Understanding numbers, finances, budgets, how to ask for money in an appropriate way also helps me win work with my private clients. Hello
architect nation, and welcome back. Ryan Willard here, principal partner at Business of Architecture today, you'll discover how one architect escaped the rat race without missing a paycheck. Have you ever dreamed of breaking free from the limitations of traditional practice, but felt overwhelmed by the risks of going solo? Do you ever wonder if there's a smarter way to build wealth as an architect without grinding away on client's project forever? Well, today, on the episode, you're going to discover the unconventional path one architect took to go from employee to entrepreneur without missing a paycheck, a little known strategy for acquiring property that lets you develop projects with minimal upfront capital, and what Frank Lloyd Wright understood about business that most architects still haven't figured out. Today, we're talking with Matthew Arnold, the founder of Arnold and an architecture and development business in Boston, Matthew designs buildings and also helps bring them to life. He focuses on projects in his own neighborhood, making sure they fit well and work smoothly. Today's episode is sponsored by the smart practice as a reminder, if you haven't already watched the free firm owner master class on the smart practice method. Well, what are you waiting for? Discover How To eliminate overwhelm and slay chaos in your practice so you can focus on the architecture again, as always, make sure you listen all the way to the end and catch important listener only bonuses and information. Get ready for an inspiring conversation packed with Game Changing insights. Let's do it. Matthew, Welcome to the Business of Architecture. How are you? I'm excellent,
excellent. Happy to be here. I don't say first time, long time, if that makes any sense to you,
first time called a long time. Listener, absolutely glad you know that I love it. No, very, very glad. Thank you very much for your support with the with the podcast and being a listener. And I was very excited when I got your message and you responding to our call out for architects, developers and you yourself. You're an architect, you're you're, you worked for David has seen for many years and done lots of exciting projects there, and we'll talk a little bit about your kind of background there. But more recently, sort of middle of last year, is it that you went out on your own, correct? And you've adopted the the kind of the the dream business model of many firm owners, of the architects, developer, and we can, we can go into that a little bit and just kind of understand why you felt that was a good business model for you, and what you've done in preparation to making to kind of making that move from a firm like, like David's, which is, you know, kind of internationally recognized firm that many people would give a limb to work at. And, you know, very sort of exciting projects. And I know, I know from speaking with him as well, that typically team members there don't leave very true, which is testament to look the kind of place that it is to work at. So, so welcome, and perhaps we can. We can. My first question is, why did you set up on your own? How? What's, what's the back story here? How did this come about? Well,
you know, I had been working for David for almost the last 15 years. Like you said, great place, great man. He's a mentor. He is my mentor. He was my professor and grad school at Northeastern, and kind of hired me in 2009 when there wasn't much going on in the world today. Do you want a job? Come work with me? I went there, and I kind of never left. And he was really just a great mentor and now a great friend. But, you know, I always kind of in the back of my mind, had the dream of running my own practice. Right? I grew up in a household that my stepfather ran a construction company, and I saw him kind of be his own boss. My father, kind of, in his industry, was very much his own boss as well. And I always just kind of had that looming idea in the back of my head that, you know, I would run my own office someday. And you know, honestly, last year, I was kind of really struggling and grappling with what to do, like I really loved being at hassin, and I love David. I love the folks there. They're my family. They always will be. But there was still this kind of looming, you know, voice in the back of my head saying, you know, you still have your own dream. There's still time for you to live it out. And it was just kind of there, and I tried to silence it for many years, but it just kept on. On nagging me, honestly, I went, I had an opportunity to go up to Taliesin West last year with Lutron lighting, yeah, lighting outfitted Taliesin West with Quechua lights, these beautiful, adjustable light fixtures. They asked me if I wanted to go out with with a bunch of other architects, interior designers and lighting designers, and spend three days out there, I said, Yes, I went out. Had a pretty magical and like just just reinvigorating experience. It really was so empowering to go into that space, walk into his studio and feel the things that he intended you to feel all those years ago, and it was still so relevant today. And I don't know it just like I was so reinvigorated and re inspired about the architecture profession. I came home and I was like, I think I need to stop my own office. And, you know, I told my wife, and she was like, Yeah, you should do it. You know, I've always been very entrepreneurial. I did bring in a significant amount of work to have seen because I do like being out. I like talking to people, people. I'm a people centric person, like I say I'm a pack animal. I don't roll by myself very well. You can ask my wife, I drive her insane constantly. You know, she's like, can you just go play with your friends and leave me alone? Because I really do. You know, so many people are good with people, but they're exhausted by people. You know, I came home from that trip and my wife was like, what is up with you? I just like spinning with ideas, and just so inspired and reinvigorated about the world of architecture, and it just became so crystal clear that by I needed to do this. And what?
What was it? What, particularly, what was it about seeing Talli ass in that kind of really reignited this love of architecture and possibility and, and what did you see that was kind of, you know, possible for you as a as a practicing architect and and as a business owner,
right? And a good question, yeah, you know, I think what became clear to me was like Frank Lloyd Wright, and we also went to arcosante out in Arizona. Oh, wonderful. So they had such clear visions and dreams for what they were doing, right? They have their own vision. And I think going there and literally seeing their vision and kind of feeling their vision all of these years later, right? Those structures have been there for a very long time, and so it's really inspiring to say, Oh, my God, I can see his vision that he had all those years ago. And it made me realize that I wasn't really living out my own vision, right? I was trying to wear a version of my vision, which was a very nice vision. You know, I was working at a great place, and there was great trajectory for me, but at the end of the day, it wasn't my vision, and that's what really became into focus. Like, in order for me to be 100% happy and 100% devoted to what I was doing, I needed to drive that bus, right? And, you know, one of the things I learned from David has seen, and one of his amazing talents is he is really good at identifying people's talents, right? And he is also really good at putting people around him that are better than certain things than he is, right? He that man is a nucleus, right? And there's this orbit of people that revolved around him. That was one of those people. I mean, it's a captivating orbit. You cannot. It's very hard to not get sucked in there, right? And I loved it. I enjoyed it. But what I realized is was like with my personality, I also felt like I had the ability to create that same orbiter, folks, right? And I want to build my own orbit, with kind of me at the center, and not in an egotistical way, but, you know, to push a dream and then have people come in and guide that dream and that vision as I go through just like he did 30 years ago. I mean, when I told him that, you know, I was thinking about leaving, he said, Hey, I know somebody who does the exact same thing 30 years ago, and it was him, right? So I was almost like bawling in his footsteps, which was kind of a nice idea. But I think that whole trip just really, you know, brought it to my attention. I was really thinking about it. And then all of a sudden there was an opportunity, somebody I know was buying a very nice house out in Dover and was going to sink a significant, you know, a good amount of money into they were going to do an addition, renovation. It's a 5500 square foot house. Part of it was built in 1860 you know, we were going to modernize this house as three car garage, tennis court, future pool. And you know, he was kind of willing to be my first client. And, you know, was willing to sign a fairly significant design proposal, and said, Yeah. And I was like, so I had to do it. So it all kind of happened very fast. And then I just was like, everybody said, you got to do it. And so I just dove into that opportunity ahead first, and I barely had time to come up with, come up for Water Sense, which is, do you
mind me asking, what was it David say when he's told him that you were gonna he
said, You know, I'm not surprised. He said, the one thing he said to me was, Matt, I'm gonna support you no matter what. I want you to stay here. I want you to continue to work with me, for me, and help me run this office, but I'm going to support you with whatever you do. And honestly, I I had the conversation with him, you know, pretty soon after I got back from Taliesin, and right around this time, it was, like, mid March of last year, we had started the conversation. And then when I brought, you know, kind of told him that there was an opportunity. He was kind of like, you got to do it. Like he was all of a sudden supporter. And, you know, I really wouldn't have been able to make the jump without him. He did some things. I won't go into the details, but he did some things and set me up with a few things that was like, it was so important for me to have those things. He really helped me lay a foundation to build a business. And so I do have to give him a lot of credit for assisting me there. And you know, I think it really kind of comes back to like we had such a strong relationship. You know, we had been, I've known him for almost 18 years, and, you know, like I told him, I wore that badge of has seen like a badge of honor. And, you know, I was out in there in the world promoting that office. And, you know, just like, kind of felt like it was time to do my own a little bit. You know, I'm 42 years old, so I'm old enough where I felt, I feel I have the confidence to go out. It's
a, it's a, you know, often people ask me, you know, what's the best way to set up a to set up a business? The majority of people, you know, it's, it's, they usually set up a business in reaction to something they lose their job or, you know, they really hate where they're working at. And they kind of, they kind of leave like that. And often, you know, I do think a lot of people not to say that you shouldn't set your business up early, like, what I mean, like in your late 20s, but that is young, right? And actually, if I'm, if I'm pushed to give, like, the right way to do it, it's much more early 40s. I mean, statistically, people who set up businesses in their early 40s have a much higher level of success just, you know, just, you know, across industries and architecture, particularly because you've kind of developed a core set of skills, particularly if you've been fortunate enough to work for another really good business, and you've picked up things, and you've kind of, you know, you've been crafted, and you know the industry, and you know what you're doing, as opposed to setting up very early, where you're learning on the job. And there's a kind of, you know, there's more of a there's gonna be a lot more spinning your wheels, if you like. So absolutely, there's a lot of advantages that I'm interested as well with. You know, obviously Taliesin and Naka Santi, these are very unique projects from both Solari and from from Frank Lloyd Wright, where they are effectively being architect, developer here, and in a pretty wild way as well. So was there something about, about that, that the architect actually being the, not only the designer, but they were the client themselves for these particular projects? That was the case of arcas anti right? He was the, yeah, pretty much his own client one, right?
Yeah. I mean, you know that it clearly came through, kind of going through those two projects and spending the time there, and, you know, specifically with right stuff, you know, we got a tour from he was, like, the director of the right one of the right foundation arms that oversees that he came and he spent the evening with us, and I actually got to sit next to him at dinner. We actually sat out. And I don't know if you if you've been there, but no, there's a big, kind of flat, plain crowd in front of the in front of the house that is kind of looking out over the desert. And they set up this big table was about 55 people long, and they decorated with lights, and we just had a long table had dinner as the sunset right in front of, I mean, just absolutely spectacular sunset. And I got to spend the evening next to this director. And I, you know, like everything, I just asked him a gazillion questions, right? He. Emailed me after the fact, was like, hey, I really enjoyed talking with you, but I just had never had access to somebody like him. I know he can read things in books, but having that dialog with him about right? I mean, you know, just it was so amazing and like he, you know, even Wright understood the power of business development. Like would throw these galas every Friday night, and he would make his students dress up in suits, and they would have to wine and dine, write fancy friends, right? So even all the way back then, he made that, wow. It was really like that really hit home like, wow. Even he understood, you know, architecture is one thing. Being a great designer is the other thing. But you need to essentially be able to, you know, for lack of a better term, sell your work, sell your ideas, right? Actually get people to pay you for the things that you want to do. So he understood that and taught that to his staff all those years ago. And, you know, I mean, that plays right into the kind of architect, developer like Wright, clearly understood all of that, right, and he played all that to his strengths. And, you know, I I don't know that that's said enough like I think more architects should know some of the stuff that, right? Knew, you know how many years ago, right? I don't know why I got lost in all this time, but for me, like that just moved up to the forefront of my mind, right? And it's like, okay, well, I need to be more in control of a lot more of my life.
He's, he's a wonderful kind of person to to consider in the business context, because of his ability to kind of, you know, he created this character that was client it was client focused in the sense that his clients wanted the experience of working with him, because he was kind of flamboyant and eccentric, and he had this sort of Persona around him that was, was compelling and captivating. And, you know, something like that, where he's kind of putting on a gala, and his team is all in suits, and he, you know, he's creating an experience. He's creating a kind of client experience which was as unique as the the design. And, you know, a lot of people were very hungry for that unique experience of working with him. It wasn't just about the the end product, it was the whole sort of, I think that gets them, you know, and he was, and he was good at making money, he wasn't so good at keeping it as I prod, yeah, I've heard stories of him, you know, deliberately, kind of wanting to squander money because it kept him creatively hungry. That's, that's, that's for another podcast, not something that we'll, we'll advocate for here, but the, but the the kind of creating a personal brand is what we would call it today, even down to his dress, his dress sense, and his and his, you know, and his character and his ability with the press as well will masterful,
absolutely. So
what about arcasanti? Because, again, that was, again, a very interesting kind of prototype for an architect. What was the what were some of the things that you took away from from that particular visit that were underpinning this interest in architect, developer, well,
that, I mean, it was just, you know, it was so different than everything else. We also went to the Biltmore Hotel. We were there in Arizona, which is grand, big, you know, fancy hotel. Then kind of to see Wright's project and to see this as a complete opposite, right? It wasn't a fancy hotel. It didn't have fancy materials. It didn't have big chandeliers, it didn't have glass walls. It was so pure and raw in terms of, like, its necessity to house somebody or shelter somebody, that I found that so interesting, just, you know, again, for the pure contrast of what most of us think of architecture. You know, I was there too on this trip thinking like, when was the last time I walked into a significant piece of architecture that was not a church or a museum? I don't know when, right? I mean, when? I don't even know so going to specifically arcosante was just, you know, these concrete forms, and it was built of the earth. And he was so passionate about this movement that he got, you know, hordes of people to come and live this lifestyle that he that he felt strongly about. Again, it was just like inspiring that God, His vision was so clear, it was so precise. He could clearly. He could communicate it so well that people were just captivated by his story and had to come there, give up all of their, their possessions and like work in this kind of. Of world that had not many people experienced, probably right, and I know back at the time when it was flourishing like now, the the site sits in amongst a bunch of suburban houses and stuff. But I looked back at the the maps when, you know, from the, I don't know, the 50s or something like that, and then this thing was sitting in the desert, there was nothing around it, which I think made it even more interesting and unique. Now it's like, literally, you do the zoom out from Google, which I did, and there's like, ticky tacky homes all around, you know, typical Arizona suburbs, which is also kind of interesting in its own way. But, yeah, just, you know, the clear vision of that story and in his real desire to kind of test all of these structures, was super interesting. And now they, I love how they, they fund the whole thing by making these belts, right? Have you seen these? Like they make these beautiful cast iron Oh yes, yes, I have. That's what they sell on, the kind of exactly in the store Exactly. So I love the fact, you know, going through there was the one project that was like visual textile and audible, right? Because of the bells. Even though the bells weren't necessarily part of the architecture, they were constantly clanging and making noise as the wind blew. So I, you know, visually, I was stimulated. Everywhere was, you know, touching the interesting texture walls, and you can't help but hear the sound of the bells in the background. So really like that one for me, tipped all the senses, which was pretty interesting. You know,
amazing, great. So I like these kind of stories of a sort of revelation that happens on an architectural pilgrimage. I'm reminded of I used to work at RSA Richard Rogers office in London, and he often used to tell the story of how him and Norman Foster when they were at when they were at Yale, they went over to the West Coast, and they visited all the case study houses and kind of immerse themselves in the modern, in the residential modernism that was emerging, emerging at the time, and it was very, kind of pivotal in shaping their thinking. And you know how they would go back and kind of generate their businesses? You know, a powerful seed is planted. And it's really interesting to hear about these two projects, which, you know, they're kind of classics in architecture, and you come across them, but actually putting them alongside the idea of architect developer, which is something that, you know, we're big advocates here, and is becoming increasingly a desire of many firms, is, really, is Very interesting. And kind of, you know, again, effectively, both of these projects, Taliesin and aka Santi, they were architect, developer led models. And they're interesting because they were, kind of, you know, arcasanti was an experiment in in living and community building, and talias was also a kind of Education Center and and a kind of office, and you know that that's a great it's a, it's a, it's a lovely way of an architect, kind of realizing certain dreams. And also nowadays we can put it into a business context of like, what does that look like as as development. So perhaps we can, we can kind of segue into, what does architect developer look like in in your business? So you, you, after this trip, you had this kind of opportunity to work on a project. I'm assuming that was a kind of traditional client architect relationship. You jumped at that. And then where are you with the How does architect developers start to emerge here?
Well, I mean, most of my business right now is fee per service work, and I am very interested in doing more architect developer work. I actually had my first abutters meeting last night for a project that I'm working on. So I have a particular piece of land under agreements here in Boston that I am trying to get zoning relief on to build three townhouses. I have the land is under kind of purchase and sale. I have it under agreement I have control of it, but I haven't purchased it, and it's all in contingency of receiving my zoning variances. And like I said, last night was the first abutters meeting in that process. It went fairly well, you know, nobody was like, kicking and screaming and yelling at me, although, you know, a lot of the commentary was like, you know, construction makes noise, and construction draws trucks, and, you know, how's the trash truck going to get down the streets and kind of, all of these things that really didn't have much to do with me or my building. But, you know, everybody has concerns around, you know, construction happening in their neighborhood. So this is a new kind of endeavor for me. Previously, I had gone kind of more the traditional routes of the architect developer, where I would just identify a piece of property, I would purchase it, I would renovate it, expand it, and then sell it, and I did my first projects in 2016 I'm Boston resident. I live in the kind of borough, Jamaica Plain, and I've done all my projects here in Jamaica Plain, in Rosendale. And in 2016 actually had been hired by another developer I know, to do some Moon lighting. He bought a triple decker and Brookline, and said, hey, you know, we helped me do the design for this. And I had been thinking about kind of architect developer work at that point in time, and I said to him, you know, I would be willing to do this, but I want to invest my fee. And I said, you don't pay me, you know, we'll come to an agreement on fee, invest my work. And then I also invested 25,000 in cash. So I essentially, kind of invested a $50,000 investment into this triple decker. I did all the design work. You know, he paid me some fee, some fee too, because it went off for a while. I kind of shadowed him. I brought the contractor to the table. And, you know, he redeveloped these trip, this triple decker, these kind of very expensive flats and book lines. Sold them all. You know, it was a great process. He was a good guy. At the end of that, I was like, Hmm, why am I not doing this for myself. So I said to the contractor who I brought to the table was a friend of mine, you know, hey, like, I'm thinking of doing this. And he said, You know, I bought and flipped some homes. You know, years past, I got a great relationship with the bank. Why don't we go talk to him? So all of a sudden, we talked to the bank. Bank was on board, you know, we had a team. He was a he was a contractor, and I was the architect. And then all of a sudden, I identify a piece of property in Hyde square up, not too far, actually, from where I live now, in a kind of merging neighborhood. Had been on the market for a long time. It would needed a lot of work. It was a dump. I think a lot of people said, you're gonna buy this for $775,000 you're crazy. And I was like, No, I don't think so. And so we bought it, and we added 2200 square foot addition to it. I turned into kind of two townhouses, three levels each, parking. Each had their own backyard. And, you know, funny story about it, I was, we had gone through the whole process building everything. It was a great experience for me. I really, really enjoyed it. Got to do all the design work, and I was literally working with the stager to stage the unit, the first the front unit, because we were going to put it on the market, and a gentleman walked in off the street, and he's like, Hey, what's going on here? I was like, I'm their unit, so I'm going to be selling them. And goes, Yeah, I know I've been following. I want to buy them. And I was like, they're going on the market this weekend. He's like, no, no, no, I want to buy them. I was like, yeah, yeah, pal, they're going on the market this weekend. And he he was persistent, and so I gave him my email. I said, All right, here's my email. I just contacted me. Contact me. I never gave it a second thought, right? I get home that night and there's an email from this guy, and he offered me $2 million flat. And was like, I want these. And I said, That's amazing, and so amazing. It was absolutely amazing. So that was so that was so I was in another project in like, nine and a half. We did the penny brokers fees or tour them. No, there was just, and I, like, I returned staging. I was, I had the condo docs being drafted with the lawyer. I stopped everything. Was like, I don't need any of this. He bought both units. And, yeah, the kind of restaurants history.
So do you mind talking some numbers there with that one? Because you, you bought it for 750 How much did you put in, in terms of construction? And we,
we bought, I think we closed on it just 775 I mean, we were gonna sell it for, I think around 875 a unit each, which was, that was, so that's like 1.75 so, I mean, I think at that point we were hoping to, you know, make a couple $100,000 return on it. We definitely spent a little bit more than anticipated, but then we ended up selling it for a lot more than anticipated. Yeah, so I think we made like, 28% returns on costs on that one or something. It was a very good return, you know, I, you know, we needed, this was early in the game, so I didn't have a ton of cash in there. So my cash investors did really, I mean, I did very well too. But, you know, the cash investors. Did really well. We were able to give them a really high return on the money they invested in the very short amount of time, which, you know, was bode well for us, because we I knew I would be asking them for money again. And, yeah, so, I mean,
that's such a great that's such a great story. So you're doing this as well, whilst you're working at has seen as well. So you're kind of your side hustle, if you like, was highlighting, yeah, was, um, did David know that you were doing this kind of stuff? That was all kind of
he did, yeah, yeah. So I had, I had, you know, done. I've been doing side projects since, like, 2005 my stepfather was a, was a small scale contractor, had a lot of construction friends, so I did decks and additions. I mean, I think I did 150 side projects on my own in a small scale. And so, yeah, I mean, David was supporting of this, and kind of knew this was going on. Obviously, I tried to keep it ours is the best?
Well, it's one of these things as well that it kind of, you know, when you've got a supportive, you know, when you're when your day job is supportive of this sort of thing, actually, there's a lot of benefit for the firm to have somebody doing this kind of like, imagine, if you're one of your employees is, like, developing this skill set outside by what's their hobby? Oh, they're blooming, doing development right, and their weekends are spent. They're just refining those architectural skills. They're learning a whole load of new leadership skills. They're getting better with construction. I mean, that's a you know, kind of be excited as a business owner if your team members are doing that sort of thing.
Absolutely. I think I wouldn't be surprised if that led to one of my promotions, right? Because I think he understood at that point my entrepreneurial nature, you know, the fact that I was investing in myself outside of the office, and that I'd be, like you said, I was developing a skill set that ultimately could be very valuable for him and the firm and, you know, for future things. Yeah. So, yeah, it was pretty interesting. So we had, we had kind of done that project, and then, you know, got out of it and started looking for another project. And then I identified another project here in JP, and very similar setup to the first one. And, you know, got it under agreement, started the construction, did the design work. We got into it. You know, one thing I actually kind of realized, as I was designing the second project was that, you know, I was kind of developing a prototype. And because of the way Boston is built, Sears, there's a particular kind of Lot type where the house is justified to the front right, and then there's a bunch of unused land in the back. And so I was kind of developing this prototype of this rear kind of addition that could be attached onto the house and slid over so it had some front facing right. And I had done it on the first one. I had done this for the second one, deployed it a second time, and it kind of augmented a little bit as it needed to, but I kind of realized, like, Hey, this is actually something I could roll out to these different site types as I went. So I thought that was pretty interesting. I did it a third time too, but during the second one, you know, one lesson learned that I like to think of with my second one is we decided to sell one of the units pre construction, like we were in construction, you know, and we had been talking to the realtors and my partners, the contractor's wife was our realtor. She had something that was looking for a unit that very similar to what we had. We decided, hey, let's accept this offer, right? We're in construction. Why not walk up a unit, right? Well, you know, I think, for me, in hindsight, that maybe wasn't the best idea, right? You know, because I think, I don't know what I thought. I think I thought at the time like, oh, we have this under agreement. We're going to have money, you know, we'll close a little bit faster. But in reality, though, this was back in 2018 2019 you know, we finished the project. I put the one remaining unit on the market, one open house weekend, I got an offer $100,000 over asking, and so I had sold the front unit, you know, ended up being like the rear unit, which I went through honestly months of the clients showing up on site and questioning everything and calling me for them to close, like, one week earlier than the one I had sold on market. So in hindsight, I realized there wasn't really much benefit to me to sell one of these, you know, pre market, you know, I should have just went to market with both of them. And it wasn't even really about the money, it was the fact that I had actually lost a little bit of control, because you're
not the first architect to share this with me before, actually, where they've sold something like before the completion. Of the project, which, on the surface of it, it seems like it was, you know, there's this stability that comes with it. You're de risking the rest of the construction process, and that comes but then all of a sudden, it's now like you've got a client, yeah, right. And the dynamic suddenly shifts and changes, like, what you're what you're saying, you've now got somebody who's coming on in, on site and and that can also diminish the returns of the other, the other units that you might be developing, or, you know, just starts to have an has an impact on the overall project and your efficiency, in some cases, absolutely.
Yeah, I think it definitely took a little bit longer because of, we were kind of help, you know, we were hand holding the buyer and so forth. But, you know, I like to think, you know, I learned something on each of these projects. And you know, on that one I definitely learned again. This was also in the 2018 2019 market. The market was really good. I don't know, you know if that would be the case today, because the market is definitely different. But if I was to do what I would really need to evaluate, you know, what's, what's the end run here, if it's really just to close a couple weeks early, you know, it's not worth saving two weeks of carrying costs to deal, to lose that control of the project and the process get out. So this
is very, very impressive that, like before you even launched. I mean this, this is the perfect way to launch your own business. You've been doing this stuff as a side hustle, and I'm imagining that you were able to put a little bit of money aside so that when you went, when you kind of stepped out on your own, you had reserves, and you and your wife can kind of thoughtfully plan how this is going to work and and all the all the rest of it. So how many projects had you kind of completed or been through before last summer? So
I did three projects on my own. Yeah, before I stepped out last summer, I tried in late, 2022 2023 the markets are softened again. And you know from when I finished my third one around, sold out around 2020, actually, we got caught in COVID. We had a the project completely under construction with COVID hit, you know, that was, that was a very big learning experience on a song, good Lord. We got through it. You know, we got out of it. As you know, the real estate market just exploded. I put in, you know, 20 offers, bids on things, just outbid cash offers. It was really, really kind of tough. So I kind of closed up shop for a while, all through 22 into 23 when the market started to soften again, you know, tried to buy another house 23 into 24 but it didn't quite work out, because, you know, the banks were really conservative. They wouldn't comp the project out for what I wanted to cop it out as. And, you know, ended up kind of backing out of the deal after I had PNS signed, and luckily I had, you know, the right contingencies in place to get me out of the deal. You know, had to forfeit a few $1,000 on lawyer fees and appraisals and so forth. But, you know, again, learned a lot in that process. And you know, because of that, it made me start thinking about like I need to look at this differently. I can't keep combing the market trying to find something on market. You know, going about this the same way I did in 2016, 17 and 18, because it's a different world. The real estate market is different. It's a different world. And so that was kind of what gave me the idea of, like going back and seeing what's been sitting for a really long time, and trying to figure out why it's been sitting, and the seeing if I can slip in and satisfy some of those needs of the sellers that maybe some other sellers weren't, which brought me to the project that I mentioned earlier, that I have under agreement, where I had seen this house on the market and then sitting, sitting, sitting, sitting, sitting, sitting. And, you know, it's, it's a house that needs some work, and it's, it's a couple that has been there for a long time, an older couple, and they're selling, and they're going to get out of the city and downsize and all of that. And, you know, I started to have some conversations with the realtor, and I realized, you know, they were getting offers in the home, but they weren't getting offers with the right terms. Everybody wants to close in 3040, days, right? You buy a house, do you want to move into your house? Right? These folks wanted, like, a six month, eight month closing, because they needed to get their house in the contract, go out, find another house, get that on the contract, sell the two at the same time, and clean out this house that they'd been living in for the last 30 years. Right? So it actually became not about money, it became about the terms. And so I was able to come in and say, hey, well, I'll pay you full asking, and I'll meet your terms, but in order to meet your terms, I need a year to go through the zoning process so that I can get an additional unit on the lot, which makes it a viable project, right? And so I, you know, you know. First they said, No, we're not interested. I think part of it is they had no idea what I was even asking, right? Like they have. They never heard zoning contingency, or they just didn't know I stayed in touch with them, followed up, followed up. Months and months and months, talking with them, talking with them. Finally, they said, All right, we're willing to hear your proposal. Why don't you come in and meet with us? So I went in, I prepared with a little presentation, kind of who I was, what I was doing, what the process looked like, what are all these terms mean? Sat down with them, and they, you know, were very interested. I also moved to that meeting that they were meeting with another developer, so all of a sudden I was competing for this project that I had just put six months into follow ups, you know, gently, kind of checking in. But the realtor did tell me after the fact. She said, You know, they met with you, and before they even met with the other developer, they decided they were going to move forward with you. Because move forward with you because the way I communicated with them, the way I just kind of simplified everything for them, and I really framed the situation as, like, I want this to be a win, win, right? I clearly want to get something out of this, but I also want you to get something out of this, and I'm not going to sacrifice your win from my wing, right? I want this to really align. We need to align here. I'm going to do this up front, you know, I did that too, also knowing that the zoning process can take some time and I may need some extensions at the end. So I gave them a little upfront. Hopefully they'll give me a little bit in the back. And we've had a really, you know, I got this. I signed the PNS back in August, and I communicate with them every two weeks. I sent them. I've been sending them design drawings. They attended the the abutters meeting last night. So it's really just been about communicating with these folks through the entire process so they know what's going on.
So basically, you've, you've kind of paid for the ability to purchase the house, once you've gotten the the approvals in place, and then they're going to get a little bit of the there'll be, like, a new asking price based on the approvals. Is that correct? Like, well, no
price is set. Yeah, yeah. Okay, fine. It's going to be what they wanted. They had asked for a price. We have that set. You know, there's really not a lot of risk for me, because I'm the architect. I was able to do all the design myself. I'm able to do all the kind of municipal permitting myself, you know, I even worked a deal where my, you know, typically there's a there's, they have a realtor, so the realtor is going to get a fee from them. There's also their purchasing agent fee. So my attorney that I'm working with is also a real estate broker, so we are going to get the the purchasing agent brokers fee. So so the real interest fee is actually going to pay my attorney for all the work that he's doing with me. So I'm actually getting a fee at the end of this as well out of the real estate agent, because I didn't come with an agent, and that's enough to pay for the lawyer fees. It's actually going to pay for the survey. And so really, right now, all I have is invested in here, is time. I mean, I have a lot of time invested in here, and I am very committed to seeing this through. But, yeah, I was able to kind of cleverly structure a deal where I didn't have to put up a lot of capital. You know, we did a two and a half percent deposit, which is refundable. Um, and, you know, a lot of that was really just kind of laying it out for them, like, you know, I'm not going to spend a year of my life going through this. So they
know then that, you know that you've been totally transparent with them about the strategy moving forward, and that you're absolutely, you're taking it on for a development project, and there's going to be, did they ask any questions about the kind of the valuation? So when you were coming to a price of, like, how much you were because you're you're kind of cementing in an asking price for it. How do you cement that in? What happens if, once you get zoning, the value of the land shoots up, and then they start asking for more money. Or is it it's it's already been negotiated, and they're kind of locked into the agreement. Yeah,
we have a purchase and sale agreement signed. So there's really no bound out of that I gave, you know, I agreed to, to pay what they wanted their asking price. Yeah. So there's really no negotiating back either way, you know, they could try and obviously break the purchase and sale agreement, but that's a legal binding document, yeah? So you can make leave, yeah, so you can, right? And I don't think we're going to get there, you know, they, they need to get this house. They have some mobility issues. They're living on two floors, you know. Um, they need some help, and, you know, and I've even offered to help them find their next home, you know, I'm totally willing to kind of go for this ride with them, because they had been on this ride with me now for the last quite a few months. So that's kind of a new approach that I'm trying to take, you know, I just, I know I can't go out and compete in this market. You know, people are paying way too much money for things that I don't even know if it's too much money for things, but it doesn't work on the back end, you can't buy something, invest a bunch of money into it and then sell it for any kind of a profit at this point in time. So I'm really looking for, you know, things outside the box. I have a couple of, you know, I'm not ready to share them here on your podcast, but I have a couple other things in the works, some some other development ideas that I am, you know, they're, they're going to be slow to materialize, but one of them, particular has to do with some new zoning that's going to take place in The city of Boston that's about to come out. And there's some real opportunities here that I'm sure a lot of people are going to capitalize on, but I would like to beat one of them when this new zoning comes out, and so I have some irons in the fire there that, you know, again, those are really long plays. It could be a couple years before something comes out of them, but if something did come out of them, you know, it could be pretty exciting for many. So it's something for me to look forward to.
I love it. What would you say to other architects who are interested in kind of pursuing this pathway and and what are your kind of more generalized thoughts about architects becoming developers. Is it A, is it a good business model? Is it something that you feel like actually can solve a lot of different problems, like, you know, actually kind of getting more housing onto the, you know, onto the marketplace. Does it have the kind of creative agency that lots of architects are aspiring towards, yeah, possibly get your thoughts on the kind of more broader context of architects becoming developers, and what your thinking is about that, yeah.
I mean, I absolutely think we are really well positioned for it, you know, I think the way architects operate, the way we think, you know, we were, you know, developers do a great job at it too, but I think we approach it a little bit differently, right? And, you know, we need to learn how to one manage the finances, right? Like money is really important in development, but I think we can also have money have an equal weight to its impact, right, to its whether it's a visual impact or it's community impact, we can decide to weight all of those things a little bit more evenly where, you know, if somebody else was doing it, they they can weigh things the way they want, right? And I know, as an architect, and I, you know, said it last night to the community group like, you know, obviously this needs to make financial sense, but I also want to have an impact, right? And, you know, with some of my previous projects, you know, they were very nice houses and very nice buildings. You know, they're, they're not going to be on the cover of dwell. But for me, you know, they were so gratifying as a design process. You know, some of the most gratifying work I've done because I had to design it. I had to figure out how to budget it, execute it, you know, it wasn't, you know, I didn't collide everything in marble and stuff, but, like, even dealing with, you know, the kind of normal products, and how do you do a really nice project that doesn't break the bank, right? That's approachable to most people, I found that to be a super interesting design challenge, and I think architects are well suited for it. You know, I will always do a fee for service work, because I, I do, actually, I do enjoy my clients, you know. And a lot of my clients have been some of the people I'm working with now. You know, they're really becoming friends. You know, I really love that connection with them, but I also still love the control and the ability to kind of do things, test things a little bit differently as an architect led developer, right? I think it's going to be another tool in my toolkit. You know, I really want to be able to kind of do both, and kind of switch between the two. And again, I think, you know, some of the client driven stuff helps inform some of the architect, developer driven stuff. And I think, you know, understanding numbers, finances, budgets, how to ask for money in an appropriate way also helps me win work with my private clients, right? Because some of my private clients are real estate developers, and, you know, I can speak a language with them, even though, you know, I'm doing a private home for them, I think they just understand that I have a little bit of an understanding of it. All right? I'm not an expert in any one of these things, really. But. I can kind of have an intelligent conversation, you know, about around finance, around the cost of construction. It's not just about the visual, you know, it's not just about making the pretty picture. It's actually about something that works functionally for them as well as being beautiful, right? Those two things are tied handy pant.
I think that kind of financial fluency is such an asset for architects and from a client perspective, to be able to have a proper conversation about the financial mechanics of your project and the architect to understand it and have first hand experience of it is a it's an asset that's an asset that's an asset for a developer, they, you know, they're, kind of, you know, developers I've spoken to who have worked with architects like that, often very, very favorable to it. And it's, it's a, it's a good working investment for the developer in their own projects, to have consultants who get it basically
Right, right. And I've also seen, even, you know, on the I've always promoted that these projects that I was selling was developed by an architect, and that I've been told by some of the realtors, has been received very well, right? And I think there's maybe a, you know, the perception that an architect is not just going to come at this from one perspective, like I was saying, right? Like the quality is there, the design intent will be there, and it's, it's worked out for me. You know, I even offered, and it's kind of played out a couple of times. I offered, I don't know what I did, I think was like 20 hours of design service with the sale of the house. So I said, you know, if you buy this unit, you get 20 hours of my time. And one, actually the the first one I did, he did utilize that. We added some more cabinetry, we finished his basement, and I did all the drawings and design stuff for free that included may as part of the sale. I love. I don't know that anybody else actually ever took me up on that, but it is there. I will definitely be offering that with my latest project. But, yeah, you know, it's just trying, trying to figure out ways to introduce a little something else, right, to differentiate yourself, especially back then, when the market was, you know, there was, it was so hot and crazy, like anything I could do to differentiate myself or add a little bit more, you know, was very helpful. And I even met, I met, I think I met all the people that have purchased my homes. I didn't sit behind, you know, lawyer curtain. I went to closings. I wrote the condo docs with them. You know, some of my even went to the banks and helped them, you know, create the commercial bank accounts they needed to run the small associations. So I was really hands on with folks, because I really cared about the projects that I was developing, amazing,
brilliant. I think that's the perfect place to conclude the conversation there Matthew, a very inspiring story, and hopefully I have you back on the on the show, so we can talk about these other developments and and how you kind of further evolve the architect business model, but really, really insightful stuff. So I appreciate you taking the time to chat with us
today. Yeah, thank you. I do want to say thank you to you, Ryan, like you know, actually, I learned of the podcast because you interview, David has seen my boss. I hadn't heard the podcast before that. I think was again, it was 373 I listened to the podcast and immediately went back and consumed all 300 of the previous episodes, and I've listened to all 300 cents. I'd even listen to all of your UK version of the podcast. Love it. I think if you asked any of my professional colleagues and friends about Matt and Business of Architecture, they say, Oh yeah, Matt loves business. I just, you know, the way you guys talk about things, I just, you don't really hear that in the industry a lot, right? You bring these ideas forward that I found very unique and inspiring. And I really do want to commend you for that. I think it's it's super important. I found it very inspiring. You know, for me to jump out on my own, it was all about confidence, right? I needed to build the confidence to know that I could go out there, survive on my own, win the work. And there's all, I look back and there's all these little things that contributed to that. And I think this, this podcast, is definitely one of them, definitely one of them. And I do have to say on a personal note, you know, I recently lost my my father earlier this year, and you know, prior to him passing, I had to take him to a lot of appointments, and he's not a big he wasn't a big talker, and, you know, he's 80 years old. And so I ended up starting to play the Business of Architecture podcasts with him. I would save them up, because we'd sometimes have these, like, two hour car rides, and it was like, otherwise it was just quiet. And I would save the. This is of architecture podcast. So we would listening listen to them together. And I don't think he ever listened to a podcast in his life before, you know, and he would always be like, I can't believe they talk about this kind of stuff on a podcast. This is, like, amazing. And so, you know, I really appreciated that. And there was something that we really could bond together over, you know, for those two hour car rides. So to keep up the good work, I'm definitely going to be listening. I'd love to come back. And honestly, it was a pleasure meeting you.
Absolutely heartwarming story there. I think that's one of the most touching stories I've heard. So my condolences were about your about your father, and thank you very much, and you know, and thank you so much for your support and for listening.
Yeah, my pleasure. Can't wait to hear the next one, and
that is a wrap. Listen up, architect nation while you're slaving away on that latest project that you've undercharged on. There's a $250,000 leak in your business that nobody's fixing. Your team's working overtime. Clients are happy, but your bank account doesn't match the sweat equity you're pouring in. The revenue capacity planner exposes exactly where you're hemorrhaging money and shows you how to capture the value you're already creating, but not charging for all in just 30 minutes, get this tool 100% free by going to Business of architecture.com forward slash capacity. So thank you to our recent listeners who left reviews for the podcast on iTunes. Your reviews help others find this podcast. So the rising tide raises all boats to be acknowledged on the show. Open up the podcast app on your iPhone, search for Business of Architecture, and after clicking on the show, scroll all the way down to the bottom to leave a review. Today's episode of Business of Architecture show is sponsored by Smart practice TM, the world's leading step by step solution for small practice owners that want to structure their existing practice so the complexity of business doesn't get in the way of the architecture. Because you see, it likely is in your architecture skills that hold you back is the business aspects of running a practice, managing projects, people, dealing with clients, contractors and money. So if you're ready to quit being a glorified administrator and get back to architecture again, go to smart practice method.com to discover the proven simple and easy to implement smart practice method that is revolutionizing firm management for firm owners and teams. Hey, Ryan Willard here, and I want to thank you for joining us today and remind you that the views expressed on this show by our guests do not represent those of the host, and we make no representation. Promise, guarantee, pledge, warranty, contract, bond or commitment, except to help you conquer the world cup, a DM.
