He Cut Architectural Plan Timelines From 6 Months to 3 Weeks

Lou Guadagno (00:00)
Absolutely. So I started as a general contractor that also bought properties and was doing my own developments. The hardest part we found for both the general contractor and ourselves was the architecture. The time it took to get the plans done while you’re paying a mortgage or while you’re paying a rent on a leased space or your customer is, and the cost. A lot of these things were cost prohibitive. So after years of doing this and struggling and fighting, because without permits, there’s nothing you can do.

And without getting plans, you can’t get permits. I pivoted my whole career into fixing that problem.

Freddie Steen (02:09)
Hey everyone. Welcome to the Investor Fuel Podcast put on by Real Estate Pros. I’m your host, Freddie. And today I am joined by someone I’ve been looking forward to chatting with. It’s Lou who’s been making serious moves with his company, InstaArch, in the real estate space, particularly in finding the gap between the cost of generating.

Architectural plans and the speed by which this can happen now with technology. Lou, I’m glad to have you here. And I think our listeners are really going to take something away from how you’re approaching this. So let’s dive in. So first off, for people who may not be familiar with your world, give us the short version. What’s your main focus these days? And what markets are you operating in?

Lou Guadagno (03:00)
Okay. So our main focus is architecture and engineering. Just the plans you need, none of the fluff. We focus in real estate. We focus working with contractors. We focus in B2B, commercial ground ups, renovations, tenant fit outs. And yeah, that’s pretty much it. Or anything really. We we we’re open to any type of architecture, but those are our main focuses.

Freddie Steen (03:22)
And what markets are you operating in?

Lou Guadagno (03:23)
all fifty states actually. We are running projects everywhere in the country.

Freddie Steen (03:27)
I love it. Love it. What caught my attention, Lou, about you was the way that you’ve been able to scale a profitable company that really started with something that resonates with our real estate pro audience, and that’s that hard sweat equity. Can you just tell us a little bit on the vision cast and your journey of how you approached your problem and what brought you here by doing it the hard way?

Lou Guadagno (03:53)
Absolutely. So I started as a general contractor that also bought properties and was doing my own developments. The hardest part we found for both the general contractor and ourselves was the architecture. The time it took to get the plans done while you’re paying a mortgage or while you’re paying a rent on a leased space or your customer is, and the cost. A lot of these things were cost prohibitive. So after years of doing this and struggling and fighting, because without permits, there’s nothing you can do.

And without getting plans, you can’t get permits. I pivoted my whole career into fixing that problem.

And that’s what bore InstaArch and how we do things, because we do fast drawings that get approved and we give it at an affordable price. And the other thing that is way industry different for us, that was another big pinch point for us, was is we actually see the plans through at a flat rate price till they’re approved, meaning our people submit.

Deal with the building departments and get them approved. Because just a set of plans with a stamp means nothing if the building department doesn’t approve it. So those were the pinch points that I had and what saw as failure points in my previous life that brought me here to create this network that has scaled so big because of just our system, how we do it.

Freddie Steen (06:03)
Lou, give our audience just an example of how you can shorten the process of receiving architectural plans from six months down to three weeks. Is that true?

Lou Guadagno (06:15)
That’s absolutely true. And the truth of the matter is this. Most conventional firms have four or five people working for them. And when you speak to them, they’re telling you they’ll get their job started right away, but they have a six month line ahead of you. So it’s not that it takes them all this time. It’s that they put you in a queue that you don’t know about. And I found this out. That’s what that is. We take on the work that we can handle. And we work seven days a week.

We have people all over the country. Since we spread ourselves across all 50 states, we have people in all 50 states. 98% of our people work remote. Why? Offices cost money, printers cost money. All the things, the overhead that the customer pays, we eliminated. we created our own softwares that help us. You know, we sat down and we figured out the algorithms that make sense to speed things up. So not only are we using very intelligent people, we’re using very intelligent softwares that help speed it along.

And we do a collaborative effort. So there might be seven people working on your project because there’s a thing called drawer fatigue. And drawer fatigue is serious and it makes people lose out on a lot of items that they could have caught in the first place. And so we send it through this rigorous internal audit to make sure that what we’re delivering gets approved quickly. In fact, just one other thing that we actually created off of this

This whole setup that we do is a a website that now is available to anyone. It’s called instapreview.co, which is an automated review, not an AI. It uses a little bit of AI, about 10%, but but 90% of it is is we created a network inside our system of all the building codes, of all the jurisdictions, and of all the errors that we have found. And that scan.

Can scan people’s blueprints to see what the building departments may catch. It’s not a catch-all, it’s not a guarantee, but it catches it. And we use it ourselves and now we share it with the world because in tests, in field tests, with over a thousand sets of plans, we sent the plans in for a review with the with the building department, got the comments back, and then we ran it through our system independently, not sharing those comments. 98% of the time, our system came back with more suggestions.

than the reviewer did, but caught all of the reviewer suggestions in about fifty different markets. So stuff like that is why we are who we are.

Freddie Steen (08:50)
I love it. I mean, and and that is what what caught my attention about you, Lou, how you’ve been able to scale this managing multiple markets while still keeping margin strong. I mean, that’s it’s not easy, especially in this climate. what’s been the key to keeping that machine running smoothly?

Lou Guadagno (09:09)
The key is the customer and the company must align. I still take, at least, I mean, it’s hard for me to take all of the calls, but I still take 60% of the calls. When I talk to customers or my salespeople talk to customers, the first thing we do is do I fit for you? Do you fit for me? Because if we’re a good fit, the system works. It’s a the we have created a streamlined system.

While keeping the customer service of a small business and combine them, which is hard. But how we figured it out is we are not for everyone, but for who we are, our ecosystem helps everyone that we’re with. So it really just comes down to making sure that you the our company and our customers are aligned, and then we know that the process can work.

Freddie Steen (10:31)
Lou, I think you tapped on something that every operator that’s listening right now is rattling their brains about on how to keep the progress of keeping the human in the loop, particularly with a lot of automation. What are your cues as an operator of when you need to be the human in the loop or someone like Lou needs to be a human in the loop? What are some of the keys our Real Estate Pros can look out for?

Lou Guadagno (10:58)
I mean, the biggest key to look out for is the reaction in emails or phone calls or text or or feedback from your staff of the customer and and what their initial reactions in how they’re reacting to you, the the micro expressions, the the subtle comments, catching in on those and honing in on what does that mean is really what we do, and we collect a lot of data and information.

To figure that out. And we have team meetings to understand and teach and train, like, you know, how that incorporates to growth. And the biggest thing that people should know is not all customers are good customers. And sometimes it’s not worth it, especially in real estate. I spent many, many years renovating, owning and renovating six and eight story buildings in New York City, upper upper Manhattan. And I’ve dealt with hundreds of tenants.

And I’ve dealt with hundreds of operators who have, you know, you want to fill up your space, you want to fill up your space. But if you don’t take the time to make sure that you have the right people filling your space, you can have a much bigger headache. But people not paying rent, people coming up. I’ve had, I’ve had to help an operator try to get someone out and they stopped paying rent for six months because there was a drip of paint on the peephole. And they read the code and then they took them to court and they.

Literally they lost. And I was explaining to them the same process that, you know, you really have to pay attention to what you’re doing. And yes, it hurts to sometimes have empty units, but it’s better to have the right people in those units when you get them than just filling your units. And it’s kind of the same for us.

Freddie Steen (12:39)
Luna, every operator I know has a moment where things got real. Maybe a deal that went sideways or a time they had to pivot fast. do you mind sharing one of those moments for you?

Lou Guadagno (12:51)
Yes, definitely. So when I was doing general construction and I had a fifty percent stake in a property that was, you know, 40 units, and we were trying to get it absolutely ready. And we were given the most impossible task of trying to meet investor demand in V in meet building department demand.

And keeping a budget that was just depleted completely, because the thing about most cities are they are not always business friendly. So they want what they want and they want to see an older building rehabbed and they’re not taking into account like the ROI of our investment. So in that one particular building, I had to pivot completely and go from turning that building into an apartment units that it was.

Into commercial loft space. And it was a very creative way of doing it. And it worked out really well and saved us probably a million dollars. But it was just out the box thinking that said just because this is a residential building doesn’t mean it has to be. And I think that the best thing I could tell everyone is just don’t assume what you see is what it is. There’s always a possibility. Always ask questions.

Always ask your architect questions, always ask your engineer questions, always ask the building department questions, the inspector questions. You know what? No one should, no one will ever fault you for asking a question because anything could be possible. I never thought we could turn a full residential building into a mixed use, somewhat industrial use that created a much easier space to rent and lease that made that building go from something that was going to be absolutely not profitable to 100% profitable when I was done.

Freddie Steen (15:24)
Yeah, that kind of conversion, that’s the kind of stuff people don’t talk about enough, the pivot. And honestly, it’s what separates the folks that just dabble from the ones who stay in the game long term like you. Lou, let me ask you this. What are you most focused on solving or scaling next? What’s the next real goal for you?

Lou Guadagno (15:44)
The next real goal for me is to really push the architecture industry to follow the standards we’re creating. Fet rid of the cloak and dagger, get rid of the it takes forever. Not just, you know, we pivot a market because of what we do, but I want the whole industry as a whole to start doing that. Now, again, we don’t do the huge, huge jobs because that’s not our our network of people. You know, 10, 20 stories is about where we cap it off and something as small as a thousand square foot.

Is is is retail fit out is kind of where we cap it off, or we do some residential. But that market is totally forgotten because everyone wants to build the Empire State Building and as an architect, they want to do that and they want to forget about everyone else. I want to create the ecosystem that brings the contractor, the architect, the engineer, and the end user together to make this work quickly and efficiently. And then eventually we’re working on different things to tie in the building departments.

So everyone can be in alliance because that’s the other thing. The building department’s a big every local building department is a big help or hurt to every project. And if we can align all of everyone together and understand that everyone’s working towards a common goal and the operator, the the investor, the the guest today who are operating and paying their taxes because they’re making a profit and it’s working.

benefits that same building department and the city and the town. You know, it’s not just about building department fees and violation fees. Like you they need the recurring tax money, the school dollar money and stuff. So so it’s in their best interest to make sure that everyone is able to operate and make a profit, not just pill for the money from the real estate investor from the beginning and then just make it his problem. So that is where we’re working towards with this ecosystem we’re trying to create.

Freddie Steen (17:37)
Lou, you touched on something there that I just want to unpack. Can you tell us two or three ways in which building departments can be helpful to our Real Estate Pros?

Lou Guadagno (17:47)
Definitely. Okay. The first thing they can do is understand that if you have an old building or something that quote unquote is grandfathered in that they’re trying to fade away from, understand that that not everything’s going to be perfectly capable of adapting and it’s not financially worth knocking these buildings down because they’re just not big enough or they’re not big enough or they’re not profitable enough to do that. That they can

Understand from an engineer and architecting architectural point that if the engineer and architect comes up with a creative way, though the building code, quote unquote, may not match exactly. Because keep in mind, stepping back one second, building code is a rule. That rule is then interpreted by a person. That’s why submitting two the same blueprints to two different people in the same building department will yield you two different sets of comments because the rules are.

Are are general. They they’re they don’t go down to the linear, minute fact of everything that could possibly happen. So by getting everyone in alignment and understanding that there’s many different ways to get to the end result, that is one way that can help operators who rehab buildings have a better chance. And that’s something we go to bat for a lot for our customers. That’s why we give them a flat rate and we do it, you know, and say, hey, we’ll get it approved for you. We go to the building department.

Because the building department, a lot of them are good. Some of them are difficult, but they definitely will bully someone that doesn’t know. And when you send the professional in there that does know and does it every day, it’s usually a different conversation. So that is one major way. another way is that the building departments come across and the inspectors especially come across sometimes a little difficult or a little just very arrogant. And what we do and what we suggest is.

Shower them with love and kindness. Don’t take it personally. Feed into their ego and ask the questions. So, biggest question and the biggest thing that my clients say is I don’t have the plans 100% there, but we’re trying to figure it out, but it’s taking a lot of time. My answer let’s get the plans 90% of the way there. Let’s submit them and let’s get them approved.

Because the other thing is, keeping in mind, you have a plan reviewer, you have two gates: a plan reviewer and you have a building inspector. The plan reviewer reviews the plans, and he’s the one that says, Hey, here’s your permit. A lot of the time you get your permit, you build to the plans we go, we give, and the plan inspector, who hates the plan reviewer or whatever their case is personally, comes in, and this happens a lot and says, I’m not accepting that. I want it done differently.

And you’ll say, Well, this was approved. And they’ll say, Well, I’m not accepting it. You have to change it. So it puts the end user, the contract, everyone in like a little bit of a turmoil, because like, wait, this was approved. What’s going on here? So that’s when you go to them and just say, Hey, how would you do this? Or ask the inspector to come to do a preliminary, even if they’re rude about it, they’ll be happy that they came out there. They that’s a kind of a farce. They usually just try to be hard, exterior, but asking them how to do it.

How will this be more beneficial? Really will save time, effort. And also going circling back a little bit is why I say you get the plans 90% of the way there, then what we do is we get the inspector to come and look at some stuff. We ask them, hey, we want to do this, this, and this. Is that okay? Then we resubmit them with the changes. And why I say that is when you are submitting blueprints originally, it takes a lot longer than when you’re submitting for a change for a quick augmentation where they’re just looking at one spot.

So I would think that would be the what I would share with everyone.

Freddie Steen (21:41)
Lou, that depth of knowledge, that’s big. I mean, especially when you’ve already got a foothold with InstaArch and their model of transparency. I mean, the next move can either compound things or create chaos depending on how you play it. Now, I know a lot of people listening are either earlier in their journey or looking to level up, like you. And I think they benefit from hearing this.

When it comes to building relationships and growing your network, what’s made the biggest difference for you?

Lou Guadagno (22:14)
Conversation, talking, answering the phone. It’s not a nine to five. When you’re when you’re an owner operator in a business or real estate, it is not, you know, you know, eight to four, nine to five, and you shut it off. Transparency, communication, that’s it. My whole business and my whole network grew because I still answer the phone more than 50% of the time myself. And and it’s hard to answer all of the calls. I can’t. But

That is the key. Communication. Listen, we’re human and humans don’t like to tell people bad news. I tell people bad news all the time. Why? Because it’s the truth. And you know what? It’s better to hear the truth than to delay an answer or not answer or not respond. Because people will feel better to do we work with you, feel better about the result to know what’s going on. So transparency, truth, that’s it.

Freddie Steen (23:10)
Lou, with that transparency, can you give our audience just one nugget of a common pain of why a new client comes to your door at InstaArch? What is that common pain that you’ve been seeing? Is there a trend?

Lou Guadagno (23:26)
There is a trend. There’s a lot of people out there that are drafters. Now let the let me explain quickly. You have a drafter and you have a licensed professional, an architect, an engineer. They work hand in hand. But the market is flooded now with drafters who can draw beautifully, but they cannot stamp, they cannot seal, which means those plans could look as beautiful as as as you want them to. They’re useless.

Now there is rules to architecture and engineering, meaning if you just handed me a set of drawings that someone else did, I can’t stamp them. There’s copyright laws, there’s a lot of different things that go on internally that that part of the industry we all respect. So you hand me those drawings. Now I have to redraw them, recharge you, stamp and seal, and submit them. So I’ve noticed a lot of customers are coming to us with a complete set of plans, crying that they have no more money because they spent all this money, the person drew them for them.

Then basically ghosted them because it came to the point of stamping them and they don’t have the ability to. I will tell you this. If it sounds too good to be true, it is. I a lot of people say that about us, and I prove it with us, but our prices are what work for us. But if someone’s telling you you a full set of stamp plans are coming for one and two thousand dollars, even for something small.

Probably there’s something more that you have to look into. And a lot of people just go with it at face value. They don’t understand, they don’t know, and they find out the hard way. And we had a lot, like maybe fifty calls a week about that.

Freddie Steen (24:54)
Yeah. I mean, Lou, you can’t fake that. I mean, those type of real world examples breed word of mouth advertising of which none of us can pay for that. Relationships are everything in this space. All right, Lou, before we wrap, if someone wanted to reach out, connect with you, maybe collaborate or learn more about what you’re doing at InstaArch, what’s the best way for them to reach you?

Lou Guadagno (25:19)
Well, they can reach me by email or phone. I’ll share my phone number, 605-305-0754. 98% of the time comes direct to me by our website, instaarch.com, instaarch.com. or email me, [email protected].

Freddie Steen (25:39)
Perfect. Well listen, I appreciate your time, your story, and your perspective, Lou. We need more people in the space who are doing it the right way. Thanks again for being here, Lou.

Lou Guadagno (25:50)
Thank you for having me. It was great.

Freddie Steen (25:52)
And for those of you tuning in, if you got value from this, make sure you’re subscribed. We’ve got more conversations coming with operators just like Lou and InstaArch, who are out there building real businesses. We’ll see you on the next episode.