Lecture Notes: Building New Construction

Key Points

• Advantages and disadvantages of building a new construction property.
• Personal experience of building a dream mansion, incorporating lessons learned from previous projects.

Advantages of New Construction

• Customization:
  • Ability to design the perfect property with practical considerations such as accessibility.
  • Example: Designing a dining room to accommodate elderly family members in wheelchairs.
• Profitability:
  • Opportunity to command high market prices.
  • Example: Potential to increase income significantly with new construction.
• Efficiency:
  • Easy operations with purpose-built facilities.
  • Improved staff satisfaction and retention.
• Zoning Assurance:
  • Avoiding zoning surprises by upfront planning and compliance.
  • Developing a reputation with local authorities for quality projects.
• Predictable Budgeting:
  • Fewer surprises during construction due to thorough planning.
  • Potential for smoother project execution.

Disadvantages of New Construction

• Land Acquisition:
  • Difficulty finding appropriately zoned land.
  • Land might be scarce or expensive in some areas.
• Complex Planning and Zoning Process:
  • Intimidating and potentially restrictive processes.
  • Higher costs for architectural and engineering planning.
• Utility Connection Challenges:
  • Uncertainties in connecting to city utilities.
  • Additional costs for meeting fire safety standards.
• Higher Initial Costs:
  • Increased upfront expenses for land and planning.
  • Need for substantial down payments and possible capital raising.

Considerations for New Construction

• Site Selection:
  • Look for land with appropriate zoning, utilities, or potential for development.
• Work with Experts:
  • Collaborate with architects familiar with state and local codes.
  • Engage civil engineers for site-specific assessments.
• Financial Planning:
  • Ensure plans align with budgetary constraints and market viability.

Comparison: New Construction vs. Conversion

• Time:
  • Conversions can be faster, but not significantly so.
• Cost:
  • Similar cost per square foot, but new constructions are more profitable.
• Zoning and Operations:
  • New constructions offer better operational efficiency and fewer zoning hurdles.

Personal Reflection

• Experience:
  • Transition from home conversions to exclusively new construction.
  • New construction as a means to achieve personal goals like time freedom.
• Strategic Partnership:
  • Aim to guide others through the process of building new constructions.
  • Creation of resources to help others avoid initial pitfalls.

Conclusion

• New construction provides the best outcome for profitability, operations, and personal goals.
• Importance of thorough planning, expert collaboration, and financial strategy in new construction projects.
• Encouragement for others to consider new construction as a viable and profitable option.