Today we speak with Lance Cayko and Alex Gore, partners at the architecture and design firm, F9 Productions Inc based out of Longmont, Colorado. These guys are great examples of the entrepreneurial spirit. Since starting their firm in 2009, they've grown both the size and scale of the projects they work on, including a current project where they are actually developing themselves. Today, we talk about their latest development project.
In today's episode of the Business of Architecture show, you'll discover:
- Rules for developing your own projects as an architect
- The '15 minute rule' for developing your own projects
- The plan and their details for their first multi-unit development project
Resources for today’s show:
Interview Transcript and Members Only Resources:
Speaker 1: Every time there's a problem, I would say directly look square at it and try to get down to what fundamental is happening there.
Speaker 2: Business of Architecture episode 201.
Enoch Sears: Hello I'm Enoch Sears and this is the podcast for architects where you'll discover tips, strategies and secrets for running a profitable and impactful architecture practice. I'd like to invite you to discover how to double your architecture firm income and create your dream practice of freedom in impact by downloading my free four part architecture firm profit map. As a podcast listener you can get instant access by going to freearchitectgift.com.
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Today is the second half of my interview with Lance Cayko and Alex Gore, partners at the architecture and design firm F9 Productions, based out of Longmont, Colorado. These guys are great examples of the entrepreneurial spirit. Since starting their firm in 2009, they've grown both the size and scale of the projects they work on, including a current project where that they are developing themselves. So today we talk about their latest entrepreneurial venture: a mixed-use town home development where they're acting as the developer, architect, and builder. You'll also get to hear Lance and Alex weigh in on some of the best career advice and worst that they've ever gotten. Let's get down to business, here's today's show.
Well let's talk about this development project that you guys are involved in. Let's jump into that now, tell me about that.
Alex Gore: Yeah, so we have a couple rules, and then one, I think it was from Segal is basically do a project within 15 minutes of where you are. When we built the tiny houses, the two newest ones, they were about 40 minutes away, wasn't too bad, but it was a stretch, and it was kind of, there was a tight deadline so it was really lenient on family time, and I just had my baby then. And the baby even went to the hospital for a week, so it was just, it was pretty crazy. So we're doing something really close, it's probably five, six minutes away, and then do something that we're extremely comfortable with.
So we've done a whole bunch of town homes, so we're gonna do a town home. And we're doing, you know, six units on one side, two units on the other side, and then our office. So it might look to maybe some investors and some other people as a big project, but town homes we're gonna stay in the IRC. And you can do single-family duplex and town homes as long as they're structurally independent. So the foundation touches, but everything else is independent and the roof. So when you do custom homes, you know, which we also do, you know, two, three thousand, four thousand square feet, different levels, you know, more richer clients like more advanced things. It's actually pretty complicated. When you do a 20 foot wide by 36 foot deep town home that's a box, and, you know, you do your modern touches on all that and you repeat that eight times, that's actually way simpler than if you were doing this bigger home because once you nail it you're good to go.
The other thing is that the two tiny houses that we did, the new ones, if you've seen … you can go to Atlas Tiny House sets, the one from a couple years ago, but it has a fold down deck and a fold up awning, which was hard enough the first time. Well, and it was only halfway, so it split the height of the wall, so they deck was, you know, only half as tall and the awning was only half as tall, and there was a glass wall behind it. Well these new clients wanted that, but they wanted the full deck, so the full, you know, eight to 10 feet to come down and be a deck, and then the full 10 feet to become an awning, then they wanted that on the other side.
Lance: And these were going to be used up in the mountains, so the snow load tripled, and so the structure, the weight that the structure tripled, so just the feasibility … I mean we had to like, for that project we had to get a crane and it was crazy.
Alex Gore: And then they said, oh on the roof can you make a sky deck that folds down, so that when we're moving it, you know, the wind doesn't go, and then we need railings up there so those all need to fold. Oh and then we need a detachable stairs that also fold, so that the railings also fold, and then that times two. So when I'm looking at this town home I'm thinking, ho, this is gonna be a piece of cake[crosstalk 00:04:45].
Lance: No moving parts. But the big picture of why we're doing this is this kind of harks back to college as well, when Alex and I were in architecture school, I never understood why architects would not want to at least try doing developments on their own once. So that they a, could completely control the project from a design standpoint, but b, if you do that, you know, we are trying to wear three hats with this project. We're the developer, we're the contractor, and we're the architect. So the idea is we're getting paid three times, and that goes back to like learning from Jonathan Segal and what he does. He's in complete control of the situation, he's obviously, he has a greater risk on the project, but with greater risk becomes greater rewards, so we do love our clients right now, but at the end of the day the more work we can be in control of for us is where we want to be.
Alex Gore: Yeah. Because then we only have to deal with our egos and the city.
Alex Gore: Instead of our egos, the clients, and the city.
Lance: And Alex says I'm hard enough to deal with as it is, so.
Alex Gore: Yeah, right, it's tough enough with you, so.
Enoch Sears: I can tell. Hey tell me about the process of buying and acquiring that land.
Lance: Yeah, so we started looking for land last year, at the end of last year because we knew that we were going to be done with the second tiny house build. I was also licensed for about a year, and we knew that we would, you know, for what we wanted to do we should probably be licensed because it would be a multi-family project. So we started looking right next to our office within a half a block. That piece of property never came to fruition because the money we would've had to put up was just too much, so my fiancé, our real estate agent and she just kept on the hunt. Another piece of property came up and it was about a third of an acre, and this was our first lesson in cash is king. So at the end of the day our goals after this development project is save as much cash as you can so that we can be the cash buyers on whatever next piece of property we want. So we put an offer in on the piece of property that we eventually got. Our offer became the second offer, and the first offer, the first person who bought it, they came in with cash and they, you know, why wouldn't a seller take a cash deal?
Alex Gore: They were even lower than our offer.
Lance: Yeah, they were even low, we actually offered, I don't know, 10, 20 thousand more or something like that. There was an escalation clause in the contract. So somehow over the next six months, maybe three or four, something like that, over the next couple months the person who bought that piece of property, they put it back on the market. Well they actually didn't put it back on the market, what they did was, the guy who bought it just became physically not able to do whatever the heck he was gonna do, and so he wanted to spend his time doing something else. What was great about that, he and his real estate agent was, his real estate agent got in touch with our real estate agent before they even put it on MLS and said, “Hey are your guys still interested in the property at the price they originally offered?” And we said yes. So it was good to be a back up offer. It never got put back up on MLS and thank God it didn't because I'm not sure we would've got it. Right now the Denver real estate market is incredibly hot. I think we're number two in the nation, number one is Houston, so land prices are just through the roof. And so we got the land for what we wanted it for, but we did have to take out a loan to do it.
Alex Gore: Yep, and to go into some of the nuts and bolts about getting lending is that some people think that you really can't get land loans, you got to pay for it all in cash. And the reason is because most banks, your Wells Fargo, your, think credit, most banks don't really do land loans. So you have to find a specific one that does it. Another reason people don't think you do land loans is, just think for residential for doing your own house, a lot of the times you don't buy the land because you can't pay for the whole thing, so you're paying, you know, 20 percent and then you have a mortgage on it, right? Because you have to pay the rest of it. And that, even on something like 100,000 dollars might be 500 bucks. Well if you're just one person, that 500 bucks is a lot, you know, especially if you have college debt and all that. So I had, Lance is like, “Oh we got to save up enough for the whole land.”, I go, “No we can get a loan for this.” So there's a lender here and they said yes, 20, you know, you need 20 percent down. So we had to make sure that we had 20 percent down.
Lance: Actually it was 30.
Alex Gore: Oh it was 30, yep.
Lance: It was 30.
Alex Gore: Yep, 30 percent down, so save up enough money for that and kind of know what you're looking for. And then we did something, it was a balloon payment at the end. So it's a three year loan, which means every month we're only paying about 1,000 dollars, which our firm can handle that, right? And then at the end we had to pay a balloon payment of, you know, who knows, thousands and thousands of dollars, but hopefully in three years everything should be sold, so that's fine. So that's how you kind of do the math to make that work is save up 30 percent and then do the balloon payment at the end.
Lance: And you have to get lucky and find, you have to have a land, somebody that lends land in the capacity that they are for us where, they do the three year deal because they're lending to developers because they think, okay, it should take you a year to get through the city, you should build for one year, and then you start selling the year after. But it was, we only know of this one entity in Colorado that does this, so, we know, and they're in the town we're in. We're actually north of Denver by about an hour, so I don't know. It's hard, but at the end of the day I think anybody who's thinking about doing this, cash is king even at the lending level. And that probably, you know, that might get overlooked by people.
You can't just, we, I have a lot of clients that come to me and they say they want to build a new house, and the first thing I ask them now is as I start to vet them and say, “Do you have land purchased?” And a lot of them don't. I mean they just don't, a lot of people do not realize how important it is to have land purchased. Like you can't go to a bank and say, “I want to build a new house plus I want to buy the land.” They want to see a certain level of skin in the game. So for us we always knew it was the biggest hurdle is, if we just get land I think we can make everything else work. It's gonna be an uphill battle, up a mountain every single day for three years, but if we can just get the land we're on the right track.
Alex Gore: Yeah.
Enoch Sears: What's the interest rate you guys are paying on that note?
Lance: Oh, I think it's above 10 percent.
Alex Gore: Yeah.
Lance: I think it's around the 12 mark. Yeah, it's pretty steep, it's pretty steep.
Enoch Sears: And explain to me this lender so other people who are looking for a lender like this, you know, what does this person or this entity like so they can find someone like this?
Alex Gore: Yeah, so if you're in Colorado, they're Centennial Lending, but I literally just had to do a Google search for land loans.
Alex Gore: And they're sort of like, I would say they're a lending, but they don't have, they're not a bank. So they even made us get an account at a local credit union that they work with, so they just, you know, if you were just searching for like bank loans that's probably not gonna, in whatever town that you're in, that might not even hit on the Google search and you might not think that it's in there. So search land loans, ask real estate people too if they know, and then some of them might say, “Nope, you can't do that”, but that's just because it's not done that much. That doesn't mean that you really can't do that.
And then when you're looking at land to vet which one to buy, we've always heard all of your construction costs and all of that, how much do you think the project's gonna cost you? Land should be under 18 percent. And the other thing you can do is that you can go on your GIS or look through your county data and you can see similar projects, and then you can look and see how much they bought the land for. So if they bought this huge plot and they're going to do 50 units, and then it turned out, oh, it costs them 40,000 dollars per unit, per land, we're doing a smaller thing but it only costs us 30,000 dollars then you're going okay we should be safe, too. Because I don't know about different areas, you know, California is probably crazy, depending on where you are in California too, valley versus L.A. versus San Francisco it's all gonna change.
Enoch Sears: So this lot of land you guys are, is it, have you broken ground on the project yet? Where are you at right now in terms of the project?
Alex Gore: We're in site, well we're not even in site plan review, so we had our pre-application meeting and then the city gave us back all their comments. Then we had to do a neighborhood meeting.
Lance: And we had to do the neighborhood meeting because we're doing a conditional use on the project. So right away they want to see [crosstalk 00:13:34]
Enoch Sears: Conditional use?
Lance: Say that again.
Enoch Sears: What is true during the conditional use? Is it the mixed use?
Lance: It's a commercial, the lot is zoned commercial, but it has the ability to be residential so long as [crosstalk 00:13:47]it's mixed use. So it's eight condos, just to repeat, it's eight condos and then our headquarters, our office building, so that's what throws it in. So, you know, residences aren't typically going to be there. So that's kind of where we're, we're not pushing the envelope, but that's where we're going with it. So Alex had to present, and I took notes, we had a community meeting. There's only three citizens that showed up. They actually really loved the direction of it and everything, so we're on to the next phase, and the next phase is we are going to get everything ready for our site plan development, right?
Alex Gore: Yeah, site plan review. So we're getting all of our civil, landscape, you know, the architecture. You basically have to do the majority of the building. The only thing that you don't really have to do is you don't have to show floor plans, and you don't have to do all the CD set and the structural set. But you can't show the elevation, the heights, what all the materials are, where all the windows are without doing floor plans. So you're literally designing everything and making sure it works.
Lance: And there's a few other costs that I think everybody else should be aware of too if they're thinking of going down the development road. So land is one thing, but then there's also out-of-pocket costs that are gonna come, so we had to pay for an environmental analysis. There's a company that had to come out, they had to test the soil and see if it was a brownfield site. One other one that the city, we got waived from our local jurisdiction was they wanted us to do …
Alex Gore: Habitat species conservation plan.
Lance: Yeah, and it is a blank, this is a blank, your typical blank city lot, there's just …
Alex Gore: In the middle of the city.
Lance: I mean there's no, there's nothing on it. There's a couple trees tops, but they were like the garbage trees, you know?
Alex Gore: There's not even gophers, and we told them this. And they're like well we need someone professional to tell us that there's not even gophers.
Lance: So there's that out-of-pocket cost that might come, and then there's a survey. You gotta get a survey done. You're actually gonna have to get a survey done before you purchase the property typically because they need, you know, in the case of us for a land loan, they wanted to make sure that it was a legal piece of property and there was a legal description so they could take it to their investors and that we could do the deal.
Alex Gore: And make sure, because this should have been done on our side and we should have known, make sure it's technically an ALTA survey. You can ask your city if you need it, but ALTA is basically what the real estate people need too. Not every time when you ask for a survey they might not do the extra steps to make it that survey, so we're gonna go back and do it and it'll just be a little bit extra expense and all that. But just know, if you are looking at a land, maybe look through what the city needs, and then for the survey, I almost think that's the professional standard now, but just make sure you're telling your surveyor that that's what you want.
Lance: Geo technical, a geo technical report is gonna be needed. A lot of jurisdictions that we deal with now in Colorado are actually requiring them if you are doing something conditional use, or you are doing something, or you're trying to add something to the zoning. Like you're not going for a full-blown rezoning, but just add something to the zoning, because they want to, the city wants to know, you know, let's say you want, you're proposing to put on a big commercial building that's like 10 stories tall, right? They want to know that the soil can support it before they even allow you to get to site plan development.
Alex Gore: Well, and then I was trying to figure out why they wanted it besides that because for a site plan review it shouldn't matter. You know structures doesn't even come yet. And what they wanted to know also was where the water table was because they wanted to know, because all of your civils are going to be done, they wanted to know if they were going to have to do an under drain report. That would have cost us a couple of thousand dollars. A
And I was meeting with the city and they said, “Op, you have to do an under drain report.” And I go, “Well the water table, you know, we'll see, but the water table should be close and you don't have to.” If the water table's going to be closer to the foundation because you don't have to worry about what's going to happen there. They said, “Well, are you doing crawl spaces?” I said, “Yeah, we're doing crawl spaces.” They're like, “Well you're doing something under grade, you have to do it.” And then I go, “Well let's bring up the city code.” And it was habitable spaces under ground. So habitable, okay that's seven foot, you know, and also it's usually filled in by gypsum, and that's what defines a habitable space. And they're like, “Oh yeah, you don't have to do it then.” But if you didn't know that like that's where you can get stuck with, op there's another 2,000 dollar expense …
Alex Gore: That you have to do just because the codes are so complicated. You know there's so much to know and even though the city should know it, now I'm discussing with the city. They mentioned in our neighborhood meeting that our setbacks need to be changed. He mentioned this rule that for every two and a half foot in height you have to be one foot away from the property. I'm like oh wow that's really going to mess up our project. And I'm double checking the code and that's a residential standard, but we're in a commercial district. So you know, there's always these plays and it could get quite tricky.
Lance: So I think those are the, and then I've had a client recently, where we're, they're also a developer and they are kind of doing what we're doing in the sense of the way it's going through the city. The typology of the project is different, but the way they've structured their land deal is it's structured like they won't purchase until they know that it's going to be rezoned. That's kind of made everybody edgy from the seller's side of everything, and rightly so because there's a lot of money riding on it, but some of the extra expenses that they've had to incur are civil engineering, more surveys, and then all the architecture and engineering fees. So I think the other idea about architects doing developments on their own is that if you were giving a lot of work, repeat work to, and referring other engineers that you work with constantly, I would hope that there would be, you could get a better fee from them on your project because there's just this good old boy relationship back and forth. Whereas I'm not sure a lot of developers could have that kind of advantage. So, you know, knowing that you're gonna have to do all these, make possible extra expenses up front is one thing, but I think there are ways that we're going to be able to save money that other people might not be able to.
Enoch Sears: So not including the land, what's your estimate order of magnitude for the money out of pocket that you guys have had to come up with when you look at the geo tech reports, when you look at the survey you had to do, some of these other unexpected things that you weren't necessarily planning on, you know, what are we talking in terms of?
Lance: So this is a small project, but I think we'll be at least 30 to 50,000 dollars not including land.
Alex Gore: Yeah, including all of the engineers once it's said and done.
Lance: It will match, and to put it in perspective this is on a third of an acre and I think, what's your current estimate for construction costs? 1.2 million?
Alex Gore: 1.2.
Lance: 1.2 million yeah. So we had to put in about 60k to get the land, and we think we're gonna have to put in another 60k to handle all the other engineers, all the other stuff that we talked about, not including our fees. I mean the idea is that at the end we recoup our fees at the very end. Some interesting things that we've learned from banks so far, and we've only had two meetings with banks so far cause we're just taking this step by step, but Jonathan Segal is 100 percent right in that if you come with a set of approved drawings they treat it as cash, which is incredible. So you can treat that as an asset, so not only are, the bank will recognize in a reasonable percentage of the construction cost that you could defer getting paid for those fees in lieu of, okay do you see that as like this is part of our down payment to get the construction loan?
Same thing goes for a developer fee. You can charge a developer fee on top of your architecture fee and defer that cost, and then the same thing for a contractor fee. So as a first time developer we are hoping that all three of those things, which we want to equal 30 percent if you add them all up can go toward us not having to have as much cash as somebody else would when we go for the construction loan.
Alex Gore: Yep, so if you take 1.2 mil, let's just say a million dollars just to be easy, and let's say you have to have 30 percent, so that's 300,000 dollars. And with a development like a million dollars is actually low, so people are probably talking in like the two million dollars, so maybe like close to half a million dollars in cash. So one of the things that we're gonna try to do, and we think that we can do from contractor costs that can easily be anywhere from 10 to 15 to 17 percent, when we're gonna do it, we're gonna do it basically at cost. So instead of charging, you know, a specific price or marking up all the materials and having a profit, we'll charge, you know, just 25 bucks per hour just to feed it. It's literally no overhead, no profit in that whatsoever. And then that extra, you know, 200, 300,000 that the contractor would normally get, we delay that to the end and that counts as our cash input. So then, you know, that takes care of at least half of what we have to bring to the table.
Lance: So we do think we are going to have to raise several, you know, a fair amount of money when it's all said and done no matter what.
Alex Gore: And Enoch, he told me that he'd do that all at a low percentage rate. He said five percent Al, you can have the cash.
Lance: Wow, that's crazy, that's crazy. Good guy. But yeah so we have started talking to investors. So I think, you know, the ideal goal is you eventually are able to wear one more hat and maybe after this first deal to where you're also the cash investor. So now you're wearing four hats, and again you're taking more risk but then the return comes back four fold instead of three fold.
Alex Gore: Yeah, more risk, more return.
Alex Gore: More responsibility.
Lance: More return.
Enoch Sears: And so you guys have started talking to a couple banks yet, but you haven't actually started the process of getting financing for the project.
Alex Gore: Correct.
Enoch Sears: You're gonna do that when?
Alex Gore: Pretty soon here, probably in a couple of weeks. We met with one person that might be a heavy investor, and then honestly there's three to four reputable online fundraising. And I'm not talking about Kickstarter, I'm talking specifically for real estate that we might also pursue for some of that.
Lance: What's cool about them is, again like if you're an architect doing this you have complete control over he marketing, right? So you could spend you own time and your own effort and your own money getting, putting the renderings together and selling the project, maybe doing an animation of floor plans and stuff. Put it up online so, you know, that's where it comes I really think like the sex could sell your project, right? Because you're creating these really cool spaces and this great architecture. So, you know, I don't know, we're nervously excited to go down that road of how are we going to finance this thing. But like I said the biggest at the beginning, or with the beginning of this conversation was gosh the land was the hardest part. I just know that was, you just had to get the land secured and it'll happen, I know it'll happen.
Alex Gore: And another thing is no matter what you're doing, I don't think you can predict and know how to do everything. So even Elon Musk with, you know, creating rockets, of course he's a genius and will figure it out, but there's something to entrepreneurial where it's sort of like a blind ignorance where you just kind of go in hoping, and as long as you know and can handle the first step, then you're hoping that you can handle the second step and the third step. And then of course with us and a lot of people too is that okay this might be a new route, but it's not like it's not anything that we haven't done. It's not like we haven't designed many of these. It's not like we haven't built a lot in our past. It's not like we haven't had management skills and all that. It's just you're combining them in a new route. So know that there will be this fog of war, and that's where the term comes from, but that doesn't mean that, you know, war isn't gonna happen and that you shouldn't take that leap whatsoever.
Lance: Yeah, and I think any other architects who want to jump into this development scheme, it would behoove them, I would hope that you have good relationships with the developers that you're working with so it would behoove you to not just go out and take that developer out for coffee and say, “Hey I'm thinking about doing what you're doing.”, and just ask them as many questions as you can about the business side of things. And we've had no problem with getting those meetings and they've had no problem telling us all the information at the end of the day and what we want to do. So that even goes down to one of the developers we work with I said, “Hey who sets up your HOAs? And how do you set up your, the construction side of contracts and everything with the buyers of your product?” And he goes, “Oh, I got the perfect lawyer for ya.” So now we're gonna meet with his lawyer and he's gonna help us setup the HOA, you know, cause condos are high risk so we want to be, we want to have, make sure everything's secure in that way. But I don't know.
It just kind of goes back to I don't think it ever hurts to ask anybody you're working with those kind of questions. And then the final thing about, you know, learning from other developers is if you're working with them you already know the whole process. You should at that point know the whole process of what it's gonna take to get through the city, especially if you're the architect and the umbrella of everybody else is underneath you, you know, all the other engineers and stuff have been hired. You've seen exactly what the heck the city's gonna ask for better or for worse and how you can fight back about some things and say, “Hey do we really have to do this environmental, this habitat thing?” “No, not really.” “Okay, good” because of previous experiences on other projects where the other developers have tried to, you know, reduce those things from the city.
Alex Gore: Yep. And then also if you've met developers, I'm sure they're smarter than, you know, all that, but I don't think a lot of architects think that these developers are out of their league. I don't think this is an intellectual knowledge based thing where you can't handle, because I think our society is action-based society. It's not only an intellect-based society, so you need to point your actions in that direction and then just reduce and close that feedback loop.
Alex Gore: So know the clients and the faster that you can close that feedback loop and just keep iterating on that, especially for the things that you don't know, people, especially if you've been a good architect helping other people, they'll give you that information. They'll tell you about fees, they'll tell you about whatever. So just know that. I really think it's action orientation and getting that[crosstalk 00:28:51] closer.
Lance: And those developers might even want to be investors in your project. That's the other thing. If you are doing, if they already believe, they've already hired you and believe in you as the architect that you're gonna help them create products that they can sell for profit. So if you're taking that approach with your project I would venture to guess that some of them would potentially even want to be investors on a capital side.
Alex Gore: And some of ours are on the south side of Denver while we're on the north side of Denver, and if you're, it's a big enough city where that's an hour and a half away. There's no way we're, I'm never doing anything down there, you're never doing anything up here, so it's not, you're not really competing.
Enoch Sears: Okay so in terms of investors, what kind of deal are you looking at and to close that gap in the funding that you're gonna need, cause you're gonna need some extra cash for this deal. Have you started talking to investors, and if so, what kind of terms are you guys thinking is gonna work to make that, close that gap?
Alex Gore: So there's two different ways you can approach it. You can get a hard money lender where that's all they're doing. They're just giving you money and within a year they want a return on that, or maybe even a two year on a bigger project. And then there's a partner. The partner is where we're trying to avoid because the hard money lender we're hoping that we can give terms at around 18 percent of whatever cash you get in. So you give us the cash, you sit back, you're gonna beat the stock market, here you go. Easy, easy money.
The partners will probably want a percentage of the profit, and if you can only get money that way that's all what you can do, but they can cut into that profit. I've heard numbers up to 50 percent, 30 percent, you know, that's huge, and especially when if you're doing it our way where you're carrying all these hats and you're leaving the profit for later just to make sure like this is fool proof. Even if the market drops your money is not at risk. And even with the hard money lender, what basically happens is that the hard money comes up first. So let's say Enoch you gave 100 and we put in 100, okay, so that comes out first no matter what, and then the 18 percent comes out after that. So everyone gets their actual dollars back, you know, to quote Shark Tank, you don't want your money soldiers to die. So at least you're guaranteeing that that comes back.
Enoch Sears: Nice, let's get more of those money soldiers working.
Lance: Yeah, absolutely.
Enoch Sears: All right guys, so very cool. Well that kind of wraps it up for today. You know, you did say you sent me a copy of your book, but it came back to you. Tell me about the book Alex.
Alex Gore: Yeah, so the book is called The Creativity Code, and basically we not only teach architecture students, we teach engineering students at CU and we are brought in because they have to do design project at the end. And basically they were doing it as an engineer. They were making a whole bunch of boxes that were very efficient, and the program saw that and said, “Well that's not how the real world works.” And what happened is like we do, like you do, is you try to give out all this information. So we gave these engineering students, you know, our, basically our whole firm's resources, we gave them a template, we gave them all the architectural Legos that you could ever need, and they created some truly amazing stuff. We'd had the architecture professors come over and they'd say, “Man I want these kids in my third year studio, like what grade are they in?” Like these are freshmen that have never designed before in their life and that's why they want to be engineers.
So what we did is we put those lessons and then other lessons in that book to kind of unleash the creativity through what people don't think is, they don't think they have it, but the power of visualization just writing things down, knowing how to sketch, knowing how to think visually can unleash so much potential that I think people naturally have in them. People learn visually, people see visually, you know, a picture's worth a thousand words. So even those people who don't think that they're creative, I think once they just are given some just common tools, some common thoughts and talk about the architectural process, and talk about, you know, aligning and grouping, all this stuff that we're very familiar concepts in architecture, they can be applied in visualizing a whole broad range of subjects that, you know, a lot of times architecture tries to take stuff from other industries, from the medical industry and engineering, I think we have stuff to offer back to the rest of the world too. And that's kind of what the book is about.
Enoch Sears: Well just to wrap this up guys, why don't you tell me your answers to the two questions you sent me, which is number one what's the worst career advice you'd gotten and what's the best? Lance we'll start with you.
Lance: Oh gosh. That was, that's on the fly.
Enoch Sears: Well I asked you because I figured you must have thought about it before.
Lance: Ha ha you would think so, you would think so since we're asking that question. Yeah, yeah, worst career advice I've ever gotten. Oh, so I had an interview in Boulder and the worst career advice I ever got was the guy said he wouldn't hire me because I'm like betting on a race horse. And I didn't know what to take from that at all. I mean it really threw me for a loop and that I, it wouldn't hire me because I wouldn't, I hadn't been to Europe yet and seen any of the architecture. So at the end I guess I just use that as fuel to do what we're doing today because I thought like well then don't bet on this race horse. This race horse, I'm gonna team up with this race horse right next to me. We're gonna race to the finish line and beyond.
The best advice, business advice I ever got is probably just Alex and I reiterating never forget about the fundamentals. At the fundamental level, at the end of the day what we are producing is plans on paper that have to translate into a building, and we need to make sure that those lines are correct when we have to go back and start construction.
Alex Gore: Yep. The worst advice I got, when we started we were only charging 40 dollars per hour, and one guy said, “Why don't you do this.”, he acted like this was the best advice ever, “Charge 20 dollars per hour, do a great job and you'll look like the smartest guy in the room.” And then I go, I was like that is terrible because you know you can't raise, you can't double your fees the next year. So we have consistently raised our fees around inflation mark, right? So if I lowered myself to 20 it'd take me two to three years back to get to where I was at that point at 40 dollars per hour, so I just thought that was terrible.
The best I got, and especially if you're a little bit young or insecure or think you don't know the answer, Lance's old boss said whenever you're dealt a problem take it head on. Approach it head on. So let's say the city says, “Hey you need to do an under drain report because, you know, there's space under it.” Go look at the code. There's nothing, “Hey can we look at the code?” You know you can do it in a nice way. A lot of times you'll get calls from clients and they'll say, “Hey this foundation doesn't work”, or whatever, and that can be scary if you think that you don't know construction or anything like that. “Hey let's look directly at the drawings. Let's see what the drawings say.” And a lot of times it was they just don't know where it is on the drawings. Honestly that's half of the questions, like, “Oh, did you go to page A5?”, they're like, “Oh, there it is, thank you, bye.” You know like that's it. So every time there's a problem I would say directly look square at it and try to get down to what fundamental is happening there.
Enoch Sears: Awesome guys. Well it's been a pleasure having you on Business of Architecture today. Lance Cayko and Alex Gore, awesome having you guys as always.
Alex Gore: Yeah, thanks a lot, thanks a lot. It was great.
Lance: Yeah, thanks a lot for the interview we appreciate it.
Enoch Sears: And that is a wrap. Thank you for listening today. If you're looking for more time, freedom, impact, and income as an architect, get instant access to my free four-part architect profit map by visiting freearchitectgift.com.
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