OAKLEY HOME 2.0 VIDEO BLOG UPDATE 10

February 2017 Recap

This is episode 10 in a series of updates on the Oakley Home 2.0 @ 3874 Isabella project that will serve as a supplement to my other Home 2.0 Project Blog Posts.

• Topics Discussed: Property Transfer, Insurance, Construction Financing and Permit Drawings

THINKING & SKETCHING

Reading Nook Study

Despite the vast majority of modern day architectural production and rendering work being done on the computer using programs such as Revit, there is always going to be a place in the profession for hand drawing. My experience is that humans (or at least architect humans) are wired in such a way that there is an open circuit where thoughts flow freely from the brain to the hand, to the paper (or tablet in my case) where the conscious effort of drawing provides enhanced levels of feedback that are processed at a superior level by the brain. This thinking through drawing phenomenon also might explain why we tend to remember things better when physically writing them down as opposed to typing them into a device. It is that kinesthetic connection that is key, which is why when it comes to design thinking, not much can top a simple sketch. Below is one such sketch I produced today in trying to think through how the reading nook might come together in the construction of the Oakley Home 2.0 @ 3874 Isabella.

GOOD GRADES

Site Grading Plan Development

This week I received a heads up courtesy of the surveyor working on the Oakley Home 2.0 @ 3874 Isabella project, that the City of Cincinnati plans examiners have been very stringent lately in wanting to see exterior grading elevations on building plans in addition to the formal survey required for permit. That said, I spent a good amount of time in the Revit model the past few days updating the topography and generating an architectural grading plan showing this information. I also went through and changed out the concrete site wall surrounding the basement patio to now be an Allan Block site wall, which is the product that what was used for the retaining wall in front of the Starter Home 2.0 Pleasant Ridge house. The Allan Block has a nicer look and is much easier to install than a poured concrete site wall, so it makes a lot of sense to make this change. 

THE HOME 2.0 PROJECT: RE-BRANDED

Shorter Name, Larger Aim

The Starter Home 2.0 Project and Blog has its roots in what I perceived as my own personal Millennial Housing Dilemma of:

• Do I buy an affordable old house in a walkable neighborhood that lacks the amenities, energy efficiency, and durability of a newly constructed home? OR
• Do I buy an affordable new house in an isolated outer suburb that is highly car-dependent and lacks convenient access to jobs and entertainment? OR
• Is there another option? A Starter Home 2.0 option?

Frustrated with the state of Starter Home options available, I made the decision to initiate the Starter Home 2.0 Project as an effort to design, develop and build a contemporary, affordable residence in the context of an established walkable neighborhood, close to jobs and entertainment. The Starter Home 2.0 Project Blog was launched in tandem with this effort to document the project's process and progress, while sharing additional thoughts and insights regarding the Starter Home 2.0 concept. 

In the 2+ years since the initial launch, the Starter Home 2.0 Project and Starter Home 2.0 Project Blog have both become success stories, but I realize now that I underestimated the audience for this type of urban living arrangement by limiting it to Millennials and those in the market for starter homes. This is why I have made the decision to re-brand the 'Starter Home 2.0 Project' and 'Starter Home 2.0 Project Blog' moving forward as the 'Home 2.0 Project' and 'Home 2.0 Project Blog' simply dedicated to Designing & Developing the Next Generation of Home, in whatever capacity that might be.

KITCHEN & BATH BETTERMENT

Digging Into Design Details

This past weekend while giving a tour of the Starter Home 2.0 Pleasant Ridge house to a friend of the family that just happens to be a professional Kitchen and Bath Designer, I got some helpful feedback on some details for improving the aesthetics and functionality of the Oakley Home 2.0 project kitchen and half bath.
The kitchen advice has to do with the reality that most residential stainless steel appliances are only stainless steel on the front with sides and tops being a cheap looking black plastic/metal composite material. Most of the time this isn't a big deal because appliances like ranges, dishwashers and microwaves are typically enclosed by cabinetry that conceals the plastic sides, but for refrigerators that is often not the case. The original Oakley Home 2.0 kitchen design was a victim of the over exposed fridge problem, but has since been updated to enclose the refrigerator with cabinetry and matching side panels to conceal the black plastic/metal sides to the maximum extent possible. This also makes the cabinet above the fridge a lot more user friendly to access at 24" deep than when it was only 12" like the other wall cabinets. Below is a quick rendering showing this cabinetry update.

The half bath tip was to swap the pedestal sink out for a vanity base cabinet and counter top as a way to provide storage for toilet paper, hand towels and other items without having to add a clunky shelf or bin for such toiletries. By adding a 3" filler piece between the wall and the vanity base, the cabinet doors can swing open unimpeded of the casing around the bathroom doors. Below is another quick rendering of what this vanity update looks like.

FIGURING THINGS OUT

It's not about being right. It's about getting it right.

In a previous blog post I mentioned a mantra of mine, about how 'being right is less important than ultimately getting things right,' and thought I would expand on that as I've put it into practice in recent days pertaining to my quest for commercial construction financing for the Oakley Home 2.0 project, which is something I have no prior experience with (as my current home was residential owner-occupant construction financing).

So how do I approach securing commercial construction financing without any experience to draw from? The solution for me is rooted in Design Thinking and more specifically, step 4 in the process that encourages Prototyping as a way of receiving feedback, and using that feedback to improve a product offering. In my case, that product offering is a proforma and personal financial documents that aim to show banks the home construction is worth lending on and that I have the ability to execute this project as an owner/borrower.

On Monday I submitted a first draft of these various forms along with drawings, specs, and a construction budget for the home to the bank, and throughout the week had a back and forth with one of the commercial loan officers where I would receive feedback and make adjustments to the proforma to better align with what they were looking for. That's not to suggest that I did not put a lot of time, research and effort into the first draft of the proforma, but I have learned that feedback from others is often the quickest and most direct way to ultimately getting things right.  

While things have been progressing nicely on the commercial construction financing front, it is still very much an ongoing process and might not end up even working out with this particular bank based on their underwriting standards. However, even if it doesn't, it will still be valuable feedback I can use in future interactions with other banks.

Image courtesy of http://www.dthsg.com/

MIKEY BUCKS

Drawings as Equity

This week the majority of my time has been spent in communication with a local bank regarding construction financing for the Oakley Home 2.0 @ 3874 Isabella and what all that entails. This exercise has resulted in adjustments to the proforma and supplemental documentation for underwriting purposes. One of the more noteworthy supplemental documents submitted was an agreement between Oakley Home 2 LLC and Architect, Mike Benkert to provide construction drawings for a fee that will be deferred as owner equity in the development, which effectively serves as a down payment towards the construction loan. Architect-Developer Jonathan Segal refers to this drawings-as-equity currency as his 'Jonny Bucks', so I will account for my drawings as 'Mikey Bucks'.

NO GOOD DEED GOES UNRECORDED

General Warranty Deed Signed and Recorded

Today I stopped by the downtown law offices of Kohnen & Patton LLP to sign the General Warranty Deed that I hired them to prepare, transferring the Isabella property from myself to the Oakley Home 2 LLC. Following the signing, the deed was delivered to the Hamilton County Recorder's office where it was recorded. The property transfer should be showing up on the auditor's site within the next couple days and I will also be receiving a copy of the signed and recorded deed later in the week. In the end, the cost for K&P LLP to prepare the deed will likely end up totaling a couple hundred dollars or so in attorney fees, but the recording costs themselves were only $28.00, making the sum of money spent in creating an LLC, opening a bank account for the LLC and transferring the property ownership into the LLC less than $500 total (including legal costs), which isn't all that much when you consider the extra protection doing this provides. With my entity structure now in place, I can turn my focus to construction financing the rest of the week, so stay tuned for a future blog post on that process.

February 14 Update: The Auditor's website has now been updated to show the transfer of ownership to Oakley Home 2 LLC. Below is a screenshot with the updated property information.

  

THE NEIGHBORHOOD PLAYBOOK

A New Resource for Small Scale Community Development

Yesterday I attended a lecture at UC's Community Design Center given by Kevin Wright and Joe Nickol, who are the co-authors of 'The Neighborhood Playbook', which is a resource guide intended for use by both Developers and Everyone Else that outlines a repeatable series of plays for grassroots neighborhood revitalization from the bottom-up.
The central premise of the playbook is that a market for brick and mortar development can be proven far in advance of actual construction and independent of formal market studies by programming spaces prior to development for amenity activities such as beer gardens, makers' markets, or pop-up movies. This is something that almost any dedicated community group can do for relatively little cost to draw people to a particular place, showing prospective developers and investors that if you build it, people will come.

The neighborhoods where I am invested and looking to invest for future Starter Home 2.0 projects such as Pleasant Ridge, Oakley, Walnut Hills and Madisonville have all done a great job of running the plays with various pop-markets, fun runs and street festivals over the past few years and starting to reap the benefits with an influx of people and development dollars pouring into these areas.

CHANNELING MY INNER ACCOUNTANT

Cost Tracking & Projecting

There is a famous quote by business author Peter Drucker that states 'You can't manage what you don't measure.' Taking this saying to heart, I spent much of this past weekend channeling my inner accountant by creating and modifying a series spreadsheets dedicated to tracking all past and projected expenses as they relate to both the Oakley Home 2.0 @ 3874 Isabella project and Starter Home 2.0: Pleasant Ridge project. The primary reason for doing this exercise was that it provided me with accurate cost data to plug into the updated pro forma that I will be sharing with prospective construction lenders. This data includes both paid and deferred expenses (separate from the bank loan) that can be counted towards owner equity in the project, as well as projections for carrying cost during construction such as taxes, legal fees and construction loan interest payments based on adjustments to the SH2.0 Pleasant Ridge numbers for those items. Below is a screenshot showing a portion of the cost event log for the Site Acquisition and Pre-Development Phases of the Starter Home 2.0 Pleasant Ridge project to give everyone a taste for what this exercise entailed.

OAKLEY HOME 2.0 VIDEO BLOG UPDATE 9

Weekly Update for February 5, 2017

This is episode 9 in a series of weekly updates on the Oakley Home 2.0 @ 3874 Isabella project that will serve as a supplement to my other Starter Home 2.0 Project Blog Posts.

• Topics discussed: Oakley Home 2 LLC and Construction Financing

TAKING IT TO THE BANK

Business Checking

Wednesday I stopped by my local 5/3 Bank branch in Pleasant Ridge to setup a separate bank account for the Oakley Home 2 LLC business that I will be transferring funds through to the lender, builder and buyer of the Oakley Home 2.0 project. The process of setting up a new business checking account was surprisingly simple and just a matter of presenting documentation proving the LLC is a recognized entity by the State of Ohio and that I am the agent for the business, along with the Tax ID / EIN number associated with the LLC (which is filed for through the IRS website and takes about 10-minutes to complete). 
The only cost I incurred with setting-up the account was $29 for a new checkbook for the business, which should be arriving within a week or so. With this step complete, I am now able to start transferring funds and property into the LLC and can get things moving forward with the lender, builder and building department.