and how much it will cost me.   

The first tree on the left hand side of the lot is the one that will need to be taken down

THE PRO FORMA

Oakley Home 2.0 Pro Forma Overview

This past weekend, I was able to complete my Assembly Cost Construction Estimate for the Oakley Home 2.0 Project, which while a critical step in the development process, is only a small part of the overall project pro forma. So what is a pro forma you might ask?
A pro forma is the single most important document for any real estate developer. With a literal meaning in Latin of 'as a matter of form', the pro forma is a spreadsheet that lists a series of assumptions and projections regarding anticipated acquisition costs, construction costs, development costs, expenses (including utilities, maintenance, taxes and insurance), income from rents and the eventual sale price of the project.
With the Oakley Home 2.0 currently being developed as a for sale market rate home, the pro forma I have been developing does not take into account the rental component that other development projects like my thesis did, but incorporates all the other areas mentioned. Having past projects to reference with the Pleasant Ridge house and several other new homes I worked on while a construction manager for Cincinnati Housing Partners, I feel like I have a pretty good grasps on the overall development costs and unlike the first Starter Home 2.0 project in Pleasant Ridge, Oakley actually has quite a bit of new homes being constructed throughout the neighborhood, which provides for good comps in determining the eventual sales price of the property upon completion. Below are some screenshots from my in progress pro-forma to give an idea what the format looks like (I've left number values left blank for the time being)

ESTIMATED OUTCOMES

Assemblies Cost Estimating

In my 'Looking Forward' blog post back in August, I tagged October as the month where I would be focusing on developing a construction budget for the Oakley home. I decided to attack this phase on a couple of different fronts. The first being on the contractor end, where I recently sent out drawings to my builder for pricing and to identify any potential construction issues I might be overlooking. The second being on my end, where using the Revit model, RS Means cost data software, and some modified spreadsheets from my thesis project, I am developing my own construction cost estimate (to better understand the process and pricing in more detail). I'll follow up on the contractor estimate in a future blog post, but below is a bit more about what all I am doing as it relates to this exercise.
Construction Cost Estimating is traditionally broken down into three different levels of detail ranging from square foot cost estimates (the least detailed), to assemblies cost estimates, to unit cost estimates (the most detailed). For my purposes as a real estate developer, I like to stick with the Assembly approach to estimating, which is a happy medium that calculates costs based on a combination of individual components that come together to make a system. A classic example of this being the drywall wall assembly, which groups together sheets of gypsum wall board, finishing tape, baseboard trim, and paint in a single cost per square foot line item that can be quantified and plugged into the assemblies cost estimate spreadsheet, rather than needing to account for each of these items individually (which is what the unit cost approach requires)
Below are a couple images that show the breakdown of the drywall cost assembly as described by RSMeans online and how Revit is able to do square foot takeoffs by selecting individual assemblies, which can also be scheduled.

Overall, assemblies costs are distributed across 9 different categories, which together combine to create a total hard cost construction budget, that will be plugged in as a line item in the master pro-forma spreadsheet, which will ultimately be used to finance the project. Below is a list of the 9 Assembly Cost Categories along with a sample breakdown of the Site Work category for additional reference, and be on the lookout for more blog entries on the entire estimating and financing process as it relates to the Oakley Home Project.

• Assembly Cost Categories: (01) Site Work, (02) Foundation, (03) Framing, (04) Exterior Walls, (05) Roofing, (06) Interiors, (07) Specialties, (08) Mechanical, (09) Electrical

NOT WHAT THEY USED TO BE

Article: What Happened to the 'Starter Home?'

I've linked and commented on different articles about the Millennial Home Buying Market and Starter Homes in the past, but this one from MarketWatch.com, titled 'What Happened to the Starter Home?: Why They Aren't What They Used to Be', stood out for one specific reason. It was the first piece I have read that re-framed the Starter Home as a potential first and last home. That doesn't mean to imply that first time homebuyers should be searching out the home they plan to ultimately die in, but it does point to a growing trend (backed by National Association of Realtor research) that rather than buying a starter home and planning to upgrade in five years or so, first-time homeowners are buying and staying put.

“When they do purchase, they’re planning on living there longer than buyers that we’ve seen in the past,” says Jessica Lautz, NAR’s managing director of survey research. “They’re expecting to live there 10 years.”

Another survey referenced in the article, conducted by Bank of America in early 2016, went on to find that 75% of first-time buyers would prefer to skip the starter home stage and find a house that meets their present and future needs. Finally, more than one-third of those surveyed (35%) said they intended to be “one and done” — actually planning to retire in their first home. Sounds to me like we might be entering the age of the Starter Home 2.0.

New rendering of the Starter Home 2.0 Oakley Interior