Transcript for:
Efficient Strategies for Construction Management

so how do you how do you um because you said it was nine yeah so how do you go about managing all these and what's like the the timeline for for that amount of homes yeah so my bill timeline is 120 days for one all of them for nine yeah so four no more than five months because we were hitting it we're pouring two to three slabs at one time I've got two Crews doing the framing hold on hold on hold on it's crazy hold on hold on I don't want you to go over too tag wait I have more questions hold on I'm gonna help you out here okay Vanessa take a drink of water okay I need you to break down the steps now of building non-homes out of town from A to Z if you can yeah so that way they can kind of understand the flow chart of all of this because how you was about to break it down the other one over their head yes so once a kiss kiss keep it simple stupid yes that's what I took I'm the stupid one so I say keep it simple stupid it's me talk to myself um and the Chick-fil-A model okay right so we don't have a menu we don't have a jack-in-the-box McDonald's maybe we don't have a bunch of items on our menu I've got two floor plans okay a 1500 floor plan and a 1600 floor plan so I built four of one floor plan and five of the other so as my trades are going they're just duplicating the same model what do you mean by I'm sorry what do you mean by trades you said before too oh trades are the subcontractors okay I never heard that I never heard that before so that's why I'm sorry I'm coming from Texas guys I don't know what the lingo is out here no you're good you're good keep going okay yes so my subcontractors um and so they'll pour three slabs at a time slabs this Foundation slabs are Foundation hey man I'm just saying go ahead yep that's cool and then and then you have like two Crews so they're just hopping from each house to each house and they can do two to three Plumbing grounds a day so yeah so that's how I'm easy to as soon as they finish that house they hop over to the next house they finish that house they hop over to the next house and then I'm I try to keep the finishes very similar right to not complicate anything throughout that process right um but I mean I think it's just being intentional about being efficient right right um and everybody being on the same page so timelines and I think naturally I'm just a strong like project manager in my head yeah so okay it's like the a warehouse line basically yeah the assembly line it's the assembly line slab slab slab slab slab okay inspection inspection specs inspection boom frame and frame and frame and framing yeah inspection inspection inspection rough and rough and rough and roughing yeah it's an assembly line it's like building a car basically so all you guys in the audience right Vanessa calls her name for those of you just logged in yeah she's from Houston Texas everything's bigger than Texas that's why she's doing 10 Clips right everything's bigger in Texas so you created your own assembly line for all your Warehouse line for Building Homes at scale and that's how you're able to do these in like six months think about the iPhone you know it's just like just Apple products in general right you have your core product line like I mean I'm not a Best Buy I'm not trying to put all these different custom houses like we would drive ourselves crazy but we give them a Sleek product so my houses are modern finishes Sleek designs you give the people what they want open floor plans so I'm like if we can try to create the best product at the most affordable price and give it the best finishes as possible well then it's a win-win and that's why they go under contract before I even break ground so you selling off the renderings off the renderings the renderings is designs like I show you Garland Gardens I just want to just the renderings they said you asked for me or for I mean I'm for all of y'all I know what a vendor is okay a lot of this stuff applies to you know other things too okay just want to make sure yeah yeah I appreciate that rendering is a picture yeah basically basically or our concept to be a concept too yeah that's brought to life yeah so how do you um how much would that like cost like what's the how much does it cost to even start something like that like what are you putting up for this which part no question because it's like nine homes that's like yeah what do you you know so you have to buy the land right so like I said the max I'm spinning on the land is like 10 grand a lot so we had to put cobble up ninety thousand dollars how much what's like the how much uh land is it for a 10 for 10 grand um 50 by acre 50 by 100 50 by 100. your house the land that's on your house right now that's probably a 50 by 100 lot okay okay so each lot so then we had a private investor I'm sure I know you talk about private investors on your channel we had somebody come in with us put up the money for us to take down the Lots okay and then we go to a bank and we tell the bank we need a construction loan we need a construction loan to build all nine houses right and so my business partner had a good relationship with the bank and they were like yep we've seen the work that you guys have done let's do it and so when you go to get your construction loan you have to submit your Construction uh breakdown so your construction costs right so I'm saying okay it's going to cost me a hundred and seventy five thousand dollars to build this house right okay and you have to submit that to the bank get the submit your tax returns your personal financial statement and I tell people don't like if you don't have all these things like if you're not in the position to do all this yourself partner with somebody who is right and that's what I did I partnered with a general contractor in the beginning he he knew everything he knew everything about construction he had banking relationships he had got knocked out in 08. I had the land and I had City relationships so it was a a win-win yeah um or you find somebody who is just financially strong right and have them be the personal guarantor on your loan and so then as you're building you take out draws so after we pour the slab then we submit to the bank and we say hey Bank we just poured our slabs we're ready to pull that 20 000 from that slab from that line item yeah can you come send your inspector out and then pay me the money so then I can go pay the trade and then that's what we do for each stage of the process well a lot of times you know you're cobbling it up so you're not you know yeah so it's like you do it's like phases yeah I'll do like we'll do like seven draws throughout the entire 120 days is that like a what loan is like a 203K kind of 203k is hard money is construction loans they all anytime even if you're paying no cash you should never give your contractors the money up front right you should always pay them in draws too and you are your own inspector right so even with Garland Gardens like work gets done let me see this looks good to me here's payment right that's why I was in Home Depot today buying roofing materials because now I'm I'm the GC sorry like I'm gcing My Own deals so I'm trying to save money everywhere I can so I'm gonna go buy my materials now that delivery is coming on Monday they have to go do my roof yeah roof is done I make sure Ortiz across either got it here you go send me an invoice now I pay you let's now move on to other framing things that we got to do blah blah blah so everything's in phases so when you you said um now is that per home these these loans so is it you do that all in one shot or it's like on uh like over the over the next couple weeks so we'll get individual loans but with One Bank okay so yes and it's important that your numbers like we do everything in QuickBooks as well so each house is set up as its own project and QuickBooks and my mom works for me she's been working for me since the beginning of the company and I have her send estimates and actuals to my inbox every Monday on each job and I go through a line item by line item and I want to see what did we estimate for this and what did we actually spend because I don't want to get to the end of the project and say why don't we make any money because I did that was me in the very beginning because a lot of times as a beginner investor you're operating on so much enthusiasm and optimism and you're not being a realist and you're not thinking like a business person but you have to track those numbers so that way for example on those same nine homes that's when covet happened lumber prices skyrocketed I was like and I had them all under contract and I said dude our company is about to fold like I'm we're going to be in the red when we get out of here yeah and I and I was like hell no so I called the city I said we need a price increase like here are the numbers coming from the suppliers I need to at least increase these houses by 15 20 grand I contacted the lenders and I said hey if we increase their mortgage the price the purchase price amount what would that do to their mortgage it was like 50 75 dollars yeah so I call it each buyer and I was like hey I hate to have this call I was like but I'm not gonna be able to finish this house if we don't increase your sales price and thankfully a lot of them were like oh yeah my uncle is trying to build a new fence like he's seeing he's saying these prices are crazy at Home Depot you know Home Depot yeah so I was like okay I was like but it's not going to hurt your you know mortgage that bad but um but those are the things if you're not tracking your stuff in real time right you wouldn't even know you won't know yeah and you have to be nimble you have to be on it yeah it's just but it's fun like I love this stuff I really do