Karina Mejia, joins our Storii Time hosts, Saad and Mike, to chat about getting started in new development real estate, what makes these projects unique, and how having the right agent can make all the difference.
Saad: Oh man, I was nervous for a second because the last couple of weeks, Karina, we’ve had issues with IG Live. But I’m excited that you’re on today. Have you met Mike before?
Karina: No, not in person. Have we? We meet a lot of people.
Mike: Nice to meet you digitally. Digitally, the next step before in-person.
Saad: Yes, yes, yes. Well, Karina, thank you for joining. Obviously, as you know, Mike and I, we run Tori together. Storii Time is our weekly IG live. Excited to have you on today to kind of talk about your journey and the developer ecosystem that you’ve obviously worked with for quite some time now.
Saad: But before we kind of get into some questions, tell us a little bit about your journey. Obviously, you work with a lot of developers now, but. I’m guessing it didn’t start off that way. like, what’s your journey been like and, and how’d get here?
Karina: Yeah, of course. Can you guys hear me well?
Saad: Yeah.
Karina: Okay, cool.
Mike: Terrific.
Karina: Cool. So I feel, and I’ve said this before, I feel like my journey with developers started primarily, with my brokerage, evil real estate group. When I was a new agent, I got introduced to developers that I don’t think I would have had the opportunity to meet so early on, and basically it was because they had this structure where they, would bring in developers through their sphere and then they would allow agents in the office to pitch that developer and then that developer would choose who to work with.
Karina: But so very early on I’m talking about like, as soon as I went full-time, I was what, 22? I had the opportunity to work with some developers, and I executed really well on those projects. I worked on building up my branding since then and slowly but surely I kept doing it over and over again. Now, I clearly have like a brand that resonates with developers.
Saad: How long have you been doing this?
Karina: Five years full-time.
Saad: So this is kind of something Mike and I have talked about a lot… This doesn’t happen overnight people. You’re an agent that’s listening right now, like Karina is an example, Mike and I have been doing this for a little bit. This takes time. So whatever your niche is, whatever you’re gonna be putting, you’re trying to build for your business, it’s gonna take time and Karina obviously, great example of that within the developer community.
Saad: Mike, I’m sure you have some questions for Karina. Why don’t you get
Mike: Oh, was I supposed to bring some? Oh yeah, yeah, yeah, of course.
Mike: All right. All right, Karina. So when, uh, we, when you are, I guess, getting with the developer from like the initial concept of what they’re going to put there, you know, if it’s going to be, multiple units, what the design is, what is kind of in vogue or desirable at the time in terms of product, how involved are you?
Mike: How do those conversations take place? And if a building is going to be finished a year, year and a half later… things out and allow for maybe a little bit of leeway if the market shifts or if tastes shift.
Karina: That’s a great question. So I think, you know, I get brought on at different stages depending on where the developer is at. I personally like to be involved since the very beginning before your framing changes are defined because obviously, the person that’s gonna be able to net you the highest amount should be involved in the decisions that dictate how much you’re gonna get, if that makes sense. And so, sometimes if I come in at the end of the project, certain decisions that significantly affect price have already been made and I can’t influence that and that is going to have an influence on the total sellout. Ideally…go ahead.
Mike: Can you give an example of something like that?
Karina: Yeah, a hundred percent. Its market-specific and it comes down to understanding what that marketplace is looking for in that price point. I think the people who have the best understanding of that are the agents. And of course, you know, if you’re developer who like only works in this one area and this one price point. Yeah, you should have an understanding of that as well. But if you’re not, you might miss a thing or two.
Karina: I don’t know, it kind of depends on each market and the price points, but missing basic things that, you know, seem small, but end up being big.
Karina: So, for example, having having a stackable washer dryers versus a laundry room in like a million-dollar price points, like two, three, four million-dollar price points, like little things like this. Having certain decisions like that would impact price when things don’t feel intentional. Or like when things feel like it’s an afterthought.
Mike: Okay. Yeah, like adding a half bath here or something like that. Yeah, okay, I got you.
Karina: Yeah, washer/dryer in the basement versus in the bedroom level. Like not thinking through how the space is being utilized, right? So you can have 2500 square feet, but if that space is allocated in a way that feels unfunctional, then it’s not it doesn’t serve its purpose. Like if we have oversized bedrooms where in reality, okay, it could have been a third or two thirds of that size and we could have gained in the living area, which where it would have been more impactful, just little decisions like that.
Karina: I love being involved in the framing process because I can help make those decisions. like going on site and actually feeling the space and saying, actually on paper this felt this way, but in person we should make these changes based on this.
Mike: Terrific. love that.
Karina: Also, when I’m involved since the beginning, that gives me, mean, 12 months or so, whatever that project was going to take of marketing time, right? So it takes weeks to get the renderings back as you guys know. It takes weeks to put the website together. mean, know, relatively to get all the marketing together–website, floor plans, renderings, pricing–it just takes a little bit. And so it gives me the time to put it out there.
Karina: I do believe in selling pre-construction and I think that the question around whether, how do you account for market adjustments? I think that it depends on how you’re marketing. We’re not going to go, let’s say it’s an eight unit building. We’re not going to go and list the eight units on the MLS, right? We’ll be strategic as to which units we’re putting on there. But then we might have a secondary means of marketing for people to see the full project. So it might be a website.
Karina: Something that I’ve liked to use in the past is Zillow new construction, the builder Zillow’s builders new construction site. You pay like $50 a month now. (It used to work differently before.) Now you can pay $50 a month to show up on a Zillow builders website. And what you can do is Zillow will charge you now per lead a ridiculous amount. So instead of saying, I want to get the lead through Zillow, what I’ll do is I’ll put the project on Zillow, but I’ll have my website linked. A buyer will so the project that gets exposed on Zillow to the marketplace, but if they want to learn more, then they’re going to click on that website and then I’m going to get the lead directly. And so I kind of bypass that whole $300 per lead thing.
Mike: Hopefully, Zillow isn’t listening.
Karina: But apart from that, one of the things that’s important to highlight about having pricing off the MLS is how it allows you to remain dynamic. So yes, sometimes we might have to go to lower the price, but there have also been times where we can increase the price because we are in a position to, where, hey, maybe we’re 75% sold out. We feel very confident with where we’re at and we can push those other units because now we’re not held by our holding costs, right? Or maybe X amount of units pay off the loan once we get to CO and then we can be more aggressive with those price points.
Karina: I’ve done that on multiple occasions where we actually increase the price point on the website. You just adjust based on what the market is doing, especially when a project takes, you know, 12 to 18 months.
Saad: I have a question on the, mentioned framing, you mentioned being involved at that stage. Like how receptive are developers to…and I’m sure it varies, right? But like, like how receptive are they to the changes you might wanna make to their plans? Are they generally receptive? know now you’ve built some clout, right? And developers, especially the ones that you’ve worked with a few times maybe have a certain level of respect for you and all that kind of stuff. So they’ll take your suggestions a bit more seriously. But generally, are they open to those changes or do they fight you?
Karina: That’s a great question. It depends on who you’re working with, as always. And I think especially, it also depends on what stage of the project we’re in, right? So if I go in and I see that MEPs are in and I want to make a frame-in change, I know that the developer it’s going to be harder for me because it’s going to cost him more money to have to go back, make that change, get the electrician back out, get the plumber back out. It’s less likely that change is going to happen. Which is why I like to be involved since the very beginning. But if I’m telling you, I think we should make these changes because I think it will significantly impact price, a lot of times they will. Unless I’m in a new market or it’s a new price point or it’s kind of at the edge of what I haven’t done too much yet. Even though I know that I’m giving them sound advice based on the data, they might think, well, I’m more experienced in this area than you or I’ve sold many of these before like this, so I’m fine. That’s always a little frustrating. Um, I’ve worked with developers where they’re literally like, here’s the description, here’s the price and here’s the way I want the photos and listed on the MLS. I’m literally like, okay, well, what did you hire me for? Cause I’m not here just to open the door. I’m here for strategy. I’m here to advise you.It’s because my opinion does hold value and I think that I’ve definitely learned my lesson and I think my intention is to work in the future with people who understand the value that I bring and see me as a partner and care about my opinion.
Saad: Love that. That’s awesome. I mean, we’ve got a bunch of people who’ve joined. We’re talking to Karina about her experience working with developers. She’s sharing a lot of great insight in terms of how she works with them. So if you’re an agent, especially. Definitely listen to some of the things that she has to say.
Saad: In terms of her journey, in terms of the ups and downs. So let’s get to that. So you shared some of the ups and downs. What are some of the common misconceptions you feel that people have when it comes to um working with a developer? And I mean that both from the perspective of an agent as well as of a buyer, a buyer that’s working directly with a developer.
Karina: So I sometimes wonder, oh all the time I wonder, why I work with new construction when I’m like my sales cycle is now 12 to 18 months versus a 30 to 45 days where you’re in and out.
Karina: All the amount of resources and planning and time that goes into it while you have this project under construction. I think that that’s one of the considerations to have when you’re going to new construction is the amount of funds that you’re fronting, rendering, signage, mean marketing. upfront that you might not see until a year later.
Karina: I’ve had times where I’ve started to market properties only for something that happened with that developer and their financing and all of a sudden the deal is not happening and I don’t have a listing. So those are the things that are downfalls right of working in new construction.
Karina: I think that it’s also very difficult to sell pre-construction with a developer that isn’t organized or communicates properly. You want me to sell this pre-construction, but there are certain things that I need. I’m now at a point where I know exactly what I need. If this is the moment we meet, I’m like, hey, I need all these things. Then weeks go by and months go by, and I don’t have the actual specs or this and that. And at the end of the day, if you’re a buyer, you want to know what this is going to look like. You want to know exactly what the tile is going there. You want to know the appliance package. You want to know those details because that’s what I’m going to be able to use to sell you on the vision. Without that, there is no vision. Without a vision, there is no buyer to close.
Saad: Right. Yeah.
Mike: Yeah. Could you dive, dive in a little? That’s a curiosity of mine of like, even if the building’s done, when there’s no furniture or anything like that. People have limited imaginations as to what that actual space feels like and is useful for before it’s completed to even imagine what the room is. So, what is your technique of getting that vision in somebody’s brain so that they can see it without it being physically completed?
Karina: I think this question ties well to your previous question actually, because I think what some of the people, what sometimes agents don’t realize is how knowledgeable and educated you need to be when you’re selling pre-construction, not only in regards to, what’s going in at the end, but all of the construction related questions, because that’s how, especially when you don’t have a finished product, you need to have the answers. You need to know everything upfront. You can’t have a buyer come through and say like, “Oh, what are we doing for water prevent or like what is the developer doing for water prevention?” And then you’re like, “Oh, let me get back to you.” You need to be the you need to be so confident in what you’re selling that you relate that confidence into the buyer. And the only way you’re going to be able to do that is with preparation and preparation means having the knowledge upfront. So this comes back to the developers.
Karina: When I first meet with them, there’s two things I want: the specs and if you’re working with a designer, I always love that because they make my life so much easier, but if they’re not, I want the specs of what everything’s going to look like at the end. I also want, what did we do for installation? What did we do? Give me your installation invoice. Don’t worry. I’m not going to share it. Don’t worry, but I’m going to take that invoice and I’m going to say, okay, they use closed cell here. They use open cell here.
Karina: Let me take a step back. Let’s say it’s closed. Let’s say it’s closed cell. Let’s say it’s open cell. If I just say that to a buyer, maybe it’s pointless. But do you know how to take that fact from the construction and relay it to the buyer so that they understand why it matters? For example, closed insulation. It’ll help with noise insulation in this area. And so that’s specifically why we did it or resilient channels. Even if we hire with cell developers, even if you have to do it per code, because I obviously work in different markets, tcode will vary. Even if you have to do things per code, but it helps me point to the quality of the construction. For example, in Somerville and probably in a lot of other places, you have to use resilient channels before hanging the drywall and that helps with noise vibration.
Karina: So, I’m walking through a site, you can see that if you’re at a point in the constructor, you can see it. can point out to the buyer and say, “hey, you know, this is going to help reduce the level of noise between the units.” So, all of those details, right? The windows there, is there anything that I can say about Marvin windows versus Anderson windows? I’ll literally go on their websites and take their selling points and I’ll use that and I’ll be like, well, here we’re using this, which is actually a better, yeah, which is actually better than over there because of X, Y, and Z.
Karina: Just small things where, especially if you know you’re selling, you’re in a market where your quality is better than the rest. Buyers don’t know that. Buyers don’t see that. They can’t really tell the difference between a Home Depot cabinet and a custom cabinet. And being able to speak to the quality of those things because you actually know it, is going to help paint that picture of quality. So that’s all understanding construction specs, right? But then also, of course, to paint that vision, it’s using the finishing specs to create renderings. As I’m going through the showing, I’m showing them the rendering and I’m showing them what the room will look like as a finished product. They need to visually be able to conceptualize it. I’m doing the whole showing like that. And I’m building trust regarding the developer, right? Because we need to like mitigate the risks that the buyers feel during that showing, which is, do I trust this? It’s not finished. Who’s a developer? Is he a good builder?
Karina: You’re the only person that that buyer is relying on for the information and you need to like have the whole thing together.
Saad: Yeah, I think basically everything you just said speaks to just being an extension of the developer. Like, you know, the ins and outs, while being a good salesperson, right? You can talk to all these details, answer these questions, all that kind of stuff, be available. You talked about the details on installation, things like that. Like you said, preparation. That’s critical, right? And that’s key with any client that you’re working with, whether it’s a buyer, a seller, investor, what have you, but I think on the developer front, it’s a different level and I think it’s super helpful insight to have that.
Saad: We got a bunch of other people joining too. You guys have any questions for Karina? Karina’s talking to us about working with the developer ecosystem and kind of like the mindset that she needs to have as an agent that works with a lot of developers. So, if you guys have questions, please drop them. We’ll try to get them in there in the next eight minutes or so.
Saad: Karina, when it comes to buyers, are there any tips that you would give them if they’re looking at one of your pre-construction or new construction type of builds that you work with? Is there any tips that you keep in mind in the back of their mind?
Karina: I mean, I think one of the biggest things is expectations around timelines. Like we see this over and over again where we set a certain deadline and then it ends up being well past that. And then if they’re not prepared adequately for that, if there were relocked extensions locked in before the appropriate time, then we’re dealing with those discussions.
Karina: More importantly for me, I really care about someone’s livelihood, right? Like we cannot be telling somebody it’s gonna be done 9/1 then that buyer’s lease is up a 8/31 and, if it’s all gonna work out magically, no. I mean, so that’s one of the things I lead with when it comes to buying new construction. It’s basically this. lf you can’t afford to for there to be delays and to have housing, then it might not be for you. So, that’s really important for me. The stress that comes from not having a house situated. Apart from that is…who’s this, who’s the developer, because all new construction is in…all renovations are in…all builders are not made equal…and that’s something I’ve certainly learned. And what are their previous projects? This is something that obviously varies if I’m just representing the buyer versus I’m listing to them. But from representing a buyer, I’m like, who’s this developer? Do they have previous projects that we can look at? Is there any due diligence that we could do? I mean, I’ve seen other agents do this and anybody can do this, which is, I’m buying from this new builder. This is their portfolio. Can we find anybody who was on the buy side of those previous transactions? How did they handle punch list? I mean, this is where I start to get, I’m now at a point in my career where I am really concerned about, moving forward, working with developers that stand by their work, that treat their line of work in the same way that I treat my line of work. It’s about the client experience, because what I’ve learned is that my reputation will be tainted by the developers that I work with. I will be seen as a partner because I’m the one selling those things, right? So, did they finish the punch list or did they just go and it just ghost to you and never show up? These are the types of things that I do think buyers should be wary of. Making sure that you have punch list, obviously language in there, in your offers and I think right now specifically buyers Probably have some chance of getting considerable concessions from builders specifically less from a media one-off seller, but if you’re builder with a ten unit build a unit build here and another five unit build there like you definitely are incentivized to move units so I think also advising them to try and secure deals from builders I suppose on the by buy side….on the list side forget about it.
Saad: Some great points and hopefully there’s some buyers that are on the live right now or that see the recording afterwards that get some great tips out of that. Some of the things you post to your stories, you mentioned it earlier, and Mike kind of alluded to it too…You go into a new construction, you see a room, we go through new construction builds fairly regularly so we can oftentimes tell, closet’s gonna go here, powder room’s gonna go there, like, you know, here’s where the living room’s gonna be, this is the kitchen, all that kind of stuff. A lot of people can’t. So, I like that when you go on your stories, you’ll be walking through a new construction and then you’ll put the rendering, like oftentimes as part of that story. So I think like, if you’re an agent that has an opportunity to work with developers, that is super helpful, super invaluable. It takes the guessing work out of it.
Karina: I want to add actually, if you were on the buy side of a new development deal, it’s really important that you work with an agent that understands new construction because you’re just, they’re going to be able to see things from a certain lens that agents who are not very experienced with those deals are and especially as relates to the contracts as well, because like things that I can just think of them at the top of my head. If I have a buyer, I’m going to make sure that that punchless language is very precise in a, hopefully a way that is favorable to the buyer. If I’m representing the buyer. Where I’m at least making sure that the attorney is keeping that in mind. I’m making sure that the language is tight around deadlines and extensions, regarding COs and things of that nature, again, on the buy side. And if the project is not finished, you need to be very detailed about how that spec sheet is called out, because if it’s not in the spec sheet, you have no power over it in reality. So just making sure that those details are ironed out on the buy side for sure.
Saad: Got it.
Mike: If on your end, Karina, if you’re on the seller’s end, understanding that buyer’s agent too, because we’ve had situations where you’re right, that person doesn’t really understand your construction, we’ve all made our share of mistakes at the beginning of assuming some things can happen. it does need to be super tight and specific because there will be buyers that are, on a whim, asking you to change this or expecting one thing and then like that becomes a pressure issue and because it’s delayed, you just are with this sort of tension for weeks and months leading up to the closing and we all want to make sure that everyone’s happy at the end.
Mike: So the tightness of the expectations and that’s something that we, Saad and I will always tell our buyers is like, if they’re saying September 1st, expect end of October. As…
Saad: I’ve had a two year delay before on three units in the same building. There was a two year delay and two of them were 1031 exchanges, so that was tough.
Karina: And then I’m doing my job all over again.
Mike: Yeah, right, right.
Saad: Well, Karina, we want to be respectful of your time. This was awesome. Thank you so much for sharing all this intel with us. We’ll definitely have you on again to review some things. But really quick, want to ask you one thing too…obviously you’re busy…you’re working with both buyers and sellers. Right?
Karina: Would say I’m primarily listening heavy right now, but yes, I mean, I’ve done a lot of fires premiere in the beginning.
Saad: So, you’re busy. There’s probably a lot of agents who are listening in on this and what have you. How do you manage your time?
Karina: I’m still learning that.
Saad: Mike, Mike, didn’t I say that? I knew you were probably going to say that?
Karina: Yeah. Yeah. No, I’ll be honest. I’m still navigating what that is. I’m really focused right now on trying to build systems because I do feel disorganized. I do have a lot going on. And I think the only way that I’m be able to scale and do the type of business that I envision myself doing is by having a very systemized business. And that’s what I’m actively working on right now.
Saad: Yeah, and while making sure you’re taking care of yourself too, right? It’s a-
Karina: Well, getting some sun on my skin, going on walks. I have learned to prioritize myself, which I think, like when I was brand new into the business, I did not have that. Everything was urgent. I had to take this call here to do that, and it was hurting my personal relationships and my own well-being. And I am at a point where it’s like, no, me first, and then the business comes after.
Saad: Love that. Awesome. Awesome. Well, thank you so much, Karina. This was awesome. was great. Thank you guys so much.
Mike: Real quick. Are you BC person?
Karina: Yeah, yeah. I graduated from BC. Did you go to BC?
Mike: Same.
Karina: Oh no way.
Mike: Yeah, right on. Nice. I love that. I felt the warmth here.
Karina: This is awesome.
Mike: Get rid of those jumbos.
Saad: Yeah. We’ll check in on you again. And hopefully we were able to do some deals together some other time. do it.
Karina: Yes, let’s do it.
Saad: I’ve shown several of your listings. Unfortunately, nothing’s come together yet, but we’ll figure it out.
Karina: We’ll manifest it before the end of the year.
Saad: All right. Sounds good. All right. Thank you, Karina. Thank you, guys. This is Storii Time. Join us next week. All right.
Karina: Bye.
Saad: Thanks, Karina.
Mike: Bye, everybody. Bye-bye.
This Instagram live is transcribed for your easy reading. If you want to catch Storii Time live, every week, follow @saadmun1r and @photolowski on Instagram.