On today’s show we’re talking about pragmatism.
It’s easy as real estate investors to be idealistic and come up with solutions that are innovative and best in class. On today’s show we’re talking about a number of examples where complexity, or cost often force a simpler solution.
For our first example, we are talking about a commercial property that will house a restaurant. In commercial applications, we know that garbage containers that are recessed into the ground have several advantages. #1, they are barely visible at the surface. #2, they control smells much better. #3, can hold more than an above ground solution. Today we learned that if we need to dig a hole to semi-submerge these trash bins, we will need an environmental assessment, and an archeologist to oversee the excavation. But if we use surface containers and a wooden fence around it, we don’t require any such approvals. Since trash handling is not truly a first order value added component to the commercial product, the added bureaucracy is preventing the better solution from being implemented.
In our second example, we’re talking about a design that was completed with input from the client, but with no input from someone who understands cost effective construction. We had to spend a few hours value engineering features out of a property that did not need to be introduced.
These are the types of tradeoffs we are examining on a daily basis. We’re not a general contractor. We hire general contractors. But unless you are willing to immerse yourself in the decisions that are being made, you will become the victim of decisions that are made for you. Sometimes those decisions will get you a finished product, but at a high cost and often with high complexity.