Design/Build as a Business Model – with Architect Developer Jim Zack

Welcome back to Archipreneur Insights, the interview series with leaders who are responsible for some of the world’s most exciting and creatively disarming architecture. The series largely follows those who have an architectural degree but have since followed an entrepreneurial or alternative career path but also interviews other key players in the building and development community who have interesting angles on the current state of play in their own field.

This week’s interview is with Jim Zack, founder of the architecture and construction company Zack/de Vito based in San Francisco.

Prior to studying architecture, Jim was a carpenter and a builder. He carried out his first design/build development with his father when he was 23 years old.

He then opened his own practice after grad school. Having always been a hand-on kind of guy, Jim quickly became an expert in design/build development. His practice’s projects cover residential, restaurants and small commercial sites, and Jim also takes on his own residential developments.

Jim now has 25 years of experience as an architect and 40 years as a builder behind him. We were eager to ask him about his career decisions, how his business model changed over the years, and his take on real estate development.

Enjoy the interview!

What made you decide to found Zack/de Vito? Was there a particular moment that sealed the decision for you?

I have always been very independent and self-motivated, a leader, not a follower. I was never a ‘good employee,’ preferring to forge my own path since I was quite young. I had my own small construction company when I was 20. I started my own office right out of graduate school, it was not a ‘decision’, it is just what I did.

I rented a studio with some friends to have a place to work and build things. I spent about one month looking for a job. The second interview I had was for a young architect I knew. Instead of offering me a job, he asked me if I could build a custom table for an office. It was my first commission. I never looked back after that.

I was an obsessive maker, I had to build things.

In addition to my independent streak, I was an obsessive maker, I had to build things. I set up a small workshop and started fabricating objects for other architects.

What is your firm’s core specialism?

Over the years we have done a variety of projects but the mainstays of our work are custom, modern residential, and restaurants. We do an occasional commercial project, offices, stores, etc., and a few private educational projects, but these days 75% is high end, modern houses, small multi-unit or mixed use and restaurants.

Our ideal project is a new one- or two-unit urban building where we can do both design and construction, and a client who appreciates modern design and a high level of craft.

Your company has now been in operation for 25 years. Did you have to adjust your business strategies over the years?

Yes and no. On the one hand, I feel we do more or less the same thing as usual, but of course we adapt to the times: more digital, more sophisticated clients, higher budgets, etc.

One thing that never seems to change is that we are bad at marketing; we never do enough so we always seem to need more work even when we are busy. Based on my conversations with colleagues, we are not alone in this!

Looking back, what was the best decision you made for your practice?

It would have to be to embrace design/build on our own terms, doing what we know, and to trust our business instincts. For 10 years, I fought the idea of doing construction work; I wanted to be a cool, mod designer, not get my hands dirty. Perhaps in the early 90s design/build was not cool like it is now. I tried to stop building a few times and fortunately failed in that effort, and now we embrace design/build 100%.

An equally important decision was to have my wife, Lise de Vito, quit her job and join my firm as a partner. Working and having a family has been easier and more successful because of her involvement.

You told us that you carried out your first design/build development with your father when you were only 23 years old, even before you went to architecture school. What did you learn from it?

Design matters!! These were terrible houses, but it did give me insight into the whole idea of building and selling.

What are you working on right now?

We bought a rare vacant lot in a good neighborhood of San Francisco. It is zoned for two units, and instead of two flats we got a variance to have two detached structures on one lot, a 2,900 sq ft house at the street, and a smaller 1,800 sq ft house in the rear yard. We are at the tail end of a two-year permit process and will break ground in the spring, then sell them as condos.

For clients, we have a couple of smaller residential renovations, then a series of smaller multi-unit and mixed-use projects – 2 units, 3 units, 4 and 5 units and one that is 9 units. We also have an over-the-top wine country estate, a great new, modern house and guesthouse on top of a hill in the Napa Valley. It will be finished in 2017. We just finished an office for some friends who are landscape architects, and we have a couple of restaurants. About half of these projects are design/build.

What is your strategy to find new sites and to get a project of the ground?

I am always looking at local real estate; I get feeds form a couple of realtors and know most of what is available. I guess I am a real estate geek, always looking for opportunities. We have a client who bought the site next to the one we were working on and negotiated a deal to be a 1/3 partner in the second project, five units over commercial. We are open to creative partnerships but we are also cautious; you have to have projects work out when you share them.

For architects who know very little about real estate development, how would you break down the process of getting the first project off the ground?

A tried and true approach is to buy something you can invest and live in, maybe a duplex, but something you can put ‘sweat equity’ into. Lack of financing also seems to be a hurdle but the money is out there if you can cultivate those connections. Loans are easier to get but you still need your 20% equity.

In a stable real estate market maybe try and get the seller to finance the land sale. This does not work on my area; land is scarce and there are multiple buyers for any opportunity. There are also crowdsource web sites like realtyshares.com where you can raise capital.

All architects know how to manage a project, so making the leap to managing everything is not that hard.

Also, learn about real estate, financing, loans, and of course construction. All architects know how to manage a project, so making the leap to managing everything is not that hard.

Do you have any advice for archipreneurs who are interested in starting their own business?

Understand your own comfort level for risk. There is no doubt that working for other people on their projects and their money is easy and safe. Development is not for the faint of heart. If you are a low-risk tolerance person, development may not be for you. Entrepreneurs are by definition risk takers.

As far as starting out on your own – do it when you are young and can afford to lose, or wait to know the ropes and can cultivate clients.

As far as starting out on your own – do it when you are young and can afford to lose, or wait to know the ropes and can cultivate clients. I had a unique background that gave me the confidence to go at it alone early on. Many people just do not have the experience.

How do you see the future of the architectural profession? In which areas (outside of traditional practice) can you see major opportunities for up and coming developers and architects?

I think there are huge opportunities in figuring out how to weave technology and architecture. I am not sure how, but I do think there are new ideas waiting to be cultivated.

I recently met a young architect who had just launched a platform to quickly and affordably allow architects to set up a new website. No out of pocket costs; use his templates and pay a monthly fee. He is rolling out features specific to how architects need to market. As an architect, he knows how to do this; a tech-focused person might not get it. Check it out here: monograph.io

I also see more clients who appreciate our one-stop shop. We can do more, not necessarily for less, but for less hassle. We can design, build, do interiors, help on branding, design furniture, etc.

About Jim Zack

Jim Zack is a California native and the founding principal of Zack/de Vito Architecture + Construction. He has been practicing architecture since 1991 and building since 1977.

His professional experience covers a diverse range of project types with an emphasis on modern residences and restaurants. Prior to studying architecture Jim was a journeyman carpenter and contractor in his hometown of Carmel, designing and building his first residential development when he was 23. The current emphasis of his firm is on completing well crafted, design focused design/build projects.

Jim received both a Bachelors and Masters degree in Architecture from UC Berkeley and is a California licensed architect and contractor. He lives in San Francisco with his wife and partner, Lise de Vito, and their two kids. When not designing and building, you can often find him on two wheels – cycling or racing motorcycles.