From Real Estate Acquisition Through Design-Build
If you’re considering buying and renovating an established home to fit your unique needs or dreams, you will have to deal with multiple people and companies. To complete the process, you will have to secure a realtor, architect, builder, contractor, and possibly even deal with other vendors. For the average layperson, it can be all too consuming and confusing. But, what if one company could do it all from real estate acquisition and closing through the design-build process? Imagine dealing with only one company to purchase a property, design, and build your dream place.
Wolk360 in Raleigh, North Carolina, is an innovative and creative buy-design-build firm specializing in helping clients create the perfect home. The firm is unique in that it has a multi-disciplinary team of designers, architects, builders, and real estate agents, so clients do not have to deal with multiple players when pursuing their dream. From acquisition, planning, development, demolition, and build they serve residential and commercial clients with high-quality start to finish custom projects.
Company founder Jonathan Wolk, AIA, is passionate about finding properties that are an exact fit for clients and seeing the project through from design, demolition, and build-out to occupancy. The approach is called the “full 360”. We sat down with Jonathan to discuss their disciplined 9-step process.
Jonathan, what led you to create the “full 360”?
When we were just doing design-build, I discovered that the decisions were made before the designer or builder, coming from the real estate side. For example, someone would say they wanted a three-bedroom, four-bathroom house and are looking for it but can’t find it. When a designer, architect, and builder look at existing properties, they can see ways to transform a house to fulfill a clients dream. A real estate agent can’t do that.
Even if our firm isn’t handling the real estate side, we can look at an existing house in a culture of tear-down and build from the ground up and imagine something that delivers precisely what the client wants. So, instead of tearing a house down and rebuilding a $2M house, we can work with the pre-existing structure and produce a renovated custom home at a lower cost. Being part of the acquisition process allows us to be on the front end, helping the real estate agent and the buyer achieve their goals.
So there is an easier way?
We’ve created a streamlined process. It’s very similar to what Apple has done with fully integrating their software and hardware. We are looking to incorporate real estate, design, and construction. The client has a single source of responsibility and continuity, so they don’t have to deal with multiple sources, contracts, and vendors. It smooths out the entire process, so the client has worked with one team that helps deliver their vision at the end of the day.
This process does take a lot of pressure off the clients, right?
Everyone is busy, whether it is a residential or commercial client. Time is a precious commodity. It is a complex and emotional process for the buyer. For many people, it’s the most significant investment they will make, and there is a lot on the line. So to find three companies on your own that you can afford to share confidential information and time with is taxing. When people meet with us and we explain the turn-key process, they get it. By dealing with one company, they save time, reduce their anxiety, and can save money along the way.
Think of it this way: Many real estate agents don’t want to find a $300,000 home when the client has a $750,000 budget because they work on commission, and that’s understandable. Architects have a reputation for imposing their will and don’t understand budgets, and because we are a team, we have a sensibility about design and budget. Our goal is to design the client’s vision. If you look at our portfolio, our projects are very diverse because we produce what our clients want and we aren’t promoting a stylistic or cookie-cutter agenda. I love those architects that push a stylistic agenda, but that’s just not our style. We understand our client’s goals, and we work with them to achieve those goals.
Simultaneously we work to help them with a budget. Today, with labor and material costs fluctuating dramatically due to supply and demand, Covid, and dramatic price increases, we have to work that out early in the process and monitor it constantly to execute.
The Wolk360 approach is really about a relationship, isn’t it?
For many, this is the most significant investment in their life or that time in their life. It is about a relationship, and there has to be a high level of trust. And we have gone through some of the most challenging times of my career over the pandemic. Between labor and material shortages and strange weather, this year has been challenging. Conversely, everybody is busy, which adds to it.
They have to trust that we will execute even if there is frustration over a delay. For example, we had a project where we waited months for the windows, and when they arrived, they were the wrong windows, then we had to wait for months for the correct windows to arrive. Our team works endlessly communicating with our clients. I’m a believer in a very open book process and constantly communicating with our clients. It’s an intimate relationship, and to do that with three separate companies (realtor, design, and construction) that’s asking a lot of the client. If you drill down into it, that is a lot of sharing with many people. What ends up happening if you don’t want to share it with three different people you end up compartmentalizing, and then the three entities don’t have the complete picture, vision, goals, and constraints.
Most of our clients are incredibly busy. We typically deal with people who own and run their own companies; they have families, and having meetings with three different companies takes up a lot of their time. Dealing with one company promotes trust and saves a lot of time.
Can you describe the 9-step process?
Everything begins with a consultation which we call the “why and what for?” For example:
– Why are you looking for a house?
– What kind of house or neighborhood?
– Why are you looking to downsize?
– Why are you looking to expand your business?
– What’s happened in your life to promote this change?
– Are you new to the area?
– What do you need, where do you want to be?
The process is about trying to get a feel and understanding of the reasons clients want to move and the specific location where they want to live. Then, we ask about the budget, their programmatic requirements, do they even know what those are, is this a forever home or a five-year home? Are the kids young or leaving soon to go to college? Is it an investment property? We discuss all of these things in the initial conversation to understand what the client wants. The next step is the real estate component.
Step 2: Real Estate
This step involves agency agreements, contracts, the total budget, and determining what we need to look for in terms of property size, look and feel, location, etc. We establish the budget to decide if we are finding an existing home to renovate or if we need to search for land on which to build.
The second phase of the real estate process is looking at properties, touring houses, and making offers. Wolk360 ensures the client has the necessary bank approval to make offers loaded up, whether for a property or an existing home. We do a quick schematic design if we find something, primarily a remodel, renovation, or even a tear-down. At this point, we have our feet in two phases. We are in the real estate phase, but we also jump into the design phase to look at a specific property and what it can do for them.
If they like what our team proposes, then we do a quick napkin budget and make an offer on the property, and in this market, we may have to make several offers on the property they want. Eventually, we get it, and then we move into the design phase.
Please describe the design phase.
We survey the house or the property, and we come up with a design and do another construction budget where we look at floorplans, elevations, materials, and further input from the owner. Then we move into construction documents.
What are the construction documents?
These are the plans we use for building and permitting. They are detailed drawings, and we work out the details of what they want, like quartz/granite countertops, fixtures, flooring, tile, and more of those materials. While working through construction documents, we also work through the pre-construction, finalizing the budget, and putting together a loan package: the design plans, project schedule, and the final pricing budget to close. The client can present this to their lender and say here is the property, design, and what it’s going to cost. Now they have a total package and can close on their construction loan and their mortgage.
What’s the next step?
We can begin construction with another contract and the necessary deposits to get us going with a launch meeting to kickoff and get all our contractors on site. We review the schedule, everybody’s role and review final selections with the owner. We begin construction, and depending upon the size of the project, it can be a two, three, six, nine, or 12-month process. We do regular updates with clients onsite and let them know what’s going on during this time. I always tell clients that things move very quickly at the beginning of construction, whether it’s demolition and framing, then it gets all sheeted up, and things slow down. After that, the tedious work begins like plumbing, electrical, HVAC, drywall, finishes, and other minute details. It seems like everything is cruising to the owner, and suddenly it comes to a grinding halt, but it doesn’t because now you are doing the small, tedious work of finishing, and that takes time.
Throughout the construction process, we communicate with the clients on progress, material, and supply delays. We used to touch on this, but in today’s market, we have to stress it. It’s not just shipping delays, but material cost increases are crazy. For example, a year ago, 2X4’s were $3, and today they are $9! When you are buying 100 2×4’s that’s a huge hit. A lot of our clients understand it, and nobody likes it. We don’t like it, and it doesn’t increase our profit, and that’s why at the beginning of the process, we communicate these escalating material costs, so there are no surprises for the client. We have to build in contingencies, and we share this at the beginning of the process.
Our team understands this emotional time for our clients and that a lot of money comes with a great deal of trust. It’s a frustrating, crazy, and exciting experience. The building or renovation of a house is a stressful process for families. Someone once said that building a house breaks up more marriages than infidelity. We take that into account from the get-go and communicate that to new clients. The Wolk360 team wants to make the process as smooth as possible for our clients and ourselves.
Wolk360 is grateful for our clients because most of them understand these nuances, and they have the means to afford it.
What happens upon completion of the project?
Upon completing the project, we do a final walkthrough with the client to start generating a punch list early. We get our CO and, they can move in and start living in their new home, but it doesn’t end there for us because that’s when our warranty begins. There is a one-year warranty. We tell our owners not to wait for the year to be up if something were to arise. We make sure to do quarterly warranty check-ins. We tell our clients not to wait for the one-year warranty but to let us know when anything concerns them.
WOLK360 was founded in 2016 by Jonathan Wolk, AIA, as a turnkey solution for small and mid-size projects to provide a single source for busy Owners. To provide cost-effective solutions to our clients, we are a lean organization with a team of reliable sub-contractors that has a long history of working together. Projects range from new residential, residential renovations, first and second-generation office, and retail fitups ranging in size from 1,000 sq. ft. up to 100,000 sq. ft building renovations.