LA developer gives advice on rebuilding after the fires

Marketplace’s own David Brancaccio is among the thousands of homeowners who lost a house during January’s firestorms in and around Los Angeles. He reported on the experience of losing his home in Altadena and spoke with others who shared similar experiences.

Among them is Waleed Delawari. He’s the founder of the Delawari Investment Group, a property development firm in Los Angeles that does both home renovations and new construction, and has a background as both a mortgage broker and a contractor.

Delawari, along with his wife, children and dogs, was forced to evacuate the family’s Altadena home — which was lost in the fires. He spoke with “Marketplace Morning Report” host David Brancaccio about the experience, as well as some of the things he’s thinking about as he looks to rebuild. The following is a selection of an extended interview with Delawari, which has been edited for lengthy and clarity.

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On what was left during evacuation

Once we left our house, we realized that the hills were red, so unfortunately, we weren’t able to grab anything, and like many others, [it] was a total loss. And so we had enough time to bring the kids down to Pasadena, go back, get the dogs, come back down, and that was basically it.

We didn’t get all of our papers, you know. And again, hindsight’s 20/20. I wish I would have taken probably 10 minutes to grab papers, but I was just so focused on getting the dogs and then getting out, you know … so now we’re going through all the different centers and trying to put back paperwork, getting birth certificates and passports together, and driver’s licenses, and all that.

On the initial EPA assessment process

It’s a great question, and it’s something I asked [the EPA about], and they looked at me and were like, “It could be anywhere between two to three to four months.” I mean, they’re on the ground now, and they’re just trying to assess the damage, from what they said today. And, you know, of course, I was like, “Well, why can’t you assess while you’re inspecting?” And they’re, you know, “It doesn’t work that way,” right? So they have to build out this plan and go through — they do provide a website that you can check your property as it’s going through the process. So they said that, you know, it’s inspected, it’s in process, or it’s cleared, or they use a term called “deferred,” meaning that they have to get another agency to come in. So those are all the different stages, it sounds like, that you can see.

They’re just coming here, and they have to get the lay of the land. And then their focus is on, like, lithium batteries and homes. Like, I had a Tesla battery wall, which is highly toxic, so they want to get to those. And then they will sift through [debris], then at that point they’ll go to phase two, where you can opt in or out of cleaning up with the government or yourself.

On the cleanup process

If you had some money built into your insurance policy for debris cleanup, you can opt out of that free government assistance, which could take anywhere between, supposedly, eight to 12 months — on top of the EPA timeline. And so you can opt out and use a third-party company to do the cleanup, you know. And then making sure you use a proper third-party company is very important.

On the costs of rebuilding

There are a lot of good people. There are very well-qualified individuals. But just like everyone else, doing the due diligence, asking the right questions, not, you know, going with the lowest or the highest.

You know, someone asked me today, what’s my price per square footage to build? And I was very open with them. It’s just like … I can’t give you that answer. I just found out my slab is broken. So I have to pull that out. You know, I have to pull out all my concrete. I have a retaining wall that that burned. That price per square footage is going to easily change, you know. And so I think it’s just taking a step back and really trying to understand the process and going through and building, and then hopefully figuring out what needs to be built from the plans.

On building back “like for like”

There’s other fires that they’ve created these type of protocols [for] — so it’s like for like, potentially plus 10% right? So that’s kind of the talk. We will stay within that like-for-like umbrella. You know, I had a single-story home; I’m not gonna add a second story. It’s gonna be roughly the same. But, you know, the changes that you could do on the inside — you know, the walls and the cosmetic, that doesn’t apply, you know? And so you can make those adjustments if you don’t like something. But we’re gonna still do and build the same and try to use the expediting process to help us out.

On building fire-resistant structures

I’m going to do steel roof. I’m going to do no eaves, you know, because that was a big thing with a lot of properties. Embers come down. You know, fire sprinklers for all new construction is mandatory, but you can actually even put fire sprinklers through your eaves if you needed to, so they can all tie in together.

I’ve been using, for some of my multi-family properties, this cement-based siding. It’s cement, so it’s fire-resistant. But it looks amazing, it’s beautiful. You paint it, you couldn’t tell the difference. And so there’s a lot of things that we can do moving forward that, you know, it’s gonna increase the cost a little, but I think that reassurance of knowing that there is some product there that’s not flammable and not gonna just easily catch on fire, you know, why not make those adjustments?

A lot of these homes were older homes. [That’s part of] why we moved to Altadena. You see the character and, you know, the neighborhoods — that’s something that we have to try to rebuild.

There’s a lot of things that can be done. But again, understanding that and [hiring builders that have] experience in it [is important]. We’re all displaced. The last thing that I want to do and put my family through is have another delay in construction because of inexperience.

On where to stay while rebuilding

So we have decided to convert my office into a home. You know, this office in Pasadena. A lot of these properties are zoned commercial-residential. So this has been my office for the last, I don’t know, 5, 6, 7 years. And what you hear now is the conversion of bathrooms — adding showers in the bathrooms — because now my family of four kids and my wife, we’re living here. And so we’re going to live here until we rebuild. So it’s trying to get the house so it could be comfortable enough for all of us just to be here.

They’re saying, if you cleaned your lot, they may allow you to put an RV on the lot. You’d have to connect to the sewer and do all that, but you could be living technically on your lot while you’re rebuilding, you know. And so if you have the space for it, so they’re going to try to be as accommodating as possible — but it’s, you know, getting to that point.

On building versus opting for a prefabricated house

Those prefabs have to be approved by the city first. So that is a whole other set of hoops you have to jump through. So assuming it’s approved, prefab construction, does it really give you, from experience, the same level of return that a boutique ground-up, customized home gives? So those are the two issues. That I would probably worry about is, No. 1 is the regulation to try to get a prefab here? And then two, you know, we’re all trying to build back our equity, right? And so making sure that we build that back at the level it needs to be is very important. And I don’t know if a prefab could do that.

On the people you need to rebuild

A lot of people don’t really know that, again, depending on the home and the size, you don’t really need a licensed architect. You need someone to draft up the plans and just the basic plans — again, if they’re more complicated, you need the architect. You do need a licensed engineer and other things. So, you know, when you’re sitting down and going over the plans, those are the adjustments that you need to make or talk about with the people you work with. It’s like, what can you do to add those changes? Like the sustainable products or the metal roof or so on? Before going through those steps, it’s really also understanding how much money you have available right to rebuild.

It’s more of picking the right contractor that understands not only new construction, but that can that can build at a scale that you need, right? And so, if they’re helping one or two or three people in your neighborhood, making sure that they have the know-how to build that large of a property with that many people and get the products and run an efficient construction business. Surprisingly, most contractors don’t know the new construction side of it, or the understanding of how to build with scale.

On finding trustworthy builders

There’s going to be a big need [for contractors]. I think the best thing to try to do is to go by experience, you know, get good referrals, work with people that have built recently the type of home you’re looking for. You know, don’t just go off with someone that’s saying the lowest square footage or whatever the cost is. Actually ask and review their experience, and then ask them, “How are [you] going to run the process?”

One of the reasons why I started my own business is, you know, I come from a highly-regulated environment, being in the mortgage broker space. And so … as I grew in the developments space and I started building more, there were a lot of inefficiencies. And those inefficiencies cost time, cost money. I’ve been in those meetings where the contractor, the designer, everyone’s fighting, and then you’re like, “Wait a minute. I’m paying for everyone to be here.”

The contractor is going to be a vital key to this process, because they can help with expediting, they can help with building materials, they can help with, of course, just the procurement, and then maintaining that timeline.

On avoiding scams and low-ball offers

I received a few calls from past referral clients, and one in particular was in a situation where they didn’t have adequate insurance, and they got the property free and clear from their parents. So it was, you know, multi-generational property. And all I did was tell them, like, “Look, by sitting on it and allowing even the cleanup to occur, the value of the lot [increases] more.” So don’t rush, don’t make any decisions [right away]. And there’s hopefully other institutions that will come in to help bridge the gap of some of these people that don’t have the means to rebuild, to get them back into homeownership. And so, trying to avoid an emotional sale at this moment where we’re all just so sensitive and can’t think straight is the right choice.

The amount of now companies or scams that are being thrown to us as homeowners, it’s overwhelming … I’ve seen it myself. I’ve gotten a text message from it looked like a FEMA rep, and when I called the number, I said, “Can I get your badge number?” And they started, of course, backtracking. And I just said, you know, “Can I get your badge number?” again, and they hung up. I’ve gotten a few from different [fake] Red Cross agencies, you know, all the different ones.

But then it’s also the businesses or now the people that are coming out and trying to offer to purchase land, you know. And saying, you know, “We’re in your area, working with your neighbor, and we’re purchasing their lot. Are you interested in doing a bulk sale, for example?” And it’s just all a gimmick, you know, to get you on the phone and then try to get information out of you.

On price gouging

Unfortunately, there’s a lot of companies out there that, the moment they know you have insurance money to help, they will inflate their cost or their prices. So working with someone reputable or someone that can advise you on the firms to go with is going to be important, because it’s just so much information that’s out there, and so many negative players are already in the mix.