Something in the world of floating have you stumped?
Show Highlights
Often times banks will want your building plans to approve your business loan, but you can’t purchase a building before the loan is approved. Sometimes health departments will want to know which tanks you’ll get before they’ll approve your business which can also hold up your bank loan. It feels like a Catch-22 and has definitely infuriated plenty of float center owners just starting out.
Graham and Ashkahn lay out the confusing battle you’ll have to take on to get your business started and the ways in which you can get approved, plus the silver linings these extra hoops can offer you.
Listen to Just the Audio
Transcription of this episode… (in case you prefer reading)
Ashkahn: Hey there, this is Ashkahn.
Graham: Hey, I’m Graham.
Ashkahn: All right.
Graham: And today’s question is, “how am I supposed to get a construction quote without having a specific space in mind yet? The bank is requiring one.”
Ashkahn: The bank is requiring one.
Graham: Yeah. So this is not an uncommon problem that you hit during the process. There’s this whole chicken and egg thing. Sometimes it’s between the health department and-
Ashkahn: Buying a float tank.
Graham: Yeah. They want specifics of what kind of tank you’re having, but you don’t have a loan yet, but the bank wants to know that you can get health department approval before you can open. Or the bank themselves wants to see realistic quotes on moving into a space so they know you’re not just making up numbers, but you don’t have a space because you can’t get one until you get the bank loans so that you can sign the lease.
It just goes around and around. From someone who’s approaching this for the first time, it can seem like absolute madness. Which it kind of is. If you have that viewpoint, it’s understandable. You have that for a reason. So what do you do?
Ashkahn: Yeah good question.
Graham: Basically you’ll end up having to double pay some money here and there’s no getting around that. But whenever you don’t have your building solidified, your lease signed, you have the space you’re for sure moving into, you kind of have two options.
One, is to figure out a representative space. Look around at a few different spaces around town, get a sense for what kind of area you might want to move into, what the costs are, the ultimate square footage that you’d have. And then based on that, you can kind of draw up a rough size for what your space is. Whether it’s 40 feet by 40 feet, or 50 feet by 60 feet, or whatever it is.
Ashkahn: Yeah the nice thing is, most often you’re gonna be gutting whatever space you get anyway. Considering you’re going to be in a pretty fresh, empty sort of block is not that far off from reality.
Graham: No, and maybe your space will end up being a little bit different or you’ll have to totally redo your plans when you move in. But at the very least it’s indicative enough that you can show it to the bank and say, “Hey this is the kind of space we’re thinking about moving into.”
And then the other half of it is actually having your drafts person or your architect or whoever is doing the plans draw up what a representational float center might look like in that space.
So this is where you end up having to double pay for some work. What you don’t want to do is pay for a full set of plans meant to pass inspection, everything that you need to actually move into this space that doesn’t even exist yet, right? Because everything is almost certainly gonna change once you find a real building and get a real lease, your real float center life.
Make an estimate of what your space is gonna look like, and then when you’re drawing up plans it’s just an estimate of plans. You wanna have it marked down that yeah, you’re installing this many float rooms, there will be a lobby, float rooms are gonna be double thick. You have this list of requirements that you have for the build out, and you’re getting a quote from the contractor on that.
Those bids can largely be reused too, when the contractor goes to move into your actual space. Knowing that the walls are double thick, knowing that you have a certain amount of amps going into the space, kind of making general assumptions based on just the state of commercial buildings around your town. At least the knowledge of those and the bid requests minus the specific plan drawings should all still come in handy when you go to make your real drawings.
Ashkahn: And you know the nice thing is they’ll give you an estimate of what the heck is going on and how much construction in your area is gonna cost. I think the other thing that is probably good to put into this is just to add some kind of contingency onto it. Because often in your ideal world, you’re not gonna run into these weird little eccentricities that come with the spaces that you’re eventually actually going to run into. Dealing with like an extra bit of soundproofing along one wall because you have a certain neighbor or whatever it is. So just keep that in mind, too. As long as you’re building something super generic where there’s no crazy random hurdles, just put aside an extra chunk of money for that kind of unexpected reality.
Graham: Yeah, and hopefully that’s built into your construction contract as well when you ultimately get that drawn up. And certainly your business plan if you are taking this to a bank, which it sounds like you are if you’re getting a bank loan, for example. The bank will want to see contingencies written in there, too. The number of construction projects that have just gone exactly as planned is probably very close to zero, if not zero.
Especially on something of this scale. So if you don’t have contingencies written in there, it’s likely something you’ll get some pushback on from the bank as well. That’s kind of the deal. You do have to pay a little extra double time, maybe if you are using a real estate agent or real estate lawyer. A little extra of their time to find three buildings that might be representative. Sometimes the bank will be very specific about what they wanna see, too.
They’ll say, “Hey can you just give me a few examples of spaces that you might move into and then an estimate of what that will cost?” Or the bank will specifically say, “Hey we want a drawn up plan of what your space would look like in a representational space.” Or something like that. So if it seems like your contractor or your drafts person for drawing up the plans for this first hypothetical model is gonna be charging you way too much, maybe even just go back to your bank representative too and ask what exactly they need and how in depth it needs to go. Cause although they might have requested an actual plan drawing, maybe the case is that just a written out list of what you want to go into your center and a rough bid, and square footage number would be fine. And you don’t actually need to draw out plans.
Ashkahn: Cause you have an easy ability to impress people with the kind of construction that goes into float centers. So I think even just going with like “Hey we need to get this specific type of soundproof drywall and here’s the price of that per square foot and here’s my estimate of square footage of wall space and we have to do double stud walls so here’s my estimate of lumber and spacing.”
There’s a lot you just know off the bat that I think would sound very impressive and like you really had your shit together when you went to the bank representative.
Graham: Yeah and I guess I always like to pay attention to small projects like this that aren’t really final. The idea of getting plans drawn up for a space you might move into before you do is actually a relatively minimal project. So if you are choosing between different drafts people or different agencies for actually drawing up the plans for your real center, this might be a good little test case where you can actually have two or three different plans drawn up just in order to get past the bank, or sometimes this pops up for the health department who wants to see this kind of documentation.
Finding small tasks that you are able to vet your contractors on without getting too deeply into bed with them is actually a really nice boon sometimes when it comes along. If you hit this stage and you haven’t chosen your drafts person, think about this maybe as a nice test that you can put in front of a few different people.
Ashkahn: Yeah you might notice one person gets back to you in a few days and the other one takes three weeks and four emails to ever respond to you. Those are good early warning signs of who you want to work with.
Graham: Someone literally just scrawled their thing on the back of a McDonald’s napkin, and the other person has a nice CAD drawing. Also things to pay attention to. Warning signs, I like to call them.
Ashkahn: You might not notice those at first, kind of subtle.
Graham: And that’s pretty much it. It’s kind of a crazy process and you might find it for other things as well. And just know the people asking you to jump through these hoops also realize hopefully that you probably don’t have a real building yet and all of this is a little bit made up. Just recognizing the fictional nature of it and then asking for clarification if you do hit any weird impasses is probably my best last advice I have.
Ashkahn: Cool. Well, if you guys have other questions you wanna ask us, you can go over to daily solutions dot-
Nope. That’s not-
Graham: What’s our website?
Ashkahn: Float tank solutions? Floattanksolutions.com/podcast I’m pretty sure is what it is. And that’s good, type them there. Cool. All right, we’ll talk to you guys later.
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