(Click The Video Below To Play)
The Matt Taylor Interview
Real estate developers are entrepreneurs that identify prime real estate, develop the property, collect rent from lessees or sell developments for a profit. Every wonder how to flip an old property and turn it into a new master piece? Are you interested in real estate development projects? Do you want to know how to become a real estate developer? You NEED to watch this interview on How To Development Real Estate as we go through the whole process.
I’m talking to Matt Taylor from Ryan Development about everything you need to know about a real estate development project from start to finish.
Real estate can be an excellent investment, but like any investment, there are risks. But a successful real estate developer will have all the skills in the video to navigate the waters. The real estate development project is a coastal two unit compound masterpiece and they both are spectacular. Upper and lower living. The lot is zoned for 3 units but the developer insisted to build 2 over the top homes instead.
The home on the top floor is 3,230sf with 675sf of entertaining deck space with gorgeous views. 4 beds /3.5 baths. The kitchen is insane for entertaining with a 9’ island. Top of the line appliances. The entry is beautiful with stonework as you enter. The master is ridiculously large with its own coffee bar area (walk in closet alone has to be 8 x 18) and a wrap around deck. The home on the 1st level is 2,727sf, 3 bed + office/3 bath. This doesn’t have any deck space but it does have a great outside area that will be very functional including an outside shower as well.
This home has the same finishes as the top floor. How To Development Real Estate – These properties will have huge rental potential for rental income (airBnB) since it’s so close to the beach and such a nice luxury property. A couple awesome things to note about both homes: – The finishes are A++++ – Both are super smart homes and completely wired for whatever you want to do. -Both homes have over sized two car garages. Made sure to fit two trucks or suvs -And the coolest part of them all- the flooring between the homes is insane.
The developer went the extra mile to make sure the flooring was sound proof. The home below will never hear the home above. There is multiple layers and built almost like a parking structure. You can drive a tractor up there and the person below won’t hear it. Location- 200ft from the beach with its own beach access. Timeline- completion will in the next 90 days.
Here is a quick breakdown of the interview:
:29 Let’s tour the project
1:48 How To Find A Real Estate Development Project
3:20 What Did it Look Like When He Bought It (Before)
4:01 Shout Out to Coors Light
4:30 What Was The First Step in the Process After Purchase
6:09 How Did He Decide What to Build (Type of Property)
8:22 How to Design a Real Estate Development Project
9:19 How Long is the Approval Process with the CIty
11:40 Why He Decided to Build a Luxury Property
13:44 “Round 2” (Intermission)
13:55 What is the Next Step Once Your Property is Approved
15:01 How Many Inspections and What Was the TImeline
15:43 What Happens After you Lay the Foundation
16:20 How Do You Assess the Cost
17:15 Choosing Your Finishes
19:10 What Were the Biggest Challenges
21:17 What Was the Biggest Lesson Learned.
Property Development involves a wide range of activities and processes from purchasing land to building and developing facilities. Real estate developers are entrepreneurs that identify prime real estate, develop the property, collect rent from lessees or sell developments for a profit. Every wonder how to flip an old property and turn it into a new master piece? Are you interested in real estate development projects? Do you want to know how to become a real estate developer? You NEED to watch this interview on How To Development Real Estate as we go through the whole process.
Full Transcript Below:
Oliver: Welcome to another episode of In The Know. Today I am in Carlsbad with a good friend, Matt Taylor and we’re gonna be talking about how to build a house from the ground up. He’s got a really beautiful project. We’re gonna take a tour and then we’re gonna talk about step-by-step exactly how he did it. Let’s take a look.
Matt: You see 14-foot vaulted ceiling in the family room. We’ve got a pretty sweet large dining room here, easily sit 14 people, no problem.
Oliver: And now we’re coming to the crown jewel.
Matt: Yeah, I like that, the crown jewel. It’s a great size room, it’s really big as you look that way and see the closet. Big master bathroom, we’ve got a massive shower. The shower’s over six feet wide. It’s over four feet deep. You walk out this back deck, you’ve got a private covered wraparound deck off the master. And you have beautiful views of down south coast San Diego.
Oliver: Love it. We are here on site at one of the projects that he’s building and we’re just gonna talk about the development process and kind of what it takes to build a house like this. What did you like about it when you bought it? What was it that caught your eye that this was the one?
Matt: As soon as I drove down the street, so about three years ago was when we bought it. Three years ago, this was January, and real estate was just taking off by the beach. Stuff was gettin’ picked up. There was this property and there was a property on the street and there’s one more on the other side. And we had first looked at one down the street. It was on Garfield, has a lot of car traffic. It was one of those things that we were kinda sittin’ there and liked it but weren’t really lovin’ it. That property, we wound up getting in a bidding war on it. We lost the bidding war. I was super discouraged, got in my truck, started driving away and I drove a few blocks away. I randomly turned down this street to actually leave Carlsbad. Turned down the street, saw a sign in the front, stopped and I have a video on my phone where I pan straight ahead and pan to the left at the house and then pan back to the water. And thought, this has an awesome ocean view, it doesn’t have any beach traffic, so there’s not a lot of cars driving by. You’re on the same side of the street as the sidewalk and the staircase do go down to the beach, so you have awesome beach access that’s very safe for kids. And I thought this is where we’re gonna build. We made an offer that night, we closed about 15 days later, and now three years later, we’re almost done buildin’ it.
Oliver: And so you got yourself a really prime spot here in Carlsbad, which is really great, right? You’re 500 feet from the water. Tell me about what was here when you bought it.
Matt: Awesome, so there was a 1940s bungalow and a 7,000 foot lot. It had been added onto and kind of pieced together through the years. There’s probably some slumlord rentals going on in there back and forth. And it just kinda made it work. We saw the property and by the time we looked at what was possible from a remodel standpoint, we realized very quickly that it was gonna be a ground up. We literally hit the drafting table and I drew the design myself. I drew it about eight or 10 different ways and we settled on this layout and we’re extremely pleased with how it’s turning out.
Oliver: Just to take a quick sidestep, I forgot to give a quick shout-out to Coors Light for hookin’ it up on a couple silver bullets while we do the interview. So cheers to that. It was a 1940s bungalow and you drove by. Great location, everything kinda fell together, it felt right for you. Tell me about what happened next. What was the next step in the development process?
Matt: Ryan Development was started. I went on my own a little over four years ago. When I got out of college I worked for another construction company that based in San Diego called Lusardi Construction. They’re a great contractor. They build a lot of commercial projects. And then once I left that part of my life, the economy kind of took a tank. I spent a number of years specializing in risk mitigation and construction insurance. And then started flippin’ houses. And when I got done flippin’ houses, I went on my own. Became a general contractor.
Oliver: You got the bug.
Matt: I got the bug and built a lot of remodel projects. And then when we bought this, we were in the process of flipping a couple other houses. My wife and I actually moved into the bungalow while we were in plan check. A little naively think I could get out of plan check faster than I could . But we enjoyed a few months of some really fun time at the beach and so I can tell you first hand, it’s an awesome street, it’s an awesome neighborhood. The beach access is incredible. The beach location’s incredible. The nice part about these units is the top unit has four parking spaces. Two in the garage, two in the driveway. Same with the downstairs unit. So this development project parks eight cars, and in an area that doesn’t have a lot of parking, that’s awesome.
Oliver: That’s a premium for sure.
Matt: And it’s even better because that means people can’t come to the beach. So when you go to the beach, you have a private beach. There’s nobody there. And it’s an awesome thing.
Oliver: It’s a good thing not to have any free parking by your house for those beach living folks.
Oliver: So why don’t you tell me a little bit about, okay, so it all came together. The location was great. How was it that you decided what to build on this property?
Matt: Great question. So in this zone, where we’re at in Carlsbad, there’s an overlay map that they’ve done, and they give you the guidelines on what you’re allowed to build. You’re setbacks off the sides, setbacks off the front, the rear and your hype. So once we were able to utilize those requirements we kinda hit the drawing board and then figured out like most developers how do you maximize the space. Well, we started with three units like 99% of the other projects that are out here. When I looked at what I was able to do with three units I was not happy with the amount of the space on the land, I wasn’t happy with the amount of stairs that were on the land. I didn’t like the chopped up living. And so I had to make a decision to either do three or do two. I decided to do two. We decided to do them top and bottom. We made ’em large square footage houses. We made ’em totally reversed in living space so you’re not bothering one another. We did an awesome floor system to soundproof both units. And that’s kinda how we got down the path of what to build on this property.
Oliver: Yeah, I think that’s actually a really important decision you made, because a lot of times developers will come in, like you said, to try to maximize the land. And what they’ll do is they’ll build cramped living spaces that are stacked up as high as possible so it’s like living room, staircase, kitchen, staircase, bedroom.
Matt: And when you do that you get a lot of soffits, right? You get a lot of small rooms and you get short ceilings. And so in these spaces, both top and bottom, you have 10-foot ceiling heights. In this room that we’re sitting in right now we actually have a 14-foot ceiling height at the peak. So when you come in here and you see a five-foot window, that’s three feet off the ground that has ocean view in every single west facing window, you don’t get this anywhere else. You don’t get this single living anywhere else. And while it isn’t three units from a development standpoint, I build two that in my opinion are badass. And that was the thought process.
Oliver: They are pretty badass. So you came up with the idea. I know in this case you drew the plans yourself. Let’s go both options. You either do it yourself, which most people aren’t gonna do because that’s pretty crazy .
Matt: They’re smarter.
Oliver: But very impressive that you were able to do that. And then there’s also the hiring a professional to do that. So what’s the next step there and how does that work?
Matt: So once we drew the plans, I draw everything in Google SketchUp, plug for Google. No affiliation but you have an awesome program. So we draw everything in Google SketchUp Pro, and once we get really comfortable with our floor plan layout and our elevation drawings, in this project in particular we hired a draftsman. The draftsman put our plans on title block, which makes it look like normal plans. The title block is the side, you know? And from that point in time, that goes through the city process, goes through planning. Planning approves it. Once planing approves it, you send it to your structural engineer. You have the project engineered and then that goes through the city again, through a third party that they hire call EsGil, which is down in San Diego. And then once all that’s approved, then you build. In this case it was a 19 month process.
Oliver: Wow. So from first submission of design or from idea to completion?
Matt: From first submittal of the design.
Oliver: So first submittal of design took 19 months to get the approval?
Matt: Took 19 months to get the approval and that’s an inflated, it’s an actual number but it’s inflated. Because what happens is the city will give it back to us and you don’t always know what you’re going to do to address the commentary. So especially for me, I’m a very passionate person. I’m very creative and I need to think about it. So sometimes I’d sit on it for a month, maybe two months. And I’d come here and I’d sit there in the yard. I’d literally put a chair about where we’re sitting in the yard and I’d look at the house and I’d look at the ocean and I’d figure what do I want to build here? How do I wanna feel? When you come through Carlsbad you don’t see one site that has a 40-foot deck across the front, not one. It’s 40-feet, it’s covered, it’s got heaters, it’s got lighting, it’s got speakers, it’s got a built-in barbecue. This house, I literally love this house.
Oliver: It’s outdoor living which in southern California is–
Matt: But it’s covered.
Oliver: As good as it gets.
Matt: As good as it gets. When we designed the panel doors, a lot of people put a bunch of panels. Well the problem with a bunch of panels is you see the styles in the door. It blocks your view. We only did three on each side. Plenty of room. You know, you’ve got a 16-foot door, you got plenty of room to walk through. This one we intentionally designed so the doors go in either direction. So when you’re having a party put ’em in the middle. You can walk around both sides, right? The wind’s blowin’, put ’em to the west. On this one, by the kitchen where the barbecue’s at, you only want them sliding east ’cause your barbecue’s on the east wall and the wind’s gonna blow that way. And that one has a screen door, so if it’s hot, every once in a while it gets hot, and we put in an amazing HVAC system so you never have to worry about not being comfortable at the beach. But if it ever gets hot, you’ve got a screen door here, and that’s your screen. So we really tried to make it as livable as possible and think through every detail.
Oliver: Yeah, and I think that’s one thing I really appreciate about this project is the attention to detail. A lot of the things you’re doing, you’re putting in the high-end finishes. You’re putting in the Smart Home features. You’re doing a lot of things that are really kind of making this the premium product. Why did you decide to go that route?
Matt: So it’s kind of a loaded question for me. It has a little bit to do with, it has a lot to do with how I got to where I am and why I’m here. My grandfather was a self-taught engineer and was meticulous to the details. My father was a successful executive and was always, always instilling in my head that if you’re gonna do it, do it right or don’t do it. When you come in here you don’t just see Fleetwood doors, you see Fleetwood windows. You don’t just see a tongue and groove subfloor, you see a tongue and groove subfloor, you see a sound mat, you see a port en place floor over the top of it. You don’t just see insulation underneath that, you see a layer of wool or a layer of spun cotton. And then a layer of fiberglass underneath that. And sound clips and hat channel and double layer drywall. All these technical terms that the normal buyer doesn’t know. And that’s okay, you don’t have to know. But I’m telling you we know for you. And not only we know for you, we’re gonna tell you. We’re gonna tell you why it’s done the way it is. And there’s a lot of people that are doin’ it. I don’t want to say that they’re not, but there’s also a lot of people that don’t. And when we set out to build this project, we wanted it done right. And so when you see the Fleetwood doors, I sat here and I thought about how the doors were gonna open. We didn’t just order doors. And it was important to me that this one worked in either direction and that one only stacked that way. And it was important to me, when I go outside, I envisioned myself outside with my wife or my family, with a cocktail at a dinner party or whatever you’re gonna do. So when you’re out there you enjoy the space. So we try to look at all those details and build it like we’re gonna live in it.
Oliver: Yeah. I think a really important lesson, a takeaway from that is if you’re gonna do it, do it right, right? That’s what Steve Jobs always said. That’s why the Apple iPhone crushes every other phone on the market is because it’s the premium product. He thought of everything. He thought of all the details. He thought of everything that a customer could want. And I think that that’s what you’ve done here which is really, really amazing.
Matt: Thank you.
Oliver: Why don’t we do a quick round two ’cause I’m empty.
Matt: We go way back .
Oliver: Cheers. So after the 19 months, you finally get the go ahead. You get the green light on the project. Tell me about what happens then.
Matt: That first process, the way that works is you set up demo crews. They bring big excavators, right? Actually before that you do remediation, so if there’s any old stuff in the house, asbestos or lead, you have to have that remediated. But we did and then you bring in the excavators and they tear down everything that was here. They haul that stuff off and then once that’s all hauled off, then you start grading, right? And grading is a different permit. So you get a demo permit, you get a grading permit. Most of the time they’re issued together. Project by project, sometimes that’s different in our case. We had ’em issued separately in order to help streamline the process. And then once the excavator came for the grading process, we wound up going five feet down. So we dug down five feet on this site. Make sure we got compaction and then built the pad back up six inches at a time. And then we were able to go to foundation digging. Then we dig the foundation, set the rebar, all that’s inspected. There’s a lot of inspectors in the whole process and once that happens, rebar’s set, then you pour the footings and then you pour the slab and then you drop lumber.
Oliver: So not to cut you off there but now we’re at the slab, right? Between go ahead and slab, how many inspections did you have to go through?
Matt: Oh gosh.
Oliver: And how long did that process take?
Matt: Okay, so easier to tell you the process than the inspections ’cause I don’t remember how many. But we basically we started deconstruction the last day of August, that was a weekday, so whatever that was. And then we poured footings in November, to give you an idea. So basically September, October and part of November is that process.
Oliver: So we’re back to the slab.
Back to the slab.
Matt: Well, once the slab gets poured, you come in and we chalk out all of our walls. So we chalk out our exterior walls first And then all our interior walls. Make sure everything lines up. Make sure your plumbing lines up. All your anchor bolts are in the right spots. Your hold downs are in the right spots. All that fancy stuff that we have to have in California for all of our earthquake possibilities. And then we drop lumber and we start framing.
Oliver: The building time start to finish, what do you, I mean obviously you’re still not done. But what do you anticipate?
Matt: We anticipate end of May, early June for completion date.
Oliver: And then how did you assess the costs of the entire project?
Matt: So construction costs right now, specifically right now, and we’re taking this to the beginning of March, lumber, there was an article in the Wall Street Journal within the last week. I don’t remember what day. Mighta been on Sunday. Lumber pricing is skyrocketing so it’s very hard to estimate projects at this size. So this is 6,000 square feet of condition space. When you get a much bigger project, I came from the commercial side so when you’re building hundreds of thousands of square feet, it’s much easier to estimate. ‘Cause there’s more room for error. When you get down to this footage level a little bit of lumber change can make a big effect to your bottom line. And so it’s a very difficult process.
Oliver: What about everything else ’cause obviously lumber’s a big part of it but you chose Sub-Zero appliances and things like that. So how do you make the decision there?
Matt: As we looked at this project going back to a few questions ago, why we’re doing the finishes that we’re doing, I actually set out the project with a different appliance package in mind. There was some heated conversation with my dad actually about what to do in this project. I’m a big believer in Whirlpool’s product. I think Jenn-Air makes a great product, a professional product. And I’m proud of what they’re doing. It’s in my own house. But it’s really hard to compete with the king that’s already on the top of the hill. And that king on the top of the hill, without question–
Oliver: The brand name.
Matt: It’s Sub-Zero. Sub-Zero owns the market, they’re what everybody else benchmarks to. So we pulled the appliance package of the Jenn-Air Professional, and we put in all the Sub-Zero woof. I’m happy with it. It’s more money, it’s more expense, but they’re the king at the top of the hill. So that’s how we went that path.
Oliver: So one of the cool things about the property and the stage that it’s in now is that if someone wanted to buy it, they could still pick their own finishes, right?
Matt: Absolutely. So we’re at the stage now that’s really fun and exciting ’cause we’re right at the point where drywall’s gonna start next week. And when that starts, that’s when our team gets hot and heavy into looking at what finishes are. So we’re at that really fun part in the stage in the game where we can come in, we can pick countertops, and backsplash and flooring and tile. If you’re a buyer, now’s the time to come in and be able to design your own house without the wait.
Oliver: Yeah, reach out, give myself a call. Give Evan a call if you wanna say what’s up, Evan. We’re gonna be representing the sale of the property–
Matt: How ya doin’?
Oliver: And looking forward to gettin’ this thing sold. Right now is the perfect time ’cause you can still come in, pick finishes and design this place exactly the way you want. So I imagine the entire development process you’ve probably learned a lot, right? And you’ve probably faced a lot of different challenges. What would you say is the biggest challenge that you’ve faced during this whole build?
Matt: Honestly, this is gonna sound maybe weird to some, the challenges are my favorite part. And when you build ground up, you have a little bit different animal. But those challenges are typically in layout. So the camera can’t see but our kitchen’s over here and if you got in real close, the nitty-gritty, you’d notice that there’s two holes in the floor where the drain lines used to be for the sink that are now 10 inches further from where they are. That’s one of those things where I stand there and I’m actually in the space. And I’m thinkin’ I’m at the sink and my wife’s at the range, or I’m at the range and my wife’s at the sink and we’re back to back, do you have enough space? And this is one of those examples where I was there and I was like, you know, we need a little bit more space. And we got this awesome 48-inch Wolf Range. It’s absolutely top of the line, chef-grade, beautiful hood above it. And you’ve got an amazing island behind you with an awesome farmhouse sink in it. Do you want it to be a little too close? And even though it was already set much more than any other standard home, we just needed a little bit more. So that 10 inches more, those are the details, those are the challenges, those are the hurdles that you overcome in the process when you’re here every single day, all day long. I’m the first guy here, I’m the last one to leave. I’ve got a broom in my hand, a nail gun in my hand. I wear my bags, for people who don’t know, it’s your tool bag, on a daily basis and we build it as if we’re gonna live here. And we’re literally attached to the house. So when you talk about problems, we love problems because problems have solutions that live a much better house than would be built by anybody else.
Oliver: I love that. So basically you’re attacking the problems that come up as if you were the person living here.
Oliver: And kind of redesigning things and making adjustments as you go based on that.
Matt: 100%. How do you wanna live in the space?
Oliver: What feels right?
Matt: So when you come in and you’ve got an interior designer or maybe you do your own interior design work, and you set in your furniture, it’s set up in a way that it’s ready to be lived in. And we’ve thought about it. There’s a fireplace behind me and even though I don’t see that as a place for a TV, we’ve wired it in the wall behind it. It’s there.
Oliver: Just in case.
Matt: Just in case because you might want it done.
Oliver: What would you say over the course of the process was the biggest lesson that you’ve learned?
Matt: Oh . The biggest lesson.
Oliver: Yeah, that one got him. Pow!
Matt: Yeah, man, that’s, there’s so many lessons.
Oliver: ‘Cause I’m sure there’s a lot, right?
Matt: There’s so many lessons. We’ve had the opportunity to work with some good inspectors in this job and they’ve shed light on some different ways to build that have made the house better. There are some code requirements that I have an opinion of that are not better. And those things we’ve discussed with them and we’ve been able to change the status quo system model in order to accommodate a better way to build. So the lessons I’ve learned is stay involved always. And really they turn over the keys and they haven’t really had a lot done. I can tell you where all the wires are in the wall because I was there when they were put in, if I didn’t put them in myself. And the same things with the framing and the same thing with the fireplaces. That fireplace isn’t even on the plan. It doesn’t exist. That was something we sat here and we said, “That needs a fireplace and this is where it’s gonna go “and this is how we’re gonna build it.” So the lesson I’ve learned, is one that I try to implement on every one of our jobs, is be present. Be present with your subs, be present with your partners. Be present with your employees, be present with your future customers. And listen to what people want and figure out a way to implement it. And do it the right way.
Oliver: I love being present and another thing that I’m also hearing a lot is add value. Because I think that a lot of times people try to tear through development projects and they aren’t taking the extra time to do the extra things that you’re doing and really adding the value. And I think by adding the value, you’re not only building a beautiful house, but you’re improving the neighborhood. You’re improving the status quo on the way things are built. You’re educating city inspectors on how to do things possibly better.
Matt: And vice versa. They’re educating us on stuff too. And that’s important too. ‘Cause I don’t wanna have that, you know, go down a rabbit hole of bad things. There’s a lot of those guys that bring a lot of good stuff to the table. And I think the best relationship we can have as we move forward with our municipalities, and I’m very passionate about this, is work together. Some cities get it, some cities don’t. And they’ve seen a lot, and we’ve seen a lot and if we can come together and put our heads together and have a common goal to build better, we’re gonna build better. But if we come together and butt heads, we’re not. And so the most important thing’s to create a relationship with those municipalities, with those inspectors, with those building departments, to say, hey, let’s build it better.
Oliver: And I think ultimately that’s how everybody wins, right?
Oliver: The buyer, the community, the city, everybody wins when you build it better. So if they want to learn anymore or get ahold of you, how can they do that?
Matt: They can get a hold of me through Big Block Realty. Or they can reach me at my email, [email protected]
Oliver: He’s a very hot commodity. He’s booked out already for the next couple years.
Matt: So yeah we’re booked out through ’19.
Oliver: So very exciting. I really appreciate you taking the time today and educating us on the development process and the really cool project that you’ve got put together here. And look forward to many future builds in the future.
Matt: Well, I appreciate the time. Thanks everybody.
Oliver: Absolutely. Appreciate it. And now you’re in the know.
“this has an awesome ocean view, it doesn’t have any beach traffic, so there’s not a lot of cars driving by”
“I drew it about eight or 10 different ways and we settled on this layout”
“So this development project parks eight cars, and in an area that doesn’t have a lot of parking”
“I’m the first guy here, I’m the last one to leave. I’ve got a broom in my hand, a nail gun in my hand.”
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