192 - How Spec Home builders Do the math - Profits, site selection, comparables with Tomas Garcia

Looking to build a successful career in the real estate industry? What if I told you math is the key?

In this episode of PTB, host Dominic Rubino engages in a mathematical conversation with Tomas Garcia, a successful fix and flip developer and co-founder of Arx Technologies. Their discussion takes a deep dive into the real estate industry, covering topics ranging from identifying profitable investments to using innovative technology to streamline decision-making.

During the interview, Garcia jumps right into the importance of understanding the math behind real estate investments. He says, "Being able to quickly identify that this site is just not gonna pencil, it's not gonna make sense" is a critical practice in the industry. This approach allows investors to save time, energy, and resources that might otherwise be spent on unprofitable sites.

Garcia also talks about the significance of local zoning regulations, which can make or break a project. "You must be aware of the zoning rules in the area you're investing in. Otherwise, you may find yourself in a situation where you can't build what you initially planned, which can be a costly mistake," he advises.

Furthermore, Garcia highlights the importance of accurately predicting costs when building a financial model for a development project. He explains that getting the prediction wrong by just a few percentage points can significantly impact a project's profitability. "It's your responsibility to know your costs and make that prediction as accurate as possible," he says.

Rubino and Garcia also discuss the impact of technology on the real estate industry. Garcia predicts that technology will continue to play an increasingly significant role in helping developers and investors make informed decisions. Arx Technologies, the company he co-founded, provides innovative project management tools and software that streamline the construction and development process.

In addition, Garcia and Rubino touch on the importance of time in development projects. Garcia emphasizes the need to be mindful of the time taken for designs and approvals, as it could significantly impact a project's return. "Time is so important when it comes to figuring out whether or not a project actually makes sense for you to develop," he says.

Through the interview, Garcia's insights offer valuable advice for those looking to thrive in the real estate industry. By understanding the mathematics behind successful investments, staying informed about zoning regulations, and leveraging technology to streamline decision-making, real estate professionals can position themselves for long-term success.

As Arx Technologies continues to expand and adapt to the ever-changing landscape of real estate development, it will no doubt continue to play an integral role in shaping the industry's future.