Zuzuche, a global self-guided tourism platform, announced on Wednesday its recent completion of round-D financing worth tens of millions of dollars. The funds are to be used for strengthening product research and development, supplementing the global operations team, expanding the Chinese market and improving customer service capabilities.
Up to now, its business covers more than 6,000 cities in nearly 200 countries and regions, and it has over 200,000 stores around the world. Its services include international car rental, Chinese car rentals, scenic spot tickets, local entertainments, free GPS in Chinese, 24-7 global customer service in Chinese and English, insurance and other self-guided tour related services. More than 30 million Chinese tourists have used its global self-guided tour services.
Regarding its international business, Zuzuche keeps up with market changes in consumption trends. It has set up flexible teams for different regions and towards different policies, formulating personalized operation strategies, and helping car dealers with operational difficulties.
In terms of its domestic business, in Q1 2020, Zuzuche expanded its cooperation with car dealers nationwide in a tiered and zoned manner, securing contracts with nearly 3,000 domestic car dealers within four months, covering more than 600 large, medium and small cities and regions in China. The compound growth rate of the domestic car rental business since its launch exceeds 470%.
In addition, Zuzuche is in cooperation with leading enterprises in different fields such as Fliggy, China Mobile Bank’s JegoTrip and Ping An Insurance. It has constructed a complete global self-guided tour service system covering vehicles, insurance, value-added and after-sales services.
Li Bin, the co-founder of Zuzuche, said that complications caused by the pandemic will eventually pass, and only the most durable companies can survive. In the future, Zuzuche will aim to further develop the global self-driving eco-chain and provide users with a sustainable and independent travel experience.
5-0: Supreme Court restores National Assembly, sets aside deputy speaker’s ruling
The Supreme Court has set aside the ruling issued by the deputy speaker on the no-trust vote against Prime Minister Imran Khan, and restored the National Assembly (NA).
The court ruled that President Dr Arif Alvi’s decision to dissolve the National Assembly was “illegal” and restored PM Imran as well as his cabinet.
The top court also ordered National Assembly Speaker Asad Qaiser to summon the session on Saturday (April 9) at 10:30 am, saying that the session cannot be adjourned without the conclusion of the no-trust motion.
“If the no-confidence motion against the prime minister succeeds, then the assembly will appoint the new prime minister,” the court order said.
The order further noted that the government cannot interfere in the participation of any lawmaker in the assembly session.
Chief Justice of Pakistan (CJP) Umar Ata Bandial said that the court’s verdict was “unanimous.”
“The current issues are done away with,” he said.
The top judge remarked that the order will not impact proceedings under Article 63 of the Constitution.
Reacting to the development, Leader of the Opposition in the NA Shehbaz Sharif said that the people of Pakistan have won today.
“Mubarak to all who supported, defended & campaigned for the supremacy of the Constitution. Today, politics of lies, deceit & allegations has been buried,” he said in a Twitter post.
A five-member bench, headed by CJP Bandial, had been hearing the case.
At the start of the hearing, PM Imran’s counsel Imtiaz Siddiqui argued that the scrutiny of parliamentary proceedings was not part of the judiciary’s mandate. “The court should ask parliament to clean up its mess,” he said.
Justice Bandial, in his remarks, said that it was clear that the April 3 ruling of the deputy speaker was erroneous.
“The real question at hand is what happens next,” he said, adding that now Attorney General of Pakistan (AGP) Khalid Jawed Khan would guide the court on how to proceed.
“We have to look at national interest,” he said, adding that the court would issue a verdict today.
Responding to Justice Bandial’s comments, Khan argued that everyone should be loyal to the state, adding that he was not defending the ruling.
“However, I think new elections are the only solution,” he added.
Security beefed up
Meanwhile, in anticipation of the verdict being announced, security was beefed up around the Supreme Court complex.
During the hearing on Wednesday, the chief justice had sought the record of the National Security Council meeting from the government’s legal team.
The top court had also questioned the basis on which the speaker issued the ruling. “Can the speaker announce such a ruling without presenting the facts,” the chief justice asked the government’s legal team, adding that this was the constitutional point on which it had to make a decision.
Barrister Syed Ali Zafar, appearing on behalf of President Dr Arif Alvi, argued that in view of the constitutional crisis, the best and the only solution lies with the ultimate sovereign i.e. which are the people of Pakistan. The only remedy available is election. He submitted that since the appeal has been made to the people of Pakistan and elections are to take place in 90 days then as per the established practice and prudence, the Courts do not and should not interfere at this stage and let the people decide.
The chief justice asked the counsel does he mean to say that the constitutional crisis can be resolved by going to elections? He said if the opposition has any grouse they should go to the people, adding but there is an element of trickery.
He said the dissolution of the Assemblies is an independent act undertaken by the president under Article 48(5) read with Article 58. At the time, no resolution of no confidence was pending against the prime minister and, hence, the dissolution cannot be questioned under Article 48(4).
Ali Zafar said that the petitioners have challenged the ruling of the deputy speaker National Assembly and asked the apex court to examine the validity of the ruling. He said the possible direction to the Speaker to hold the no-confidence vote, in his opinion, will encroach upon the jurisdiction of the Parliament.
Justice Bandial questioned though it is not allowed [examine the parliament proceeding], but then there is constitutional violation, adding in Article 95 the procedure has been prescribed. He said that the limit is crossed when the constitutional provision is violated. The privileges are under the Rules, but there are obligation under the Constitution, if the obligation is violated then the court can look at it.
Ali Zafar argued the concept of trichotomy of powers/separation of powers between legislature, judiciary, and executive is well-enshrined in our Constitution under which each organ has its specific role.
He contended that the Parliament has certain privileges under the procedures – the fundamental and the foremost privileges being that the Parliament is the sole and exclusive judge and master of its own proceedings and business and no decisions or rulings made while conducting parliamentary proceedings/business are justiciable. It is also a part of Parliamentary privileges that no officer, including the deputy speaker, is subject to jurisdiction of Courts in respect of Parliamentary privileges/proceedings.
Ali Zafar cited the judgments of Pakistani Courts, the crux of them is that any decisions taken during and within the parliamentary proceedings/business of Parliament are not justiciable. It is only if a proceeding is outside the scope of proceedings in parliament that the court can examine.
He stated that the vote of confidence is clearly a matter of proceedings in the National Assembly and any ruling passed by the Speaker or Deputy Speaker in respect thereof or during the same are not justiciable.
Justice Bandial remarked that Article 69 is okay but something unprecedented has happened. The resolution for no-confidence vote was likely to be succeeded, which has the backing of the constitutional provision but at the last minute it was scuttled. If today, it is permitted, then what SHCBA President has cited the example of Hitler Nazis party remain in power.
The chief justice questioned whether the Speaker has power to give Ruling on point of order which was not included in the agenda item of that day of Parliamentary proceeding. He said the Deputy Speaker, Qasim Suri, without giving the reasons rejected the resolution. Whether the Speaker can ignore the mandate of Article 95 of the Constitution.
Earlier, Babar Awan, representing chairman Pakistan Tehreek-e-Insaf, informed that three Pakistani diplomats in Washington, including Head of Mission, Deputy Head of the Embassy and Defence Attaché, met with the USA Assistant Secretary. They conveyed the US concern against Pakistan to Foreign Office in Islamabad. The cipher was sent to Foreign Office on March 07, 2022. The cipher was deciphered in FO to know that conspiracy was hatched against Prime Minister Imran Khan to topple his government.
When Babar Awan was giving detail, the attorney general came to the podium and said that the issue related to the PM or the State; therefore, it should not come from the counsel of the party. The counsel then asked the court to constitute an inquiry commission as the PM wanted thorough probe on the letter. Upon that Justice Jamal Khan Mandokhel said when the prime minister is unaware who is involved in the conspiracy then how he made important decisions.
The chief justice rejected the perception that the apex court is delaying the judgment on suo motu.
He said: “Unfortunately, yesterday (Tuesday) adverse comments were made that the court is delaying the case. We have to hear all the parties and without hearing the other side can’t pass ex parte judgment,” the CJP added.
Earlier, the top judge during Tuesday’s hearing had questioned whether the speaker can give a ruling on a point of order which was not included in the agenda item of the day of the Parliamentary proceeding.
CJP had remarked that Deputy Speaker Qasim Suri rejected the resolution without giving appropriate reasons.
While adjourning the hearing on Wednesday, Justice Jamal Khan Mandokhel had said the court will pass a judgment that will be in the interest of the nation and binding on everyone.
Best Business Ideas for 2022: Healthtech
Healthtech is one of the key drivers of the UK startup scene, and is only expected to get bigger in 2022 and beyond
Healthtech is due for a huge year ahead, and small businesses looking to launch in this sector have plenty of cause for confidence. The technology can be complex, and sensitivity to patient needs must be paramount, but developing digital tools to make people healthier and happier has a clear appeal for emerging entrepreneurs.
Last year alone, the UK healthtech sector attracted over £2.9bn in funding. In fact, healthtech is the UK’s second-biggest tech sector in terms of venture capital investment.
The COVID-19 pandemic forced an immediate evolution in healthtech, and one that will have long-term impact. It demonstrated just how well remote medicine can work, and the vital role tech has to play in disease prevention and treatment.
Healthtech is a big, diverse sector, but we’ve picked out four areas that are expected to grow rapidly in 2022 and beyond and could be great to get involved in:
- On-demand medication
- Care apps
- Fertility tech
- Final thoughts
On-demand medication – the next generation of pharmacy
Last year, we picked out on-demand health and wellness as a business idea, which covered things like Zoom gym classes and wellness apps.
Now, there’s the on-demand pharmacy.
Pharmacies haven’t really changed much for hundreds of years. You get sick, you go to the place with the medicine to make you feel better, you pay for it, and you (hopefully) feel better. And, if you have an ongoing condition, you go there again and again and… well, you get the idea.
Now though, a bunch of startups are dragging the pharmacy into the 21st century, and the COVID-19 pandemic means this new approach is needed more than ever.
You sign up, select the medicine you have a prescription for and how much you’ve been prescribed, pay for it, and then it’s delivered to your door. If you have a repeat prescription, then the service will remind you when it’s time to order again. You still need a GP to write the original prescription (although as we’ll see later, you might be able to do this online too), but as for the rest of the process, you need never step into a pharmacy if you don’t want to.
During the past two years, these services rapidly went from handy to vital, with vulnerable patients able to stay at home and still get their medicine.
This triggered huge growth in online pharmacy, with the dispensing volume increasing by 45% from 2019 to 2020 alone.
Like so many things, once we got a taste for the convenience of simply having our prescription medications delivered, we didn’t really want to go back to the old ways.
Jon Higham, managing director of Medicine Direct, says that prioritising patient safety and creating personal relationships are key.
On patient safety, he notes that Medicine Direct has identity checks in place “to make sure that people are who they say they are when ordering with us”.
Moreover, “it is essential that online consultations are more comprehensive and provide our prescribers with a full picture when it comes to a patient’s health, symptoms, diagnosis and medical history.”
In terms of building relationships with patients, Jon explained that:
“The online pharmacy sector is still a growing space, with many people yet to warm to the idea of their healthcare being managed by a doctor or pharmacist that they have never met.”
To try to build that trust, Medicine Direct ensures that patients know exactly who is assessing their online consultations, gives them direct access to healthcare professionals, fact-checks every medical claim, and lists a named author for all of its content.
On-demand medication business ideas
Start an online pharmacy
This does require some specialist knowledge. But while companies like Echo and Medicine Direct have made their mark, the sector still has huge potential. Despite the growth already recorded, the online pharmacy sector still only represents approximately 4% of the overall UK pharmacy market, so there’s plenty of opportunity for new entrants.
Help existing pharmacies get online
If you don’t fancy starting an online pharmacy from scratch, then you could work with the UK’s existing network of pharmacies. For example, if you’re a web designer, then you could specialise in creating stylish and informative pharmacy websites that easily let people order online, and offer guidance for online consultations.
Care apps – how tech can help solve the social care crisis
We’re in the midst of a social care crisis, with Age UK finding that 1.6m people aged 65+ don’t receive the care and support they need for essential living activities.
And it’s only going to get worse. There are going to be more and more elderly people as we progress through this century, who are going to have a range of needs to be catered to.
The existing setup is quite frankly not up to this. Decades of funding cuts means it’s often extremely difficult and time consuming to access care (which can be anything from help with chores like shopping or washing up to administering treatment for debilitating conditions), and only a small percentage of people get government help.
For example, research by The King’s Fund think tank found that, between 2016 and 2020, the number of people requesting social care support increased by 120,000, but the number of people receiving long or short-term support fell by 14,000.
The upcoming increase in national insurance to help pay for the UK’s rapidly mounting social care bill should help a bit, but tech has a crucial role to play too.
For example, Cera Care placed second in this year’s Startups 100 and combines an army of professionally trained care assistants with an app-based approach that means carers spend less time filling in paperwork. Patients can even arrange home visits within 24 hours.
The really clever bit is that Cera’s tech can predict and prevent health deteriorations before they occur, helping to manage conditions like dementia and diabetes without the need for hospitalisation.
To solve a different need, Lisa Robinson founded Companiions after a long career in advertising. Again, the service is app-based, and people can quickly and easily book the help they need. However, as the name suggests, this is less about advanced medical care and more about ensuring that people can easily access help with basic daily tasks – or just a friendly face for a few hours to ensure their safety and help stave off loneliness.
The app connects “organisers” (generally the children or partners of the people who need assistance) with self-employed “companions” that offer their services at times that suit them. Companions explain the skills they have in their profiles and organisers can then choose accordingly, guided by reviews and geographic locations.
There’s no long-term commitment, making Companiions a great fix for elderly people that just need occasional assistance rather than regular care.
Companiions founder Lisa Robinson shared her thoughts on the sector and gave some advice for any potential new entrants.
Firstly, she pointed out the simple demographics that are driving the growth of the care sector, citing ONS (Office of National Statistics) data that over 60s currently make up 23% of the UK population, and that the number of 85+ year olds is expected to double by 2041.
Just as importantly, “increased globalisation has resulted in people working longer hours away from their loved ones, and this has put extra pressure on a care sector that now needs to grow exponentially to meet the demand”.
Lisa therefore argues that “there’s a requirement for a new category of care, one that combines health and wellbeing, social interaction and common interests rather than the previous ethos of go in, get the job done and leave”.
Finally, Lisa had the following words of wisdom for anyone thinking of starting a care app business:
“Think about what differentiates you from the norm – what are the customer pain points in the current system (lack of supply) and what do loved ones want (to stay safely and affordably at home). Make sure you build a business around the needs of your customers and use feedback to build a truly helpful platform.”
Care app business ideas
Develop a care app
While this might sound like it would require some serious technical expertise, you can always outsource that part if you need to.
The crucial part is the idea behind your app, so try to think about problems in the current care system and how they could be solved – it might be a good idea to focus on how people manage specific conditions rather than trying to provide a universal fix.
For example, assistive technology company How do I? worked with the Alzheimer’s Society to develop the Refresh app. It aims to support people with dementia by linking personalised videos to objects in the home, helping people remember daily routines and even reminding them of cherished memories.
Start a digital training business
It feels like the real barrier for care apps is that the elderly demographic they’re supposed to help doesn’t, for the most part, use apps.
You could help combat this by setting up a business that will teach people how to use advanced technology like smartphones and help them to find their place in a modern world that is becoming increasingly reliant on digital devices.
Telemedicine – video call your GP
Telemedicine – talking to a doctor via a video or telephone call instead of in person – is not exactly new (the first attempts were made in the early 1900s).
However, the COVID-19 pandemic has transformed the perception of telemedicine. It suddenly went from a strange novelty to a necessity, especially for vulnerable patients that could be endangered by a visit to their doctor.
The shift was dramatic, with one GP telling the New York Times that “we’re basically witnessing 10 years of change in one week”. He added “it used to be that 95% of patient contact was face to face, but that has changed completely”.
All of a sudden, GPs were spending lots of their time doing online consultations via video chat to help patients that were either unwilling or unable to come to them.
Initially, this was a bit of an ad hoc solution, with GPs using tools like Zoom to conduct basic video calls with their patients, and then responding accordingly.
Then, clinics moved to using accuRx software, which offered basic video calls and was already familiar to doctors as they previously used it to send text messages to patients.
Video and telephone consultations are a core part of its business model, with patients able to pay to see GPs within a few hours rather than waiting days for an appointment at their local surgery.
Like on-demand medication, this is another trend that looks like it’s going to outlast the pandemic that made it common practice, and could be a big opportunity for new healthtech businesses.
Telemedicine business ideas
While there are definitely similarities, delivering telemedicine effectively requires different skills to the ones traditionally taught to GPs. Those practicing telemedicine have to communicate differently, interact with their patients in new ways, and find a different way to develop the trust that is so crucial in a patient-doctor relationship.
For example, a GP doing a video chat consultation can’t give a nervous patient a reassuring pat on the shoulder – so they need to find an alternative way to calm patients, perhaps by lowering the tone of their voice, speaking more slowly, or even telling a joke.
This is even more important in the case of remote GPs, who will probably never meet their patients in person.
Therefore, with the rise of telemedicine, communications specialists or psychologists could find a great niche in teaching GPs and other medical staff the best way to interact with their patients over video chat.
Telemedicine is still at a relatively early stage of its development, and has only been widely adopted in the last couple of years. This means that it’s far from set in stone how best to go about things, and this is a great opportunity for innovative approaches to online consultations and groundbreaking telemedicine communication apps.
There’s a real argument that the whole process should be reconsidered from the ground up, with an emphasis on how to help patients explain their symptoms and how doctors can best quickly diagnose them and give appropriate advice.
If telemedicine is going to gain widespread acceptance, then we also need to think about how it can help all of society – including people with more complex conditions and those who don’t speak English as a first language.
Both of these are very exciting areas for new businesses.
Fertility tech – new ways to help conception
People are getting pregnant later in life – with official figures showing that the average age of mothers has been steadily increasing since 1974 and stood at 30.7 years in 2019 (the most recent data available). This means they’re also needing more help to conceive, and there’s a huge market opportunity for any tech that helps this process along.
Globally, analysis by Grand View Research found that the total IVF market is expected to be worth approximately £25.6bn by 2028, more than double the 2020 value – and a number of startups are bidding to take advantage of this growth.
Among these is NOW-fertility, which is set to launch in Spring 2022 and bills itself as the “next generation of IVF” – a hybrid approach that’s going to combine in-person treatment with telemedicine to produce a less stressful and more efficient IVF experience.
Luciano Nardo, NOW-fertility’s founder, points out that “assisted conception helps diverse groups of people, including same-sex and trans couples and individuals, single people, post-cancer patients, older women and patients with hereditary conditions or diseases”.
However, “fertility treatment remains emotionally and physically exhausting” and clinics are limited by the number of patients in their local area and the number of patients they can physically accommodate.
Instead, Professor Nardo sees a future where “fertility services, and indeed other healthcare services, will be typified by a digital portal run by experienced physicians, nurses, and counsellors, offering 24/7, personalised and supportive consultancy and care”.
The ultimate goal is for patients to feel in control of the process, and able to access support whenever they need it.
Another key area in fertility tech is male infertility, which is a largely untapped market and one that has huge potential.
Dr Benjamin Tee and Prusothman Raja co-founded twoplus fertility after Tee experienced his own fertility problems, and say that it’s far too often dismissed as a female problem.
In fact, Raja points out that “average sperm count among men has halved in the last 40 years, while couples still struggle to get accessible fertility care” – but relatively little has been done to combat this.
Consequently, he argues that “focussing on solutions that make fertility care more accessible, frequent and affordable will help to unlock tremendous value for couples”.
And twoplus has already started down this road with its first product, the twoplus Sperm Guide, an at-home fertility aid that is designed to help sperm get to the right place during sex.
Fertility tech business ideas
No matter how the assisted conception process changes in the next few years, it’s always going to be a stressful and emotionally draining experience.
Many couples will therefore need specialist support to get through it on a psychological level.
Given that the usage of such services is only expected to increase, there is a real opportunity for counsellors and therapists to specialise in this area and provide expert support and understanding.
With the rise of telemedicine, you should ensure that you’re able to deliver this crucial service in multiple ways, whether that’s in person or via a video chat.
Male fertility education
Men are gradually facing up to the vital role they play in the conception process, and many are now keen to take co-ownership of the reproductive health journey.
However, there’s a knowledge gap here. While female reproductive health has been discussed for decades, its male counterpart has been largely ignored.
Something that tackles the subject from a male perspective, then, could have a big audience – whether that’s a simple book or even a mobile app that guides men through what they should be doing to help their partner conceive.
Healthtech is not just a business idea for the next few years – it’s going to be a hugely important business trend for (at least) the next few decades.
The shift towards an aging population isn’t changing anytime soon, and that means finding new ways to combat health problems is going to surge up the agenda.
We’ve picked out a few key growth areas here but there are loads of others, from menopause tech to high-tech period pants.
Healthtech affects us all, and so it’s hugely fertile ground for the next generation of superstar startups
Big Mistakes to Avoid in Your First Real Estate Development Project
Real estate is a great way to build wealth, but it’s actually more than that: it’s also a way to shape the environment around us. Developers have broad-ranging objectives, from making big profits to helping the environment through sustainable design. Sometimes multiple interests converge—good design and profit are not mutually exclusive.
Although there is great opportunity in real estate development, it is important to keep in mind that real estate development is inherently risky. The rewards can be great, but the possibility of failure is very real and can be financially devastating. This guide will help you avoid costly errors so that your first real estate development deal is a successful one.
Your first real estate development project—common errors to avoid
There are certain areas of real estate development projects that we see repeatedly falling through the cracks, resulting in projects that are less profitable than they could be. As the property owner and developer, you are ultimately responsible for the success of a project, and at the very least you want to ensure you don’t overlook any details that will impact your bottom line.
Due diligence phase: common errors
The due diligence phase of a real estate development project should take place before you close on a property or move forward with a project. Here is a list of some of the things to watch for during this phase. (For a comprehensive list, see the due diligence checklist at Property Metrics here.)
Title: A clean title with no claims or other encumbrances is of great importance. Always check for accuracy and errors, and unknown or missing conditions such as liens or heirs. Easements and other encumbrances or any type of dispute are also important to watch for. Hire a reputable title company and review documents carefully.
Environmental: For large projects, an Environmental Impact Report (EIR) may be required. There are about 20 states that require some form of environmental review. For example, the California Environmental Quality Act (CEQA) requires large projects to perform an EIR; smaller projects may be exempt.
Even if an EIR is not required, larger projects and commercial property buyers often request a Phase I Environmental Assessment to ensure a property is cleared of environmental problems. Smaller residential projects rarely perform this assessment because it is unlikely these properties will have environmental contamination; however, it is always better to be safe than sorry. If you suspect there is some sort of environmental contamination (from a former gas station or dry cleaning facility for example), you should order a report. If there are any problem areas in the Phase I report, a Phase II assessment may be required.
Also note, if you order a report and anything is missed, as the owner of the property you will still be liable for it later. Therefore, be sure to hire a reputable company to do this work.
Survey: If you are building new or adding any footage, it is recommended that you obtain a survey. This will confirm the boundaries of the property and is much more accurate than other forms of identifying boundaries, such as measuring identifying features or relying on a tax assessor’s map. Relying on less accurate information can lead to problems down the road, such as accidentally building too close to a property line.
A survey will also tell you if any utilities are running through the property (you need to be aware of these during construction), if any other entity has rights over your property which might not allow you to build in particular areas, or if you are near a creek or other protected natural feature.
Finally a survey tells you the slope or “contours” of the site, so you can plan for proper drainage and appropriate foundation systems.
Zoning: If you are building new or adding any footage or volume, it is important to verify the zoning requirements. However, just because a zoning calculation says you can divide your property by a number to get the unit count or allowable FAR (floor area ratio), it does not necessarily mean you will have the spatial configuration to do so.
Planning requirements for parking, height limits, setbacks, and open space can impact the density of a project. Sometimes physical limitations define the density of a project more than the actual development standards. If you are not familiar with these requirements, hire a qualified professional to evaluate your site.
Keep in mind that aesthetics are subjective, and any given planning department may have particular biases around architectural massing and style. It is important to understand these leanings before beginning design.
Also, keep in mind that entitlement is inherently risky—potentially the most risky part of the real estate development process. No design professional can guarantee an approval from a city agency. Because codes are often complex and open to the interpretation of city officials, projects can be denied on the basis of an interpretation.
In addition, it is important to keep in mind that the more elements you want to fit on a site (units, office space, parking, etc.), the more complex the design becomes. A bigger project may yield more profit, but there are risks. Making the design work can be challenging, if not impossible, and bigger projects draw more attention and scrutiny from city officials, neighbors, and others who may not want the project, and who will work hard to fight and stop you.
Neighbor issues: Political climate and neighborhood sentiment is always an indeterminate factor. Make sure you understand the risk of extreme resistance. Research a neighborhood before you close on land because you never know how vehemently opposed to your plan anti-growth neighbors can be, which can delay your project by months, or even years, and in some cases derail the project permanently.
Research can be conducted through online searches, newspaper and local magazine research, walking the neighborhood, and even talking to neighbors. A design professional or architect will often be familiar with the climate of a neighborhood, so a simple phone call can provide you with a wealth of information.
Building codes—fire, life safety, and accessibility: During the process of establishing a zoning envelope, the design needs to be cross-referenced with building code requirements. Be sure that any yield study that is being examined from a zoning perspective will also work when considering building code requirements, with particular regard to general building limitations, construction type, fire setbacks, egress requirements, and any ADA (Americans with Disabilities Act) issues. Also, be sure there is adequate fire truck access (where required) and the property meets requirements around fire hydrants.
Construction costs: Without a design, it is difficult to obtain accurate cost estimates, but you can research general opinions regarding cost per foot and information on the state of the construction market. Most design professionals and contractors can give you some sense of construction costs and where the market is headed. Any estimates should be updated throughout the process to ensure the project stays on budget and the pro forma stays in the black.
Real estate market research: It is important to understand how the project will financially perform once it is completed, so gathering information on how much profit you will earn when you sell or lease is paramount. Upon project completion, if you’ve spent more than you have received, you will lose money or possibly go bankrupt. Consulting with a local real estate agent or broker can help you determine how comparable projects have performed.
Pro forma: Based on your research, you will need to calculate and make some assumptions about how your project will perform. Total cost and net profit (or lack thereof) need to be clear to know if the project is worth pursuing.
Construction lending: Early in the process, make sure that your lender is in agreement with your project’s intent. A lender will likely be interested in the project’s cost and value, constructability, and marketability.
Cost and value is important because lenders will want to confirm those figures are in alignment to mitigate their risk. Constructability ensures no unusual or difficult construction issues will prevent the project from being built. Marketability is important for ensuring the project is not so unusual that it cannot be sold, rented, or refinanced.
In addition, the more developed the project is, and if you have permits in hand, the more comfortable the lender will feel giving you money. But if you don’t have your permits, don’t let this keep you from approaching a lender to confirm that at least your initial assumptions are acceptable to the institution. Find out at what point they would be comfortable funding the project.
Design phase: common errors
Design elements should be gone over as part of due diligence, but they come into play during the design process. Some of these will be defined by code and other limitations, but it is important to know what works in a particular market (minimums are usually not adequate). They can be based on experience, research, or personal preferences.
Typically the developer has thought through the vision or “highest and best use” for a site before or during the due diligence process, but a design professional can also help with site selection and determining the best possible use for a given site. When the developer does come with a given use, a design professional should verify all assumptions before beginning work.
The following are some of the design parameters that should be evaluated before beginning work:
Use: Almost always there is a use looking for a site or a site looking for a use. If you are in the former camp, you will need to keep an eye out for properties that are zoned and at a location which suits your intended use, whether it be residential, commercial, retail, or mixed use.
If you have found a site, you will need to know which types of use are allowed and determine whether they match your intended use. For example you may believe a site is best suited for housing because people are moving into the neighborhood. But if that use is not allowed on that site, then you have a problem.
Many municipalities will allow mixed use or a combination of uses for a site.
Construction: Decisions will need to be made around construction, and the sooner they are made, the faster and smoother the project will go. These decisions are contingent on construction costs, as well as other factors, such as project type and program, loan structure, and exit strategy. Changing a decision late in the process can be costly.
Project management: common errors
When executing a real estate development project, a certain amount of general project management is required. This may be performed by the developer or the owner, or will be picked up by the architect, the contractor, or some combination of the two. Items that fall into this category are listed in this section, while aspects that pertain to the management of the permit process are broken out in a separate section.
Consultants: Have an understanding of all the consultants who will be involved in your project. There will be typical consultants, such as architects, engineers, and surveyors, who are part of conventional project design as well as specialty consultants, such as waterproofing and sound engineers, expeditors, and environmental graphic designers, who only get involved with specific projects. Be sure that your architect and consultants carry their own insurance if you plan to carry their contracts. Architects may have umbrella policies that cover their consultants as well.
In addition to becoming familiar with consultants who are necessary for your project, it is also important to be aware of possible issues that could arise as a result of their work. An architect or a structural engineer may not necessarily have the most cost-effective design in mind. If the architect is simply trying to create the most beautiful project he/she has ever designed, and the engineer is simply trying to support the design, there may not be a coordinated effort to minimize cost. For example, a building that would commonly be built out of wood may require expensive steel or concrete shear or cantilevered elements, ultimately rendering the project infeasible.
Project delivery: Keep in mind that with conventional bidding, a contractor may be motivated to deliver a low upfront bid to win the contract and then issue change orders later once the contract is secure. These are typically more expensive than getting a bid upfront, because your job is already in progress and you have little leverage to negotiate at that point. If a contractor is chosen early in the process independent of bidding, they may help “value engineer” (suggest different, less expensive design options) to reduce costs and minimize change orders.
Delivery method—how the contractor executes your project—and contract arrangement will also impact the quality of the project documents produced. There are a variety of delivery methods, with the most common being design-bid-build, design-build, and construction management. For instance, with a design-build contract, some of the design decisions will go to the contractor and not the design professional. This means the contractor will find inexpensive construction methods, but you lose some control over the quality of the construction.
Discuss delivery methods with your design professional to determine which method will work best for you.
Bid coordination: Under conventional design-bid-build, you will likely field multiple bids. Keep in mind that the low bidder is not necessarily the best contractor for the job. The lowest bid may be suspect—beware if it seems artificially low. Ultimately know the contractors who are bidding the job, and understand that quality and cost are often related. There is truth in the saying that you get what you pay for.
Utilities: Applications for utilities (gas, power, water, and sewer) often slip through the cracks. Make sure you are managing this area yourself, or that it is being actively handled by someone on the project.
Permit coordination: common errors
It is typically not the responsibility of the architect to handle certain aspects of the permitting process during a real estate development project. When reviewing a proposal from an architect, be sure to ask if the following is included or specifically excluded from their scope of work.
Coordination with city agencies: Bureaucracy can be slow. As the project owner you are carrying all of the risk; delays to the schedule will impact you greatly. Managing city agencies is an art, and requires the right relationships and the right amount of pressure.
An architect can leverage their relationships and tell you whom to speak to, but an architect’s voice will not be heard in the same way as an owner’s. Just like subconsultants and your contractor, in many ways the city also works for you. It is best if you are the one reminding city officials that the speed at which they complete their work and whether they approve or deny the project have a material impact on you and your livelihood.
Usually the architect will handle your zoning approvals and permit, and your building department approvals and permit. Other permits may be your responsibility or the responsibility of the contractor or other consultants. Be sure to review your contract for specific inclusion of all services if you expect them to be performed by the architect or others.
Application: There are a number of documents that will need to be prepared for your application submission—drawings, project specifications, and government forms—that need to be turned into the city for review. Your design team will prepare most of the materials for you. Ask your design professional which items you will be responsible for and what they will take care of. Be sure to obtain an exhaustive list of the required items from the agency you intend to submit. These requirements should be understood far in advance of the intended submittal date. Be sure that your consultants scope includes everything on the list you have obtained from the city agency.
Approval letter: Review your planning and zoning approval letter carefully. Check that the details are correct, and in particular, look for any unusual or erroneous conditions of approval. As these letters are often boilerplate text, errors can be carelessly included and be potentially demanding enough to have serious cost implications.
Finding success in your real estate development project
Using this information will hopefully help you have a more successful real estate development project. Please keep in mind that this is not meant to be a comprehensive or exhaustive list, but it is a guide to some of the commonly missed elements of a real estate development project. Good luck!
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