EA215: A Step-by-Step Guide to Becoming an Architect Developer [Podcast]

A Step-by-Step Guide to Becoming an Architect Developer If you’re interested in becoming an architect developer, this is the episode for you! This week at EntreArchitect Podcast, A Step-by-Step Guide to Becoming an Architect Developer with Danny Cerezo of cs design. Background Danny Cerezo is originally from New York City, but moved to LA long ago. He has a bachelors in Architecture from USC and a masters from Woodberry San Diego where he studied under famed architect developers Jonathan Segal and Ted Smith. He’s a liscensed general contractor who has recently started a contracting firm with a development partner where he’s now designing and building a development project as an architect. Origin Story Hear Danny’s origin story in EA126: Successful Technologies for an Architect Startup with Architect Danny Cerezo. cs design is a small husband and wife firm in LA. In 2008, Danny decided he wanted to pursue the architect as developer route, and today the firm is split between traditional projects and partnering with developers to do their own projects. In LA, there is so much development that isn’t necessarily attractive, and it made Danny wonder why people weren’t developing things that were more architecturally significant. Through talking with others, he found a whole world of people who were architects and developers and took a leap. If someone wants to be an architect developer, what should they do? For Danny, he knew that he wanted to do it but didn’t have any money. The natural action for him was to find someone to partner with. The developer he went to work for was willing to do some smaller projects with their funds and equity. How do you show someone that you have the skills needed to take their money and turn it around for a profit? You have to learn how to walk the walk and talk the talk. What are the fundamentals of real estate development? Do you know how to do a pro forma? Can you talk about risks and potential pit falls of a project? Are you familiar with comps? Build up a base of tools and knowledge. Figure out how to convey your goals to those who you’re hoping will fund your development. Danny has written the whole process out on Medium. What’s a pro forma? It’s typically a spreadsheet that shows what it would cost to do Project X, where that money comes from, what the return will be, and what everyone gets from the project. How much are you putting in and how much are you getting out? What is the process as an architect developer? Danny suggests staying local. Jonathan Segal says, “If you can’t get to it in 15 minutes, it’s too far”. You’re familiar with what’s closest to you. Once you find the land, figure out how you’re going to borrow the money for the lot. Get as creative as you want with how you acquire the land. Once you pull the money together, give a verbal offer or letter of intent. Next, there’s 12 months to pay the financiers back through the construction loan. That means there’s 12 months to design, permit and get a construction loan. The construction loan that you get covers the cost of the land to pay back your sellers, the money for the fees, and pay for construction. Usually the bank will loan

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