Convo With Nick Parisi, CEO, Buildable
Build a dream home without a nervous breakdown
During my renovation, I lost contact with former colleagues like Nick. I reconnected with him to learn about Buildable, a custom home company he started in San Diego. Building a home in California is different than NY or other states but there are similar aspects i.e regulations, design process or permits that one needs to understand otherwise it can turn into time, money and stress.
I’ll be doing occasional interviews which provide insights and pointers on construction. Interviews are not paid or promotional.
You had a long and stellar career in Advertising. Why did you leave?
Traditional advertising has big budgets and big talent with outsize egos, which can be annoying. After a stint at one of the Madison Ave. agencies, I went to R/GA, which was more fulfilling as we were solving true business problems with some really smart folks. In the last decade, technology has upended every industry and startups have begun to innovate at a much faster pace so I decided take a job as the CMO of a startup in San Diego.
Why did you choose San Diego?
I grew up in Manhattan and lived for ten years in Brooklyn. I resided in San Diego after college and I would always think about how I could return. The impact of weather on your life cannot be overstated. Here, the temperature averages around 70°F, which means you’re not completely dependent on the weather to be able to plan your days. I’m an hour away from snow and skiing and 20 minutes from the beach. My son is four and a half years old now. We visit trampoline parks, water parks, and the beach without having to plan, rent a Zipcar, or brave multiple hours of travel. An added plus is that my wife has a lot of family here. I’ll sell anyone the San Diego lifestyle because I’m never going back!
What happened next that led you to create Buildable?
We moved to San Diego, and needed a place to live. I started looking at listings when my wife’s aunt Michelle, who is a general contractor, said, "I’ll help you build a home; you just pay the subcontractors." I said to myself, "This is a once-in-a-lifetime opportunity, and we trust and love our family, so let's do it."
I had a pretty good idea of the kind of home I wanted but land—that’s totally different. Most people don’t realize there are many different kinds of land (large estate lots of 5+ acres, 8000 SF in-fill lots, view lots and secluded lots... ), and it takes time to figure out what’s right for you.
I kept finding what I thought were great lots, and then...No! No! No!
Whenever I found land that I liked, I would send my aunt a text saying, "This is it." She would respond with, "No! No! No!" and then explain why. I did this a bunch of times before suggesting we make a checklist to identify potential issues, so I didn’t have to waste her time. It was so helpful that sometimes I didn’t even need to get out of the car. Finally, I found land that seemed to check all the boxes and was priced a $100,000 below market value. I made an offer which was accepted. A key strategy at Buildable is to get in on day 1. There are deals out there if you’re always looking and move quickly.
Next, my aunt did due diligence to ensure that the land was suitable.
"Today we had a meeting with planning and zoning, then tomorrow is the big one with the fire folks." I’m like, "Fire? The fire department? What? Do you call 911 and ask for a meeting?" "No", she said.
She spoke with every relevant city agency: health, planning, fire, utilities, etc. City departments can contradict one another; one can say there are no problems and another can call out a six-figure improvement. I geeked out on this part and quickly discovered that the process would be difficult, or nearly impossible to navigate, without an experienced guide.
After the lot was cleared, we started the design process.
I had PTSD from living in New York and Los Angeles townhouses that were 20 feet wide or less. Space and open layouts were essential. It was important that my son spend time in the family area, so I made his bedroom small. I knew I didn't want a dining room, and I definitely wanted a thermostatic control in my shower.
I pretty much had a vision which I drew out. Then I reached out to an ex-colleague from R/GA who created a 3d model (thanks, Rich Yeung!). (See Repository on whether you need an architect for a design).
During the entire process, my aunt was guiding me through the cost implications of decisions. "How big do you want this house to be? Right now it’s about $400–$500 per square foot." For example, I wanted vessel sinks. The labor price to install a vessel sink is almost double that of an undermount, and it affects the cabinetry you can choose from. A one-piece toilet (with an integrated tank and bowl) looks more modern, so most consumers prefer it. But the labor cost of the former is several thousand dollars compared to a two-piece which costs several hundred dollars because the installation is more complex.
Then in 2020, during the middle of COVID and my build, I was laid off. I said to myself, “Now’s the time to start a business, but what business?”
Is that when the idea for Buildable came about?
Yes, it is. First, I have a deep passion for real estate investing. Second, designing my home and seeing it come to life was SO FUN! Thirdly, inventory in San Diego was down 60%.
“If there’s no inventory, what are people going to do… Build!”
The construction industry is extremely fragmented and archaic. Some of the best people don't have websites but have "aol.com" email addresses which makes them impossible to find. As a consumer, you also have no idea who you can trust because there aren’t sites like Yelp for custom home building. There was a clear gap in the market and no one to fill it.
“What if everyone had my aunt with them… to guide them to the best result and ensure they didn’t make any mistakes?”
I remember calling my aunt to have lunch and discussing the idea. Together, we shaped the offering, figured out the business model, and defined our process.
How does your process work and what makes you unique?
In a nutshell, we help you find the right land, design your home, and build it. Going it alone is very stressful; there are a lot of decisions, such as what steps to take or knowing what the costs should be, etc. Architects, engineers, and contractors are not accountable for costs and have no fiduciary responsibility to clients. We provide cost and process transparency, help you avoid common mistakes, and guide you through all the steps. In the end, we hope that instead of fear and stress, you have an enjoyable experience.
We’re unique because no one else has really brought the process together in a simple way and or provides custom solutions for a variety of client needs. People ask me if anyone is doing what we do, and the answer is “not really”.
Creating a space that is unique for each client is what drives us. For example, we have a client who suffers from a neurological condition so the home needs to be accessible for caregivers and enable the caregiver to be there without interfering with the client's day-to-day. Sharp edges on countertops are prohibited, and material transitions must be carefully planned to prevent seizures. To determine the ideal design, we consult with the client and conduct our own research.
You mentioned that people avoid custom homes because they think it’s going to be a major hassle.
I conducted more than 50 interviews as part of my pre-founding research. 80% of home buyers dreamed about building their ideal home, but 50% immediately decided not to pursue their aspirations due to perceived obstacles:
1. Unclear costs: There is so much complexity and variation in each build, that typically no one can predict what it will cost.
2. Industry challenges: Construction is a complex industry that involves a lot of decisions, a lot of players, and a lot of trust and without experience it can be overwhelming and challenging.
3. Stressful and time-consuming process: For individuals who have busy jobs and families, finding extra time to oversee all aspects of construction can be difficult.
4. Risk: If one doesn't have a good understanding of the process and the necessary experience, errors can be very expensive.
Having a guide with you to do it the right way can eliminate these issues.
What kinds of issues have you seen clients go through?
Some clients have purchased land and found out it’s not buildable.
A client of ours had paid over $700,000 for a lot. Their real estate attorney had verified that an access easement existed (see Repository). We discovered that the easement was for wagon access in the 1800s! It was only 4’ (1.2m) wide vs. the 16 feet needed for fire truck access. Of course, you can negotiate an easement with the adjacent owners or widen the road but they may not want to or could charge you an exorbitant amount.
Architects have no idea how much things cost; that’s not their job.
We had a prospective client who had spent $200,000 on architectural plans and had $1.3 million to build it. By the time the designs were completed and permits issued, builders were bidding in the $4 million-plus range. He was forced to redo his plans and resubmit for new permits in order to execute but later scrapped the project altogether. You feel for people when these things happen because these issues could have been caught earlier.
How does Buildable solve for these issues?
A lot might need considerable improvements, and that’s a cost that needs to be factored in. We are builders, and our real estate agent is a land expert so we work back from your all-in budget to determine if a lot makes sense for you or not.
Potential costs can include grading the home (see Repository), roads and driveways to the property, running utilities like water and electricity, retaining walls, etc. California also has strict regulations for protected wildlife and flora. For example, coastal sage is an endangered plant species, so any land with coastal sage is considered mitigation land (see Repository). These are the kinds of things we help navigate.
Have you discovered any bodies or gold coins during excavation?
One thing we encounter is snakes! Not like Indiana Jones, but if you disturb the land, what’s living will come out to greet you. It’s not unheard of to find relics like arrowheads as well. In some areas, you may be required to complete an archeology report to determine if there’s any culturally significant activity on the land. This is usually an early thing we look out for, as you may even require an archeologist which can get pricey!
One of the biggest issues with construction are schedule and costs. How do you keep projects on track?
There’s a lot of emotion and finality wrapped up in a home's construction. The projects that have taken longer than expected were the result of multiple rounds of client feedback or delays in getting that feedback.
The biggest challenge is helping clients understand that changes will result in increased costs. If you make a home bigger, there’s a cost to it. People lose track of that correlation. We’ve also had designers deliver layouts that were 50% larger than the original scope and clients didn’t realize the impact. So, now, after each round of design, we report on the square footage with an updated cost estimate. Keeping people on track to honor both their vision and their budget is a critical role we play.
We prefer not to have change orders because they slow the process down. A building can be completed in 10–12 months, but if you make a change that requires a plan alteration or affects subcontractor scheduling, you can be in a cycle to get on calendars or new approvals which can throw the schedule off track. So we spend a considerable amount of time in the design phase to reduce the chances of changes later.
What are some common blunders that clients make?
We’re different from traditional builders who are usually hired after the permits which means we can proactively solve for potential issues down the line. One of our clients had a situation where if his house had been moved 5 feet over, he would have saved $15,000 by not having to grade the land or create a retaining wall. However, he only found out after the permits were filed, and going back would have been more expensive. We try to help our clients understand these things early in the process so they can mitigate problems.
Can you name some crazy things customers have asked for?
I love crazy things, and we really enjoy helping people solve unusual challenges. I wouldn’t say anything we’ve done is “crazy,” but the ability to create something unique is what brings value to a custom home. We are working with a lovely family with six kids who want dormitory-style bedrooms for them. This is a home that is designed for their lifestyle, and it’s not something you can buy off the shelf.
One of our clients has a CPAP (continuous positive airway pressure) machine that is used to treat sleep apnea. The client doesn’t want to walk to the kitchen to get water for the humidifier, so we’re building a filtered inline system that uses a marine hose so they can fill up the CPAP without walking 50 feet every couple of nights. Features like this are not standard, but they are uniquely personal and help make life easier.
What’s the most expensive fitting you've put in?
We have a $15k shower system with a thermostatic valve that will bring your shower to the desired temperature then pause the water so you can step in. There are six showerheads, and all can be controlled by Alexa. It’s super cool!
The prefab market has been heating up in the last few years. How does Buildable compare to prefab?
The challenge with prefab is that the price on the website doesn’t include any of the engineering or site improvements that are necessary, along with appliances, etc. People often think that they are getting a deal with a prefab, but the truth is that it can be more expensive than a stick-build.
Some prefab units are classified as mobile homes, which creates a stigma that reduces their resale value. I get why people choose prefab, tiny homes, container homes, etc. This is usually driven by a desire to beat the market. However, it’s shortsighted and can be a huge mistake.
What are some of the changes you've noticed in San Diego's housing market?
San Diego is expensive but undervalued compared to New York or San Francisco. I own a 1600 sq ft (150 sq m) house in Brooklyn, which is across from a cemetery and worth 1.8 million. In San Diego, depending on the location, the same amount of money would buy me a luxury home with double or triple the square footage on an acre.
Most of the houses in San Diego are old ranch homes. There is not much new construction other than large housing developments where the homes are cookie-cutter, cheaply made, with odd layouts and no real character. There's a dire need for new inventory. In recent years, we've also seen an influx of San Franciscans and New Yorkers injecting cash. Apple recently purchased a campus here. Intuit, Illumina, and ServiceNow are all bringing in highly paid workers. Custom builds have demand and about 30% of my clients are from San Francisco, Chicago, Boston, and Texas.
On the other side of the country, we hear a lot about floods, earthquakes, and fires. What’s your perspective on these?
Floodplains are, for the most part, mapped out, but fire can be an issue. Building codes have changed and have made homes way more fire-resistant. You’re now required to have sprinkler systems and use non-combustible materials on the exterior. There have been fires in San Diego, but they span decades. I don’t think it's something to worry about too much. For earthquakes, there are a number of building codes that drive engineering requirements. Small earthquakes are common, but they are so light that you usually just ask yourself, "Was that an earthquake?" laugh, and go about your business.
How many home builds do you currently have underway?
We have a dozen active clients and projects across the area, including in LA, Julian, Vegas, etc. Some have started construction; some are in the permit stage, while others are in the due diligence phase.
Your co-founder, Michelle Pettycord is a woman and being a woman in construction is tough. What’s been your experience?
Michelle is an A and B-licensed general contractor, an SME (subject matter expert) for the California Contractors State License Board and has built over 1,000 homes in her career. The license means she can handle engineering work like building a bridge or road. Even though she is extremely accomplished, she still has to deal with sexism every day.
“I’ve witnessed it all. A trade or inspector will call her “hon” or question her if she’s the GC. It’s unreal that happens in this day.”
Michelle has a thick skin and will quickly put people in their place. When I hear something condescending while she and I are in the field, we always look at each other and smile because the person has no idea who they are dealing with—and they’ll soon find out!
Where do you see the housing market headed?
In San Diego, inventory is down 23% YoY, and the median sales price is up 5.1% YoY. However, zooming back 3 or 5 years, we’re looking at 30%–100% appreciation in some places and 60% inventory. We’ve seen some rapid growth in San Diego, but I would argue that the market is still undervalued.
I see the San Diego market as one that will continue to get stronger, given its weather, amenities, and infrastructure. The lack of inventory won't change because we just aren’t building enough to satisfy demand. It’s a great investment environment, but we, as San Diegans, have to ask at what cost? Are we going to have traffic issues like LA? Is this place going to retain its beauty when it bursts at the seams? I’m not Miss Cleo, so time will tell.
How do feel about where you are right now?
I love my work. Driving around, looking at land, and being able to help clients create their vision is satisfying. I have to work as hard as I ever have, but there’s personal pride in creating an amazing business that helps people. Of course, there is also a great deal of responsibility in the sense that now everything is on me and my partner. When I make a mistake, I don’t have to fear "a boss," but I do have to pay the price and make sure I don’t make that mistake again. That’s the way it should be. There’s also pride in improving the process or the business model and having positive results. I couldn’t ask for anything more.
Related Content
The Three Rings of Hell: A Money Pit, Unending Trauma, and a Decade of Debris –Renovating a Townhouse is Not the Dream You’d Imagine.
Thank you for reading.
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Queen’s Repository
Get in touch with Buildable: Nick can be reached at nick@simplybuildable.com or at simplybuildable.com.
Resources & Information
Do you need an architect to design a home?
Not necessarily, there are different design options available:
Draftsman: The most cost-effective partner with less surprise and delight. You hand-feed your layouts and desires, and they execute them.
Architect: Very costly, experienced in bringing a vision to life based on your inputs. Potential for surprise and delight, but not always guaranteed, leaving some people frustrated.
Architectural designers: In between #1 & #2, they can be very talented, not credentialed as an architect - but that’s not necessary.
What is an easement?
An easement typically allows access to or use of land that you may not own. Power lines that traverse a property will have an easement, and water lines from your public utility will have an easement. For land-locked properties, having the right to construct a road for access to the property can make or break a lot's value.
Link: Sample emergency access easement form.
What is grading?
The simplified answer is it is the process of leveling the ground around a house to ensure that water drains away from the foundation. It also includes compacting the soil to enable a solid foundation.
What is land mitigation?
When builders apply for permits, they need to submit a form called the Environmental Impact Report, which documents the impact of construction such as noise, traffic, and the effect on endangered species of plants, animals, etc. If the report identifies that there could be a negative impact from construction then the builder is required to offset or mitigate the impact. This can be done in several ways including purchasing other vacant land to offset the disturbance.
Link: Mitigation information on ca.gov.
What are the different kinds of contractor licenses in California?
There are different types of contractor licenses set by the California Contractors State License Board (CSLB). Licensing information can be found at cslb.ca.gov
A: General Engineering Contracting
General engineering contractors are those whose business is primarily in connection with fixed works requiring specialized engineering knowledge and skill.
B: General Building
A general building contractor’s primary business relates to any structure built, being built, or to be built for the support, shelter, and enclosure of people, animals, chattels, or movable property and requires the use of at least two unrelated building trades or crafts.
B-2: Residential Remodeling
A residential remodeling contractor works in connection with any project to make improvements to, on, or in an existing residential wood-frame structure, and the project requires the use of three unrelated building trades or crafts for a single contract.
Class C: Specialty Contractors
A specialty contractor performs construction work requiring special skills. This type of contractor’s principal contracting business involves the use of specialized building trades or crafts.