This week at EntreArchitect Podcast, we invited Declan Keefe of Placetailor back to share his knowledge about How to Get Started as an Architect Developer.

To hear Declan’s origin story about how he was hired by a firm as a student and ended up owning it less than three years later, check out EntreArchitect Podcast Episode 130.

Placetailor is an architecture firm that provides architecture services, construction services, and real estate development. They look at architecture as the genesis of ideas, and wanted to figure out how they were going to take control over the revenue and profit side of the business.

After taking over a company that was in quite a bit of debt, the team decided they needed a “silver bullet” to pull them out: real estate development. They saw a conjuncture between architecture and real estate development in that they’re including an important piece in the middle of the relationship – the builder – where most of the revenue exists. Depending on how you set up the structure of your business, we know for sure that profits feed through the construction arm. The Architect as Developer model would function as a developer who expenses architecture as an overhead cost and relies on the profits from development to pay itself back on the architecture side. The major difference is that you can’t pay the entire cost of construction on the profits on development (Architect as Developer), whereas you can potentially pay the entire cost of the architecture fees on the profits from development (Architect as Builder-Developer).

Placetailor has a design-build business and then they have a development, LLC for each project, for a few reasons. First is liability: if one of the projects fail, the entire business doesn’t have to go under. Also, they’re an employee-owned cooperative. Different members of the cooperative can be on different projects, as well as leave an opening to bring in people who aren’t within the coop to be partial owners in the project if needed.

How to Get Started as an Architect Developer

Step 1: Find an Opportunity
Declan and his partner, Evan, walk around a neighborhood to see the land that’s available and what’s going on in the area to see if there’s an opportunity, usually for residential condo-based development. Then there’s a little research into the properties, the leans, who owns it, and any complexities they may or may not want to deal with.

Step 2: Is it a good decision as a financial model? 
Placetailor has created a lot of spreadsheet tools to do both quick and detailed analyses. If the number at the end looks like it could be a decent project, they decide to go after it.

Step 3: Put an Offer In
Based on the analysis, they know how high they can go and where to start with an offer. Don’t get attached emotionally and be prepared to walk away if it doesn’t work out.

Step 4: Financing
If/when the offer is accepted, they have to figure out the financials behind it. There’s a few approaches: they’ve used a crowd-funding approach and they worked to pitch their brand with confidence to people who they knew cared about it. They said, “We’re doing something new, we want to push the boundaries of high-performance building and we want to test it in the real estate development world.”

Step 5: Establish Contacts
Keep track of people who are...