Enoch Sears at the Business of Architecture podcast recently interviewed Architect & Developer Jonathan Segal. Listen to the podcast and see show notes at businessofarchitecture.com. See more about Jonathan at jonathansegalarchitect.com.
“But the key to success is picking it small and slowly working up the food chain. Don’t start big because things will go wrong and when they go wrong you better have a check book to figure out how you’re going to rectify your problems and they’re always out there.” – Jonathan Segal, FAIA
“If the bank says that your project costs $100,000, they want you to bring in $20,000. They want to lend you $80,000 or they want to lend you $75,000 and they want you to bring $25,000 cash in. Typically in my deals $11,000 of that $25,000 are fees (Jonny Bucks) that I’m going to get. So the bank says fine, only bring in $14,000 and bring in let’s say your drawings. Let’s say your drawings here are worth $11,000 because you’ve done those services. They acknowledge that. It’s not like future earnings. You’ve already done the work.So you hand them the drawings which are worth $11,000 oversimplifying and then you bring in a $14,000 check. So if you look at that $11,000, you didn’t have to make $14,000, pay $3000 in tax for the government to then give the $11,000, to pay yourself the $11,000 and pay another $3,000 in tax. So if you made $14,000, you give the bank $11,000, you’ve got six in tax. It’s just insane. So if you just circumvent the whole process, roll in with the drawings and all the other parts and bits, it’s like found money and then the bank will loan you the balance.”– Jonathan Segal, FAIA
Jonathan also gave a course on Architect as Developer with Business of Architecture podcast. Listen to the podcast, see the course notes, and take an online quiz for AIA credit at businessofarchitecture.com.
“We closed escrow. We built the building, we filled the building, and we got it financed in 14-months. Why? No General Contractor. We didn’t have any RFI’s, no job directives, no leans, no lawsuits, no wasted meetings. Just think about the notion of that. Our specifications didn’t exist because our spec book is part of our subcontractor’s agreement. We are distilling our drawings down to the minor amounts necessary to do it. There is no interaction between the owner, the architect, and the contractor. Its a complete waste of time because we are all the same guys.” – Jonathan Segal, FAIA
Discover more podcasts on the Architect & Developer Podcasts page.