Subscribe
Share
Share
Embed
The Real Estate Addicts (REA) podcast is a must-listen for anyone interested in real estate development, investment, construction and entrepreneurship. Each episode dives into a wide range of industry topics and features conversations with savvy, successful entrepreneurs who candidly share their career paths, challenges, breakthroughs, and the stories behind the remarkable companies they’ve built. Expect big personalities, thoughtful insights, and conversations that both educate and inspire.
Co-hosted by Ray Hurteau, Dan Rubin (Instagram: @rhinvestgroup), and Marc Savatsky (Instagram: @choose_boston)
Follow the Real Estate Addicts Podcast on YouTube: @RealEstateAddicts
00:08
All right, we're back. Welcome to the Real Estate Addicts Podcast with your host, Ray Hurteau, RH Investment Group. Dan Rubin, RH Investment Group. Marc Savatsky, Choose Boston, and joining us today is our guest, Adam Jaspon, Centerline Development. Nice. I was gonna do that on the table. Thanks for coming to the studio. do you think? This is incredible. I love your space. I'm jealous. We just need to hear it over and over how nice our spaces are. Nothing bought from Alibaba either.
00:36
Well, except that mug. want to, you want to talk about it? a quick plug. We're opening the union end of this month. April one is, is the soft launch. It's a coworking space. like to say it's like we work for real estate professionals, I need to come up much, much better, much more professional, less scammy than we work. Anyway, we'd, we'd love if you're looking for an office space in Boston, be surrounded by a really good network of people. It's a super cool physical space too.
01:06
Um, Adam, you said you were gonna, you're gonna, I've reserved an office space over there. Founding member. That's it. So tell us what you're going to be doing in the office. You guys are doing construction development, all of the things. Uh, yeah, all the, um, we, uh, so we have a few projects of our own going on. Um, and we're doing a quite a bit of client work. So, um, kind of spread out right now. Um, we've got work in Westwood, Charlestown, um,
01:36
A project we're proposing in Bridgewater. We've got a uh rental project, a whole device out in Lemonster going on. So we're kind of all over the place. Tell our listeners and viewers you're a GC. Yeah, we started out as a spec builder developer um doing only our own projects. um We've since transitioned to a mix of both. So we do custom home building, construction management, and we do some of our own projects. Very cool.
02:06
This is very similar to Sam and Nick who we had on a few episodes ago. Adam took over a project that I like did OPM work for during the zoning and approval process. I helped kind of shape the program in the building. uh Look at some initial budgets, make decisions on a very high level. And then as we came through ZBA, ah my client, my friend pulled Adam and his team in. And I had to then take the reins and carry it through construction and completion. You guys crushed that. Yeah, that was a great project. were- Six units. Yep. Six units and seven hill.
02:35
We were pumped to be a part of that team. Project went excellent. were thrilled with, I believe the developers were thrilled with the end result as well. Yeah. Where were you price per square foot at end of that? I think we were right around 300 square at the- Including your fee in there? Yeah, everything. That's perfect. It was a good, it was a great project. We were, I think we came in right around or just under 5 % over budget.
03:03
We were pretty happy with that at the end. Was it a weird transition going from being like your own developer to doing third party GC work? How did that go? Very. ah We had always referred work away. We were never interested in doing client work. And then Brian and I kind of realized it would be good to have, uh we wanted to get ourselves on payroll, honestly. It would be good to have some
03:32
revenue coming in, not waiting, you know, 12, 18, 24 months to get paid. So we did take on, we decided we were going to take on work. And one of our first projects, client projects was actually a friend of ours, who's a lender of ours. Shout out Brianna from Cardinal. And Brianna bought office space on Clarendon and asked us to fit it out.
04:01
Um, and it was, I was, I'm thankful that our first client project was with her and not someone we didn't know. Kind of work out all the kinks and the bugs. It's not easy setting up a new process. We know construction, but when a restaurant opens, right? When you just like invite your friends who are going to be like, don't worry that the
04:25
pizza took three hours. Are you okay over there with the microphone? No, mean typically not. You're destroying this place. You're trying to have him. Alright, go ahead. You were so rudely interrupted by Mark and his microphone blunders. Don't worry, the coworking space is much better. Fuck this guy. I hope so.
04:47
I might have to back out. Seymour's just working out the kinks. You guys want to run in his face? I'm sitting back there. there we go. right. All right. thing's going off the rails. Let's get back on. Let's get back on. right. Let's go. Let's go. go. So wait, Adam's a GC now. So he's working out the kinks with Brianna. Yeah. Well, it was like the biggest kink. Like, like, like the restaurant analogy is that like the waiter spilled red wine on the guest or was it just like the mozzarella sticks took a little too long to come out?
05:16
Yeah, the mozzarella sticks took a little too It wasn't anything like, you know, like the was a communication aspect. We had no process. ah We were so used to doing our own projects, making decisions quickly and moving fast. ah We had no process for communicating with the client, planning things out with the client, realizing that decisions might take days, not hours. ah So that was a learning curve for us. I mean, we delivered a great product. I think the office came out great. uh
05:45
but we learned a lot. then Brianna actually had us do a condo right around the corner for her as well. And it was a great segue right into that to continue to improve that process. And then from there, we ended up working on that condo project in Savon Hill. Process got better and now we're doing a custom home in Westwood and some hopefully newer client projects on the horizon. Do you operate mainly on like
06:15
A cost plus model, how do you handle? Typically cost plus, we try to stick to cost plus. uh Makes me feel comfortable and I can sleep at night. uh We have done a fixed fee um where essentially we built the budget, agreed on the budget with the client, projected what our cost plus fee would be and then locked the fee there. So that's just the fee. That's not the actual, if the cost of materials or labor happens to shift around.
06:44
Correct. fee is lost. That's way to do mean, there's cost of the work and then there's fee. And I like that you fixed the fee. It's like, listen, if you buy sub-zero appliances, you buy GE appliances, my fee doesn't need to go up or down. You figure out those things. I mean, within reason, I can see arguments for why, like you picking the Carrera Marble from, you know, this one spot in Italy and one piece breaks. It's like, you know how much of a headache you Yeah. I mean, I would push back on the appliance analogy just because there's more prep involved with.
07:13
certain appliance lines, Yeah, like locations of- uh Yeah, more thought. But you're not wrong. yeah, you're correct. And it's not really, you need to be specific in the language in Cost Plus about, if lumber goes way over, my fee shouldn't continue to go up, right? It's not really fair. Yeah, materials aren't really- I mean, they do most traditional construction contracts. Right.
07:42
And we've had contracts that way. But I can understand why somebody would want to fix the fee. They want to be careful things don't get out of control. With that said, we have a change order process. So if the client makes a change, this is still a 20 % fee on that change. client driven fee versus market force driven fee. That's a pretty good idea. You could even almost do a hybrid of that. have you done this where you kind of have a fixed fee, but then maybe you do have that cost plus, but almost a not to exceed an NTE.
08:10
on the fee or is that just to... haven't. ah I mean, we started with just cost plus. We've just done this fixed fee contract for the first time. ah But we'll see, know, as we get through more projects, I'm sure we'll find what we like and see if we want to make any improvements. Well, the very first project, the very first new construction project Dan and I did, we ended up finding, we had an end buyer. Our agent got us an end buyer and
08:40
We had left. So you pre-sold it? We pre-sold or we were under agreement during construction and we did something very similar where we let them pick all the fixtures out. Sure. But we did run into a lot of issues, whether it was with timing or with, you know, allocated budget amounts and tracking variances to that budget. There was no fee uh per se because it was still kind of a spec build, but client management or buyer management was tough. And so I'm sure you've come a long way figuring that out. Yeah.
09:09
Are you only doing third party GC work for builders and developers? You're not doing third party GC work for end users, are you? So we're doing both. We're doing CM work for developers, but we're also doing custom home building. And I think we'll probably do a little bit of both still. um I like the custom home building more for
09:40
the love of building and how beautiful the homes are. building for a developer is kind of nice because it's basically like we're building our building. They give us the plans, the design package, and we just go. There's a lot less back and forth during the project. Nice. I'll challenge one kind of a notion there is that like client driven changes are a change to the fee.
10:09
But market driven changes are not. It's like, there's such a blurry line. unless you are pricing, if you price the job plans and specs, then when a client says they're picking the sub zero appliance instead of what was shown, I mean, isn't that a client driven change? um You know what I mean? Yeah. If that appliance selection involves other changes, like do we need to rework plumbing uh or electrical because of it? For example,
10:39
the home we're building in Westwood, the client has a, m I can never pronounce it. Miele, coffee maker, uh which had to be, you know, if that was added after the fact, that would have definitely been a client driven change order that would have been marked up. All right. Cause that would impact the whole cabinet. Was it built in? It's built in, cabinet layout, electrical, plumbing. you handling, uh
11:08
I guess, initial budgeting with some of these projects because Ray and I have talked about doing some third party GC work as well. And my thought process was it's great, but I don't wanna go out to my subs all of the time asking them to bid stuff and then half of the stuff falls, you know, falls through. the yeah. And we don't end up moving forward with the project.
11:37
Are you assigning an initial budget in-house? And then if you decide to move forward, then you're going out to your subs for actual bids or how is that process handled? Yeah, so it is an interesting process. I just don't want to piss off subs. Well, you think about- Plus the game. When you're doing your own projects, you really don't bid everything, right? You oftentimes have the guys you know you want to work with or certain um trades. ah But with a client, kind of
12:07
have a duty to look out for their interest, right? We've made it very clear to the clients that we are in control of selection. And we work with the guys that we want to work with. one, sub-selection. Yes. So sub-selection. Yep. ah But the process starts with an initial estimate based on the information we have. We build that. We review that. We review that with them. If we're moving forward, then we go get some initial
12:37
bids, budget prices. tell the subs like, this is not a hard bid. I don't expect you to live up to this to the dollar, but something in the ballpark, guys that I can rely on, guys or girls that I can rely on to give me a. Yeah. Price per foot, price per fixture, price per whatever. And we, we use that to build the initial estimate. Once we've begun decided we're moving forward, we then send out bid requests ah with once we have a full pet.
13:06
package, the plans, the design package, we will not work without a designer anymore. So your client has signed on at this point, right? I this is, this is important. Um, it's a big deal because we've gotten into, it's, it's made the relationship with the client very strained with when we don't have a designer, because even if I provide them with the template to use, it never really gets fully filled out and selections are missed and things.
13:35
And then we're having conversations about why we're over budget. see this all the time, especially with even like owner driven changes for a spec condo. It's like, there are so many downstream, just cause you picked this tile. Have you thought about how that tile is going to terminate? Is it a bull nose? It is sleuters strip. What's the grout color going to be? Do you still want the drain there? Is the drain now a different color? Like you can just go on and on. Oh, you could go for a toilet selection. Yeah.
14:03
Is the rough the same role? don't want to find out that they want a skirted toilet when you're ready to install the toilet. Um, because it's not going to work. We're going to have to, mean, especially like if you're on a slab on grid, um, or in a basement, um, it doesn't work. You need to know that I needed to know that four months ago. So why doesn't a skirted toilet work on slab on grade? No, if we've already roughed the, oh, if we've already roughed the toilet. Um, so we.
14:32
We need to know what we're using ahead of time so we rough appropriately. So if we've already finished the floor and we can't... Or you can just have the toilet float in the middle of the room. Just get an offsetting flange. Just like a foot off the wall. Just offset the flange, no problem. Dude, my condo in Florida. The guest bathroom, the toilet must have been...
14:55
eight and a half, nine inches off the wall. It was so, was like, so, yeah, the strangest thing. I was like, I'm going to fix this. And I like took the toilet off. It was a cast iron stack. There was like, the only way to cut it was from the inside of the pipe. Um, it was one of these moments where like I rolled up my sleeves and like got
15:15
Halfway into the project, was like, I need a throne. This is not, this is not. Or just build a knee wall with like a shelf. right. uh What did you do? What did I do? Oh, we used an offset flange. We cut it and then we got a, uh a Kohler with a 12 inch rough, I think. Okay. So, uh, it was one of these toilets that's like meant to the, the
15:41
the sewer stack in it, the rough is further towards the front. So the thing favors the wall more. So it hugged the wall. Yeah. It's still five inches. it's not, it's really hard to make room back on those things. Yeah. should just sound like you a two by four wall still. All right. Getting back on track. So, so you require and mandate interior designer. Yeah. So if the client doesn't already have a designer on board,
16:11
we'll provide a couple options and we'll let them interview the designer and decide who they want to work with. If it's a really small job, we might just... Even with developers. Yes. But we haven't encountered that yet. The developers typically already have a... Probably they do become the designer. And it's not your job. They say, I don't like that. It's like, aren't we going to go... Exactly. Well, I also feel that it's not always, but sometimes having a middle man or middle person
16:40
between you and the client that dictates or guides them in a certain direction is much better. Right, there's no conflicts of interest if you will, like, I want you to choose this because it's easier for me to install versus it looking good or a style that matches what you're going for. And there's, I mean, there's give and take, like if designers spec something, you're like, oh, I really don't want to do that. uh But, ah or, you know, you just know it's not going to work uh or.
17:08
it's going to be extremely expensive. Maybe we should consider pivoting. But overall, I think you get a better product and a lot less headaches when you have a designer who thoughtfully specs the finishes and guides the client based, know, client can tell the designer what they want, but they need help because they don't really know what they're looking at generally. It's an art form to say no in a way that ah is sensitive to the whole team because, know,
17:37
You can get run over and if your Spidey sense says don't install that product in that way, it's going to leak. It's going to be terribly complicated. My guys don't have experience with that. Like that should be the answer to end of full stop. Unless they want to bring someone in or pay more like, cause at the end of the day, you have to stand behind that work. Right. Yeah. I agree. It's also another thing where it's having someone put together.
18:02
bathroom elevations, if you're doing like built-in, like all the elevations are done, you can just give it to your subs, they know exactly where stuff needs to be mounted, you can block walls for certain things if you wanna install bathroom hardware, things like that. It makes a world of a difference if you have those types Such a value add-in allows us to move a lot faster and have less mistakes when.
18:26
The math has been thought through on the tile layout. How's the tile going to line up with the shower valve? ah We just post it. We review it with the installers. like to your point, the framers nowhere to block, plumbers nowhere to rough. They don't have to call me to ask me what height I want the slide bar at or whatever. Everything is already thought through and we post it. They build it as it's supposed to be. check it.
18:53
And then same goes for tile. The tile has come in and I think bathrooms is a big, it's a prime example of why we need the designers. Even reflective ceiling plans and things like that. Where are all the light fixtures going? Just give it to your electrician. They know exactly where to run things. You don't have to spend half a day with them being like, oh, well, I think I want to tweak that recess light and move it like three inches that way. As the projects get more complicated, we've all built a basic condo with basic recess lighting and
19:22
but you start adding in speakers, recessed heaters in the ceilings. LEDs. Yep. You need to think through where it's going to be placed. Obviously you can do it on site and know, VIF, but it adds time and generally mistakes. You know, if you're doing a single family, that's one thing, it's still a pain in the butt, but when you're trying to build multifamily, these types of one-offs are killing. Yeah. know, little changes that just.
19:52
they'll destroy your schedule. The bigger projects have bigger teams anyway and installing in the field, they expect this level of detail because they don't want to be running into the trailer, you know, every half hour, hey, come show me where you want this one to be. I forgot what height you said. Just put it on paper. I'll give you a real example of a time recently that I didn't like stand my ground as far as a change that I thought was a bad idea. know, buyer wanted a different tile.
20:19
And specifically it was like a large format porcelain. I'm talking like 90 pounds per tile, 60 inch by 40 inch format. It's really beautiful in the end. But they had, also wanted a towel warmer and ultimately the towel warmer was in conflict with the door. And it was a good example of where also I had them show me exactly where they wanted the towel warmer. So I installed the per their spec, but in the end they wanted the thing moved cause the door couldn't swing fully.
20:47
And so we're chipping out gigantic tiles and follow the end of the story sucks. The installer was taking the 90 pound tile down the hallway and he damaged a number of pieces of herringbone floor. And it's like, now I pay for that. Like, God damn it. Yes. It's just a collateral damage of doing things that are just like very complicated in a multifamily environment where guys aren't. I'll set up. I'll give you a similar example in Lynn on the ground floor.
21:17
We want, and I wanted to do brick because we said it's much more resilient. exterior. On the exterior for the cladding. We wanted to do first floor brick. More resilient, holds up to people, elements, et cetera. Very transient location. Right downtown, architect argued tooth and nail that they wanted us to keep the fiber cement paneling.
21:45
and ACM paneling that they spec'd. And we were okay with the ACM, we just wanted brick on. Fast forward, building's been open 18, 24 months, what do you think has happened? All these panels are getting damaged, people are bumping into them, people are punching them, they're getting cracked all over the place. And we wanted to do brick, and we were basically convinced otherwise. I feel like we were stonewalled, I don't wanna...
22:12
put it on the record. I don't believe that the weight of the brick was creating some kind of structural problem. We do brick veneer and he was telling us that it was structurally Structurally, couldn't support it. mean, they're in a brick shelf off the foundation. Right. Talking about the first eight feet. And majority. wood framing it from the wood frame. And also, all the majority of the weight of the building was carried through the steel structure which had its own footing. So we just felt like we weren't heard in that scenario and...
22:39
Now it's come full circle. And guess who's paying for it it's costing you money. Right, right. Yeah, And it's just frustrating because now, you know, I was really excited when, this is a major tangent, I was very excited when Google Maps Street View updated, for the longest time, people were like, oh, where's your building? And they go see the old bank that was there. Like, oh, our building's finally gonna be there. Of course they drive by, there's like four different punch spots. So I'm submitting these like map updates, like, can you blur this section? I've had some privacy concerns in this one area of the building.
23:09
And I think they did some junkie shooting up. It's very frustrating. All right. So the GC world ah is an interesting new part of your business and you've got staff now too. That's always one of those inflection Like full time. Yeah. Yes. Yeah. We got two guys. started, ah we brought one guy on full time um last March. We had dabbled with a couple of guys before that that didn't work out.
23:39
Um, and it was a challenge to find the right guy. When we finally really put some effort into finding, um, a full time site super, um, we got some great candidates. We met a lot of great people. Um, that was the higher for super. Yes. what was that? Be specific. Like, what was that process specifically? Like you said, the initial didn't work. Was it just kind of, Hey, who in their network knows somebody in our network, um, that weren't a great fit or maybe.
24:08
Um, we weren't a great fit for them. Um, ultimately we, realized that we needed to be more intentional about finding the right person. Um, so we did just put it, really just put it out to our network that we were hiring. I think I posted on Instagram and I got a bunch of feedback. Um, and we interviewed quite a few guys. Um, and ultimately one, two guys really stuck out to me. Um, but one guy in particular.
24:35
who we ended up hiring last March. ah He'll have been with us for about a year now, ah this month. ah He came from a survey background. So right away I saw like a huge bonus there, because I'm like, we can do our own construction layout in-house. we had a few conversations with him. He hadn't worked for a construction company before. He had only been doing survey work.
25:03
But he loves construction and home building. Like he built his own house. He's like a building science nerd. He loves it. So we were excited to bring him on. He came on board and there were things he had to learn to get up to speed, but he knew a lot. It was really helpful. He's been great. So right away, it allowed us to kind of scale a bit. I didn't have to be everywhere.
25:30
to entice Sean, we allowed him to essentially subcontract to us for the survey work. So it's not, while he's on an hourly rate for site super work for us, um we pay him separately for the survey work. Oh, okay. What was his motivation for coming over and switching gears on his end? He was done with the survey world. He had had it. He was just bored and- Day in and day out finding data points and-
25:59
And he wanted to get into this. He was looking for a way to break into this. Um, and I think he needed the right fit and, um, it just worked out. then do we want to talk property management? Oh, because you know, there's all these different verticals. This was kind of like the focus of our episode last week is the idea that like, you know, real estate development, the cash flows are up and down and up and down. And it's nice to have something to balance out those, uh, humps and valleys. Um,
26:27
And so general contracting, like. Peaks and valleys. Yeah. Humps and valleys. mean, yeah, humps. mean, it's like a. It peaks and valleys. Yeah. How about the same thing? Humps. Yeah, some people say humps. It's actually the French. On Wednesday. Interpretation. On Wednesday they say. Yeah. They say a lot. That's right. Anyway, so you did property management for a little while. were our property manager. in-house. You guys did a good job, but you just.
26:52
divested. started with the idea originally when it was still just Brian and myself. It started with the idea that why are we, we were building a lot of condos, all condos. Why are we sending all the property management out? Like why not keep it in play in house? It's not a moneymaker, but it at the time was just, it was bringing in some money. was paying for our insurance, for our cell phones, things like that. ah
27:22
And then it started to grow and it got to a point where we couldn't really just handle it ourselves anymore. It was taking up too much of our time. So we felt like we needed to hire somebody. And we did. And at that point, the revenue was just enough to pay that person. And then we were still involved too much. And we were like, this is not going anywhere. We're not making any money. was taking up weight. were providing way above and beyond the service that most companies do.
27:51
And it was taking up way too much of Brian's time. For a company that makes no money, Brian was spending probably 80 % of his time on property management and 20 % on the real moneymaker, which is development and construction. ah It just didn't make sense. And we just kept kicking the can down the road for a couple of years. And were you only taking on... ah
28:15
buildings that you built and turned over or were you... It started off that way and then people started coming to us, do you want to manage our building? And we took them on, we took on Mark's building um and it just got to a point where Brian I... That's an easy one because it's just so well built. That's true, although we've had a lot of warranty calls. Yeah, I know. The most Mickey Mouse. That is the buyer's not... Not Mark. uh
28:44
And I've learned from property management how brutal, it's not just me, it actually made me feel better about myself how crazy the buyers can be um in these condo buyers in particular. And not everything, but we hear- then you walk into it, yeah, I mean, don't know if you get into that level of detail where we were pre-closing one time and they want paint touch-up, right? And normally you blue tape the wall. Sure. This was like the Smurfs came through and the heads exploded.
29:13
repaint the whole wall. Or they want you to repaint after they moved in. Yeah. All my movers didn't nick this. Well, sometimes we'll, depending on the project, but we'll negotiate with our painter and ask him and be like, hey, as part of your bid, once all of the units turn over or when everyone moves in, can you come back and do any touch-ups with- I was just having a conversation with somebody about this and they told me that-
29:42
That's their policy now. Do this at the end of my warranty period. they just do. Oh, at end of the warranty. One There's still gonna be settlement. There's gonna be plaster cracks. fair. It's like, whatever you damage, whatever you scuff. We're just gonna paint it. Yeah. Maybe it was you. And they know that during the blue tape walkthrough, so it takes some of the pressure off to get every last thing before Mark leaves the room forever. That's true. relax. So, is an hour's worth of It makes a big difference, sorry to cut you off. No. When furniture is in the place and there's paintings on the wall and things like that, people look
30:11
past a lot of imperfections. Is that a blank check that we're gonna paint the whole place? No, it's blue tape. I mean, put a blue tape reasonably. And also everybody needs to open their front door in the same day. I'm not sending the painter on Tuesday for you and Thursday for Adam. It's a courtesy. if you're one of these people who has to be home when the painter is there, you don't work from home or you're not gonna get the service. And I'm not.
30:34
So I'm also fairly strict about that. We definitely talked about That bothers me so much. Yeah, we definitely spoke about this, I forget when, but you basically, it's a good practice, right? Your one year warranty period, send me a list of things that could be an issue. It's just cosmetic And just work through it. Yeah, I'm not inviting it. No, you know what I mean. Like, I'm not gonna abandon you, we're gonna check in once. And no, you say that?
31:02
Whatever my painters can touch up. paints, the paint ray, other things. Yeah, not other things. I feel similarly though that if I'm gonna send the painter there to fix like cracks over the door, um settling cracks, all right, yeah, he can touch up that and the other thing too, why not? He's gonna have the paint open anyway. The paint, yeah, but I'm not gonna bring my tile guy back to like touch up grout and like, no, I'm not doing that type of stuff. This is like high level stuff like.
31:29
If there is a list of questions or things, you can have them kind of sent to us towards the end of the one year period. And then we kind of go through it and say, yeah, this is covered. This is not. Just talking about buyers being reasonable or slightly crazy. I have this idea and I don't know how to do it yet, but I want to learn. I want to be able to look up your Google reviews, all of the ones that you've left. can't do this unless you find one they already left.
31:54
Click on it and then it'll bring you through everything they've reviewed Yeah, but I think a major red flag for a buyer would be just like tons of negative Google reviews, you know The Montreal sticks took too long and you went nuts. It's like right red flag Don't I don't know what FHA says about not selling homes. I you fire their email or Google account and asked
32:17
I'm mad. do it. Trust me, I have. guarantee you. Yeah. Oh, well, if anyone out there knows how to do that, I'd love to chat. The worst offenders are when someone goes to a restaurant, you're looking at Yelp reviews, and someone goes to restaurant and gives them a one star, and the review is like, the service was exceptional, the food was unbelievable, but they were super busy on a Saturday night, I had to wait 45 minutes for a table. I was like, what? And they're reservation only, and they squeeze you in. Yeah. And I'm good with a three star, even a two star.
32:45
Shit happens if it's written in such a way that's like, maybe you own some of it. like, you acknowledge like, hey, I get that. Like the industry is difficult at this time and they were understaffed and they were trying. But even despite that, my food took two hours. Like, you have a gripe. Yeah. It's legit. But it's different when people are like, nah, you know. There are people that just are going to complain. Yeah. You're not going to please everyone. No. And there's always the people that will have, will basically.
33:13
Create a list and add to the list over the course of the year. And then two weeks before your warranty period is up, you'll get an email with a list of three pages of I don't agree to hold backs. We... that's just become like a never-ending thing. It's like a hold back was for specifically the crack, you know, the dent on the cough cable. Correct. And then all of sudden it's like, and also the ask to end that, you're not getting that money back. And it's like, okay, from now on, we just don't close. I'm fine. Your movers are scheduled for tomorrow.
33:42
That sucks. We're not closing. If we can close, I will fix the coffee table. Yeah. Fair. No, agreed. We've had a buyer who just kept adding to his list of holdback items. And after the closing, and uh he claimed that his attorney told him to do that. That's just abuse. And we never got, we just got fed up and we just said, you know what, keep the money. Forget it. Yeah. We're done. Also, I'm done mortgaging your I'm not giving you, yeah, that's what I said. I'm not fixing anything else. Forget it. I'm done.
34:12
That's the road they path, that's the path they chose. Exactly. And I had the conversation with him and he said, okay. And that was it. He's going to need you for something someday. And he's going to really regret that. Yeah. Apartment management's a grind. Yeah. So we realized it was worse on our own buildings than others, obviously, because now you're locked in and they think like they have this constant open line for you to fix whatever they want. the...
34:38
But you charge them a fee for that? blurred. Well, it becomes very blurry. What's in in scope, what's out of scope. think we used to be way too nice too. We would just feel bad charging for it. Well, it's tough, right? Because they just paid off a huge chunk of your debt, or that was the last unit that made the nut. You don't want to disappoint a customer. There's that aspect to it. 100 % agree with that.
35:07
a state of mind, but you again, you don't want to be feeling taken advantage of or like, Hey, I need help with this battery in my smoke detector. Like, yeah, dude, get a ladder figured out. That's ultimately what happens. You end up presenting the people because I think they do not everybody does this, but people will take advantage and you let them take advantage and then it ends badly. I can see where it's also awkward where you are the builder.
35:31
Yep. developer. now you're also taking over the property management. So it's like you've never left. It's like you can't walk away. It's almost like you're not going to stand behind your product and fix it. And you're like, well, you've lived here for a year. uh Everybody's house gets dinged up. It's similar to being a design build contractor where you own the design and the construction. Like any change order, the client's just staring at you like bug-eyed. uh
35:59
Well, why did the door come a different size from the drawings? It's like, didn't promise perfection. That's not the standard. That's not a reasonable standard. So what contingency is for? But anyway, that's fair.
36:13
What's an upbeat topic that we can finish on as it relates to central property management? Tell us about something coming up that you're pumped Well, also, so you just basically sold your property. So there wasn't anything to sell per se. So what we did was we referred all of the contracts away to a, we interviewed like four property management companies, right? And Brian and I, the big thing was we didn't want to leave these, we were really worried about leaving these people high and dry.
36:40
Most of the three units, four units should be able to manage themselves, honestly, but a lot of them didn't want to. So we didn't want to leave anybody high and dry. And we wanted to make sure that they were actually in good hands and not just another property on somebody's list that gets ignored. And we found a company that we felt was the best fit. So we referred those contracts and we handled the transition and that company will pay us a ah
37:10
Referral fee. Oh, nice one-time for each contract that actually stays with them. Yes, was actually gonna say let's talk money real quick Like what's the cost usually just to manage the basics of the HOA? Obviously it doesn't have to do with any expenses is just it's like right for the wall a bit but generally rule of thumb about $60 a door Per month, it's not bad. That's so low. That's I know so I had a thinking a hundred. mean Dan and I we
37:38
have our own property management in-house and we're about 75, but that's because we've got the good product. funny money, we're paying our own. It's a numbers game. mean, these companies that do it full-time, manage a lot of units. We built it up to about 100 units and we were like, we gotta get out of this. All right, well, back to what? Tell us something you're excited about. What's good at Yeah, what's good for 26. So we got a project in LeMonsster, rental project that we're really excited about. It's a big one.
38:06
It's two buildings on one property. We finished building two and stabilized that, um, back in the summer. Uh, we finally got up and running on construction on building one. Uh, we should have that finished and stabilized by September total 15. It's an eight and a seven. Nice. You know that that lemonster building came through me initially. I did it. Rick. Uh, someone I knew from like growing up.
38:34
You put him in touch with was like, I'm involved in this project and we're not gonna, we're looking to sell the deal and it's in LeMonster. And I was like, I don't know anyone who does work in LeMonster. Texted, was Ricky at the time. I was like, who, who knows LeMonster? He was like, Ben Kovacs. Yep. Cause Benny lived in- That's funny. Yeah. Well, Benny grew up in Bolton. Oh, okay. So right next door. Yeah. And Benny called us and we used to have a property in Gardner years ago. So we knew the area kind of.
39:03
And the numbers were just great on the deal. Definitely underestimated the level of work needed. And I think those guys that owned it before us, way underestimated the level of work needed. But they're not, are they existing buildings? They were two existing commercial buildings, old, old buildings. At one time it was some type of manufacturing facility that was tied together with a catwalk. Oh, wow. Catwalk has since been disabled. Before we got there, was demoed.
39:32
The buildings were in rough shape, very rough shape. commercial or residential now? All residential. So it was like office, well, or industrial. like residential conversion. It had been through multiple phases. At one time it was one manufacturing facility, then it was cut up into like different, there was like a dance studio and there was like a construction company in the basement of one of the buildings and.
39:52
There were two apartments on the top floor of one building. laundry mat with automotive oil change. Everything's fine. This property is the city's nightmare. And everybody at the building department knows about this property. they're very excited. are happy that we're doing what we're doing. Nice. It'll be beautiful property. We thought we had some more value add on the property, but the new floodplain that FEMA just rolled out kind of
40:21
that plan. So we'll see, we're gonna, in 2026, 2027, we'll see if we can squeeze anything else out of that property, but at least right now, 15 units, once it's fully stabilized, it's gonna be a great property. Are you focusing more, well, obviously the third party GC stuff, but internally, are you focusing on more for sale or more buy and hold or both? A mix, I think we'd like to have.
40:49
one buy and hold project a year, if we could, roughly, um continue to build our portfolio steadily. um And we'll still do spec builds and still do client work. um This is great. Trying to build like our own construction company so we don't have to sub things out. Shout out Centerline and Adam. If you guys want to follow Adam or his group Centerline on Instagram, what is your handle? uh At centerline underscore development.
41:18
There you go. Yeah, fantastic, Silders. Yeah, if anyone's interested in third-party GC work, definitely reach out. I think what's really nice about having a developer who's also a GC is the mindset that you bring with it. It's like, know, know where dollars are well spent and where it's just not, you're not adding value at that point. And you can guide the client in the right direction. testament to you guys. Thanks everyone for listening, rating, reviewing, subscribing, and watching.
41:47
See you on the next one. Later guys.