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Marc Savatsky, Ray Hurteau, and Dan Rubin open up and discuss their own deals, budgets, and mistakes every Tuesday.
Not guru content. The stuff that decides whether a project makes money: what a triple decker really costs to build now, the retroactive Newton tax bill that landed on unsuspecting condo buyers, the helical pile surprise that cut a deal's IRR from 70% to 40%, the eleven-week-old demo company doing $6K a week against a $20K burn. They read their own numbers on air, including the ugly ones.
A typical week is some mix of: a breakdown of one of their active projects (an 1874 adaptive reuse in Amesbury, a Dorchester three-family held fourteen years, a waste and demo business), a guest who does one thing extremely well which include zoning attorneys, architects, labor lawyers, energy consultants and brokers. Ray's Multifamily Minute on the news that actually moves the needle, and a round of Overrated / Underrated / Appropriately Rated.
Heavy on Greater Boston and New England, because real estate is hyperlocal and pretending otherwise is how people lose money. Useful anywhere the same problems show up: permitting, capital stacks, subs, tenants, and the gap between what the spreadsheet says and what the building does.
For investors, developers, GCs, agents, and anyone still holding a W-2 while they figure out deal one.
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
Welcome to the Real Estate Addicts podcast with your hosts, Marc Savatsky, Choose Boston. Ray Hurteau, RH Invest Group, Dan Rubin, RH Invest Group. And we're joined today by our guest. Nick Beaujean - Beau Development. Is that how you say your last name, Bojji? Bojji. Bojji. Bojji. Bojji. Okay, great. Excellent. You guys were asking how I met Nick when I said social media. So I think that's like one other benefit of Instagram, social media, LinkedIn, et cetera.
00:36
Like sure, uh, break for employee retention, recruitment, employees, credibility, like just like, can, I think that's how we back to boss. If I had to like say like, how did I meet Dan? It was either that or one of Ricky's networking events. Maybe I swept right on. Right. I don't know. I am pretty swankable. Do you live in the city? I live in Walton right now. Yeah. Yeah. Yeah. So we, uh, we live like five minutes from like one of our.
01:06
Uh, projects, is great. I just like, know, I love that Nick, um, much similar to Ricky. I like say you have like the animal spirit of an entrepreneur. Um, just kind of like starts new businesses and runs head first into walls and problems and solves them and just kind of figures it out as you go. I think that's a, a trade with an entrepreneur. do you agree? Oh, a hundred percent. mean, you gotta try a bunch of different stuff. Yeah. If you're not an entrepreneur then.
01:34
You're never going to know all the answers. If not trying succeeding, you're always tinkering. Yeah. So tell us about your journey here a little bit. Like, uh, you know, lots of zoning deals through the city of Boston past few years. How do you like start, how do you get into the real estate? Yeah. I mean, I think it's like pretty dynamic. think like you guys said, there's really been somebody who just wants to like keep trying things and like failing. And I've always found that it's never a bad thing and fail is having a bit of a great thing. So if you're like, what doesn't work? And.
02:04
I was at PWC Seaport right out of Valleys, like a lot of people with accounting degrees. And I saw how much money that CEOs of these Fortune 500 companies were putting into real estate to us. And so I kind of just like followed the breadcrumb trail and figured out that they were putting the money in big multifamily developments and wanted to figure out what that was all about. And my first deal was a dealership to property in Lordchester for 50 grand.
02:31
No attorneys, no due diligence, like no nothing. Like, let's take a hard money loan at 13 % and let's do it. And, yeah. And then just kind of figured it out. Um, and so that was, that was cutting my teeth with my first deal and figuring out like what's the zone of order appeals is about. Like how to change uses. Like, and that just became a huge unlock of. you get the deed restriction removed? Yeah, we did. Yeah. We found a title defect. Like.
03:00
three years later. so we basically made it, we were arguing that the title was not employed and therefore the de-districtions don't make sense. Yeah. Good job. Did I knew? It wasn't me. I'm not missing any credits in that. It took three years. had the zoning board of appeals approval and I saw if it was representing side, no money. was like 200 grand student loan debt. And that took like 18 months. And then when I to get the building permit, they said, by the way, there's
03:29
Like you can't build years on building a lot. Like there's a deed restriction. only build a shed. It's like, what about this CBA? It doesn't matter. Like, oh, deed restrictions, it's their seats. so, yeah. just for our listeners who may not be familiar, lots of delinquent lots, uh, from dating back to the 1970s, which was kind of like overgrown, uh, were souls.
03:53
as part of central Graham to the yard sale. And so your neighbor could purchase the lot next to it for a dollar with the caveat that a deed restriction is applied to prevent any meaning, any real development on that portion. Yeah. Yeah. So it was, it, that's exactly what it was. It was one of those lots. They bought it for a dollar. So that's another guy for a thousand dollars. The other game, but, and. Thought the deed restriction must have been rebuilt. So you carried a $50,000 note for three years. Okay.
04:23
I would like to say that interest rates were zero back then, but not for our money. Interesting. So you did this about what? 20 more times? Well, then what do you end up getting built there? What do you put there? So we actually got like two, two townhomes. One was like 3000 square feet. Nick's a real butt to a partner, so I've been going to Eddie's lunch net and don't answer me. We've been for the past two years.
04:50
And there's a site next door and that's just in kind of like the hole in the ground with a fence and a pretty rendering a zip tie to it. And, uh, and he would always come out and what's going on next door? He's ah, these people. Kind of diagonal you have across next to the hardware store. She'd come through the village. There is a restaurant on the corner and a dug in and then come down the village, he's hardware and across the street. Oh, but they're building something.
05:19
Oh, that's nice. Enter Nick. Tell us about this process. So I, a relative descendants and it was like listed for like $3 million and it was an interim project, 10 units, but at two levels of underground port, which is what killed the deal. Also the lobby was like a free story lobby. Like you would see on like 50 seats. Some architect could just edit devolving. Yeah. No, was actually the owner.
05:46
Oh, yeah. It was the owner. wanted like, it was just like his baby. inherited it. that people like to hurt themselves. Love self-inflicted. Yeah. Yeah. That sounds often. Yeah. But did you have to, did you re-entitle it? Yeah. We went back to the zoning board, trying to partner with them. I gave them some equity with the seller. Yeah. For a guaranteed price of way less than what they were asking for 15 % upside. And we took it back through and got rid of all the underground parking on grade.
06:17
And um, got rid of the three story lobby and got like two, one beds converted into two beds out of it. It was recaptured all that space. Nice. It's a much bigger lock than I thought. live in the, so I drive by it all the time and like, I didn't realize that it was like almost an L shake lock. So when I drove by it the other day, I was like, Oh, Holy shit. It's a lot bigger than I thought it was going to be. Yeah. Yeah. When you look down the driveway, you can really see like there's three units.
06:46
Back there. tuck parking kind of like on the underneath. Nice. Yeah. You talk about the carport thing. Oh my God. was interesting. Yeah. Listen to this. So this project, I mean, this project was banned in front of the union planning board, like for seven years. Like they had three different variations of it approved. And the commissioner now was actually a plans examiner way back when in the first variations. And he had approved it as a, uh, uh,
07:16
open carport when we submitted it back through after we got the approval, after everyone was on the same page, they took a stance. was an open parking garage. It was over a thousand square feet. And the definition in the state building code of a carport and open parking garage, almost a down. what's the implication again? It's a cost. Yeah. So the implications you have to go for a different type of fire. Right. And so it basically triggers having all structural steel.
07:46
concrete slab, full podium, full dance floor. Um, for the people who say, don't know, like most times you'd have like steel for columns and then L and V L E W P cross choices all the way out of wood, way cheaper. This is all steel. So wooden frames. Yeah. Yeah. Full board. True podium. True podium. Full podium. one. Yeah. 200,000 pounds of steel. Uh, so yeah, the steel costs went from 140,000 to three full.
08:14
That based on that decision based on that $200,000. Yeah. That number can just swing so wildly. Yeah. Yeah. And so many of these, these provisions are open to interpretation. Yeah. It's like, it is a lot of greater. Yeah. feel, yeah. And the problem is like, if you go, like you can appeal it and take it to the state, but that's time, money, carry. And with these provisions.
08:41
Cause it's open to interpretation. This is now a life safety issue and whatever it's around life safety is the fire down thing. You're never going to miss. So I've been to the state for variances in front of the, uh, what do they call it? Regardless. Um, they have the town will come and testify. like you're going to argue your case and then the commissioner or the plans examiner from the town is going to stay there.
09:09
Good luck. Yeah, generally. Sometimes there is a provision where the lots of semaphene from the local news. So have to cite before this. I personally don't feel that it's a, it's a challenge, but by the book and letter of the law and though they'll kind of twist their, um, depth, their, their words in front of the board to suit that. you can, you can get through it. But, if, if you have opposition from the town, yeah, by the way, we had like, we had two.
09:39
very reputable code consultants in our corner agreeing with us that did full write-ups. And we tried to use that to overturn the plan's examineries decision, but ultimately like you're just, you're going to lose. Something, anything life-saving that you're going to lose. A hundred percent. Are you self-performing that part? Yeah. Okay. Yeah. We self-perform onto foundations after that. Interestingly in the city of Boston, the zoning board of appeals can actually also grant those encoded.
10:09
Can they? Yeah, they can. So very common one that they give out is having to do with access hatches for roof decks versus head houses. Because if you're over three stories, a hatch is actually like, according to some plans, there's a building code violation. But if you're on a historic building and they don't want the head hatch because of storics, but it's also, it's this catch 22. So when you seek your release from the roof deck, you ask for that building code very violation.
10:38
Yeah. Yeah. Well, it's pretty Boston's only worth a lot more power than most other zoning boards. We had, it's completely different than every other. Yeah. it's its own enabling act. So yeah, we had, we had a few folks that talked me to us about that. But walk us through just, okay. So you started your first $150,000 a lot. Okay. That went very well.
11:04
You've done, you did 20 more deals. were taxed. And then since you jumped ship and went full time. Yeah. That's a lot of deals. Well, so a lot of them are like, are it flips? Like only just would go to the ZBA. So we would, we, I basically looked at it like an options contract, right? I would get the land contingent on a zoning board of appeals approval closed 45 days after the end of the expiration. And then as soon as I got to the ZBA, I'm talking to realtors.
11:31
Moving in group and off market Facebook groups, whatever. Hey, I got three units approved here. Who wants to buy the approval? I like, I would just double close all the time. So the buyer wiring the money or like there was some weird issues. had a wire and money and it would close and then go to the seller. Same on the same day. So you're just flipping the paper. I was flipping all the paper of these items. Nice. Yeah. You your cowboy boots today? A little bit. This guy, Wild West.
11:59
So you did a lot of, a lot of those. then when, like, when did you do your first actual. So we did, we did a couple of these and I, actually partnered with the GC to build some of them. Okay. And the whole deal was like, I'll pay for all of the risks of entitling it down payment to buy it and need to flip to construction loans. They built it costs, which quickly just eroded completely into on-charge a new full freight or the normal GC would.
12:29
Because this is my GC company and not, not taking everything. So they didn't get any equity. No, they, had 50 % of it. was like partnership. Yeah. I'm at cost there at cost, but what they would do is they would just start billing me like they would normally bill a cost plus contracts. And so needless to say, like ended up in court. And that was after that experience, then again, no GC safe thing happened. Didn't learn my lesson.
12:57
Well, what, what was the, what was the fifth owner? it like a, week contract or just state went rogue and they were just, know, in you on change orders and all that stuff. Yeah. So, so it's like, when, when you agree to something that costs for somebody, that means like, if I pay somebody $20, I'm going to charge you $20. Right. Right. So he, he would pay somebody $20 and then charge me $24. Right. He's trying to make his 20 % fee.
13:27
on everything like you normally would even though there was nothing in writing this to initiate that. Plus the upside. I was going to say, did you, did you consider at one point maybe switching to the cost plus model and then decreasing the equity to sort of keep. So either salined or how did you manage that? Yeah, it's a great question. Um, I think it's really hard as a developer now, I mean, like what to do with GC's. I think you have to do either one of two things. If you didn't need to hire a GC, have a really good contract with that GC.
13:57
which comes from experience, right? And in having me at this time, went from flipping paperwork to decide like, should try building these things. Or you need to do it yourself. And there's just way too much money involved to give people total trust and control. Like you have to retain that as the developer who's you're going to go for. I might take the other side. Like I wouldn't say that cost plus as a contract delivery method is either the best way to deliver a project or the worst.
14:25
And if there is a hundred percent trust, you know, then it's just an open checkbook and someone could take circle, take advantage of you. But like really, if you've aligned interests and you have a really good relationship and either trust and you're both pulling on the same end of the rope, that probably is the cheapest, fastest, least friction way to deliver a project. It's just agree on a fee. That's what you're going to make to build the thing. The rest of it is literally at cost and we'll both find out how much this job is going to make together in real time.
14:55
Right. You know, I'll give feedback on budgets and where I think it's going, but like ultimately it's going to cost what it's going to cost. mean, GCEs never, I mean, maybe it's more common than I thought, but GCEs typically never have the opportunity to actually participate in the upside. And so that's why they're more incentivized to submit some change orders or, know, not be unethical, but you know, this is the money I'm making on the job, especially if things start to go sideways. So you'd wonder why one would go that route.
15:25
when they are participating in the upside, unless they thought or the of the partnership. I think that was for me in particular that I think that was a big part of the problem. I've partnered with GCs on big projects where they're also the equity stock and my general, are two separate things. They're, GC, but they're also LP or GP. They're GCs and their equity partners in the deal. Right. The problem is
15:52
that frequently they can just, wear a hat that has two sides and they just, when it's convenient and then fruitful for them, they turn up on ways to GC and then when it's not, they flip back the other ones out. I'm just motor, you know, so it's talking about sizes. Yeah. So it's like you run into a delay because utilities didn't come through on time and he now has extended general condition to us. It's like, Oh, well, here's a change order to this development team for my staff costs for.
16:20
unforced delay. And it's like, dude, you're, you're equity part right here. Yeah. I'm not, I'm the GC today. Yeah, that's, can be tricky. Now do they participate? God forbid there's downsides. They participate in the downside. Let the project doesn't go as expected. I yeah, that can be as an equity partner, as a, as a JV deal, in those specific instances, if there are some reason they accept that risk too, like I could be making money on the cost plus side, but you give it it all up. If I don't believe in the
16:49
deal itself or it doesn't perform the same way. totally. mean, I, I've just found for me personally, I think the cost plus contract ecosystem is actually a really interesting place. And we could like really deep dive on that because a lot of clients want cost plus contracts with a GMV attached to them. And so it's like, you want it to be cost plus, but you're still going to give me a high wonder mark that we can't ever go over. So is it like really a cost plus contract or.
17:16
is a GMT contract and gets into like a really weird gray area of like, how do you make the client happy and have this be a fair deal for both sides? So I think that's an interesting thing that we do at Whole Grab. But when it comes to like downside risks with partnering on deals with GCs, I just think for me personally, now that I'm at my career, I think it's too best. I think it's too best because you don't have control over their costs. So.
17:43
Why partner with somebody that you don't have control over their costs? I want that control to make sure that the deal goes the way it needs to financially and on time. Yeah. I mean, the flip side I'm saying though, is like, if you don't have that experience to build yourself, then then kind of your stuff, right? And you have to find me to go on GC to deliver you or you partner with somebody. Yeah. Order the pipeline for the next team. Like, you know,
18:11
You get it, you get it entitled, you get it ready to go. Then they build it. Then you're off looking for the next one and you know, rinse it with tea. It's a pretty fairly common story amongst developers is like, you know, got into a dispute with my GC. Uh, he basically took off his pouch, dropped it on the ground and walked out of the job and I had to figure it out or the back roads, know, Jersey and we had on that's how you learn to, you know. It's a very rare that you get a really good. I really have only seen work like.
18:42
I could count on one hand how many times that like GC developer relationship has worked out well. It's just, it's a very rare, it's, it's hard. think, I think all of us sitting here, like want to say like, it's totally possible and it's like it can exist and everybody could win, but that's because everybody sitting here has already gotten their teeth done, has been burned. It's probably been a court once or twice and like we are.
19:12
probably all trustworthy people who work with other trustworthy people. There's a huge interest in real estate, of people that you can trust. that's the real. Well, I also feel that all four of us, like we all self-perform all our projects. Right. Like a lot of developers don't do that. There's, there's a project sales where it makes sense. And we have to hire, no, our lenders are not going to give you money to sell a conformity project. Cause it, there, that's too much risk for them. need somebody to backstop the price.
19:41
Yeah. Secondly, um, you know, you have to be a sophisticated consumer of construction. This is like, um, I don't know, I'm going to buy a car now. I have like consulting people that I talked to like that. I don't just walk in the dealership. So you have to know what you're dealing with. And if you don't, should have a lab owners will have put in. That's fair. That's fair. Um, consultants are good. And that's kind what we did in lineage. We got somebody that was sort of our owners rep and project manager. don't know. Yeah.
20:11
It was even keel made the blender feel good about us subbing things out and building it on our own. Uh, think anything larger than that building though, there's no way. Right. Yeah. Something when you're, yeah, it's not the one you have to go. So is this the biggest you've done? Yeah. How many units? Yeah. Oh, 10 plus commercial. 10. Yeah. And you're selling them or renting them. So it's kind of, let me ask you guys a question. I'm curious to hear your thoughts on this. needs to be a good little segue here. Um,
20:40
What size and fraud gems do you think does it make sense to bring on construction consultants, look at cost plus GCs that have named brands? what, what monetary threshold do you guys think that enters? Because that has, there's, there's real cost associated with that. I'd say if I'm spit ball, I'm saying 10 million in that range. Maybe you can go 15. I don't know how big we'd be feel that comfortable going, uh, or be allowed to go.
21:09
But don't think we want to go much bigger than what we did in Lynn. mean, so you can staff up, right? Like you can hire a superintendent. Well, that's what we were saying. Like we, you know, you just add, it's not full GC stuff. just add independent contract to the payroll essentially. Your project management budget goes up because you have people that are taking care of a lot of the day to day. The challenge is you'll, you will definitely have to overpay them. Okay. Cause they're mercenaries. They're just basically churning your flat for that 12 to 18 months.
21:37
And you're not even proud of some of them project after that. Maybe you are a successful developer and you're going to have a backlog and they're going to stay with you. We'll have a sort of your own self-performing construction company. I think. Well, can't control market conditions like right now. It's hard for anybody to build. So there's a less demand. Yeah. mean, it's a good time to do that because, um, I think there's a lot of guys that we saw online right now. I think you can find tower to where it is. Oh, years past. It was much harder. Yeah.
22:07
Yeah, no, for sure. Boy. Yeah. I think the lender is going to be another big factor again. Just. You'll get pushed back in some, they'll want to know about your team. Yeah. You'll know when you really get it. I think when you hit a certain deal size, the lending relationship completely shifts. Like after the 4 million construction law, it becomes like who's, who's running a project and why should I trust them? And that becomes a whole part of deck. Everything is formal AIA documents and requisition.
22:36
Not only that, it's like who's, who's going to be co-signing on this phone and like making sure that their net worth is enough where like if something, if things go south, there's enough there to kind of cover that. And so like that's, that's kind of the, the personal guarantee side of things is like they start, they really want to start seeing people with like deep pockets to like. Well, I know at a certain point the bank is going to require a bond.
23:05
Yeah. And bond is very expensive. And a bond is expensive for two reasons. So bond is a payment and performance guarantee. So it's a performance bond? Payment and performance. And you're going to, as the owner, you're going to have a GC who's going to provide a bond on the job. And that says that like, no matter what, like this is price we will finish. And if they fell down, went bankrupt in the middle of the job, call the bonding company and say like, look, I had a GMP for $25 billion. You're going to have to finish it. Like step in.
23:34
And it's insurance policy. But the problem is that the subs that are brought on board on a job, which is bonded, those subs also need to be bonded. Whether you make them buy a bond or not, they can also have the two side. That's up to Discuss like interpretation, but, um, a certain level size of south is going to be a limiting factor there. You call that. Yep. That makes sense. For sure. So then that's.
24:03
It becomes very expensive. Cause then what happens if, if that, if that GC goes belly up and they're not paying their subs, now all the subs are putting liens on your, so it's like, it becomes a real messy situation. you're bondage, you're pretty good. Yeah. No, but sub goes on size. Cause we didn't have to put a lot. If a sub goes out of business on a bondage job for GC and there's a big gap between them and the next sub, they are in financial peril. Yeah.
24:32
And yeah, lots of G scenes of actually done another scary. So it's very serious. So what got you into psych work paying too much for it? Honestly, like I don't know guys. Like I've always been like, I don't know if you guys look at problems like this, but it's like, just like constantly see the world in Excel sheets. And I'm like, why am I paying this much for this line item? And I'm looking at a demo job, for example, there's four guys there for a week.
25:01
It's 160 hours. I'm like, these guys can't be making $300 an hour. Like that's just, right. That's impossible. Right. So like, where's all this money coming from? And disposal can't be $5,000 a container. So like, where's all of this disposal money going? Over him. And yeah, over it. Right. Like whatever that means. But it's like, how can I continue to bring things into house that I previously didn't have control over? I've become a huge control switch from every part. That's like my whole.
25:30
My whole IMO. So controlling the demo, drawing that explanation, drawing the foundation, drawing the rebar shops, like controlling, getting ready for structural steel, which is like a full-time job in and of itself is where all of, ironically, the biggest cost and the biggest margins are in projects. There's like 40 to 50 % margins in site work and foundations. So it's not just site work here. You're also doing the rebar.
25:58
vertical, horizontal, do work and everything. Yeah. We bring in people as day laborers or full-time laborers specifically for concrete. And it's usually just like guys who were either part of the union or big concrete private shops that are laid off or whatever. Yeah. So like there's at least a foreman and they're directing. Yeah, that's right. It's a highly leveraged business. not cracking out widgets and very low margins. The margins are healthy. It's your, your height.
26:27
leverage, which can cut two ways. You can do really well or it will go bankrupt. And for that reason, like you'd have to be that methodical about the projects, like stuff that just delays and drags on, um, with one issue after the next, you won't live to see the end. I do do utility work too. We don't bring utilities in from the street. We do utility work on property because in Boston, it's the dread last license back to the, you know, working with BTC.
26:56
BWSC, like we do all the like work, but we have a drain layer who we some that specific kind of capstan utility from street to property line. We figure from the property line. How, like, where do you, like, how did you even like decide like what kind of quick that you needed? Like how did you go down that rabbit? Yeah. Where do you keep all your store?
27:24
It's actually like super interesting. I had, I had this guy on my site where I just met through a friend of a friend. His name's Arthur and Arthur just was on my site driving that un-excomated that was rented and he was there for like three months and I was looking at the ex-competitor rental bill and all this stuff. And he didn't have a job to go to after like he was just like a per week kind of guy threw him on my worker stop, like threw him on payroll. called in a day and he was like,
27:51
Can I work for you full time? Like I don't have anybody to go like you're sitting with instability or being an operator. And what was really special though Arthur was he had to read plans, which is very rare for having a machinery operating. You're in civil plans and you're in general plans and you're in structural plans. You know, to coordinate it with the machine and use laser, very rare skill sets to have all in one person. And so I just asked him what he needed. I was like, you full time? You tell me what machinery you need. I'll go buy it. We'll go find it together.
28:20
I flew them out to Texas to buy ice cream, I flew them to South Carolina and buy ice cream. And we just bought them a share together and like, even now he like said, Melissa, it'll be really cool. was $40,000 before it, but yeah, no, yet. yet. job. Had you priced the stuff at the earliest stages? Uh, you get a set of several plans.
28:47
Yeah. Me and Arthur sit down, I send it for a takeoff, I get the material quote. Then I asked Arthur, all I wanted to say to you, and I know it was payroll and that's my start report. And then I had 20 % for things I didn't think about. And then do you, are you doing psych work and excavation for other folks? Are you acting as a third party on your own jobs? No, we just started doing that. one of the Marsha was the second job we've done, third job we've done as an excavation job.
29:17
And some GC for fee work. GC for fee work. Yeah. Yeah. You gotta keep the wheels moving. you gotta feed them. You have all this equipment and you have to think of a way to it out. Totally. Yeah. But also like think about site work, right? Like it's pretty much like almost always four months of the project. Right. Down on ICOs, utilities. So in an ideal world, right? Like Arthur and our laborers are going to one site every four months and just going from site to site to site. But.
29:45
You have gaps from permitting from CBA delays from any processes. yeah, find caps, GSAs and fill them. And you got to fill that time. So otherwise you're over it. Do you ever have like overlap though? Like two things come through right at the same time. That's how it always goes. Like nothing for 60 years. then I got three products that all have to get done. Right. It's amazing. And you can do absolutely everything perfect and your week can just be destroyed as a song. Like.
30:14
Yeah. know, a job moves two weeks. Someone told us where it was going to start. You show up in the anchor bolts are in the right spot. Like we're covering these costs staff time out of it. It's just good buck. Yeah. And unless you have a big enough crew where you can start like shuffling pieces around on that chessboard, it's just, it can become a disaster. Yeah. That's kind of cool. Kind of insurance is like, I don't know.
30:44
Yeah. Talk about the legal audit thing you did recently too. thought that was really interesting. like, how would you come in and sort of look at your whole business from a risk management perspective? Yeah. So I brought in, so on the insurance, it's a lot, right? Like we have a million GL, 1 million, 2 million in policy. We have commercial umbrella. have personal umbrella. So I have like $15 million of coverage for me, my company and like everything in an ecosystem. Just in case like some catastrophe.
31:14
It's not going to but. Well, you know how it goes. If, something does happen, first question they ask is how much insurance do you have? And of lo and behold, that's their claim. Right. Yeah. Right. Um, and you try to push it like downstream as much as possible, but when you self-perform site work, like you are down. Yeah. There's no name on some yourself. There's no danger. So what does it waiver of subrogation? Yeah. We're gonna do that internally. Right. Swap the hammer.
31:39
Yeah, that sounds like a joke is that you set the structures and the entities up, right? You kind of can. Yeah. Well, it's so that's the thing, right? Like we have separate entities for site work for the GC company. Um, and we, we brought in a big law firm that would be a lot of business with to just go through every LLC, every operating room, every insurance document, get the insurance underwriters on the phone, get the individual policies all pulled and say, where are my holes? Go plug that.
32:09
Yeah. And that was a very fruitful. How leaky was the ship potentially? There was, there was some leaks. Yeah. For sure. Yeah. I'm scared to do it. Like I should. It's when he's like, sometimes you'll see the bumper sticker. It's like the more I read about the evils of drifting, then I quit reading. Well, it's, something where like you do it and you're not seeing that immediate revenue benefit. And then you're like, well, if I just do things right, I won't get sued.
32:36
You can't have that mindset. Like you do enough business, something's going to happen at song club. Well, if you listen to boyers on everything, you'd never do a That's true. If you're in real estate long enough, like you will be awesome. Like, I feel like such a pessimist, you know, that's, I think I'm more of a realist every time something fucking happens. I'm like, can we just have something go smoothly or not be a surprise to the downside? From the real estate. Right.
33:07
Sometimes I get some home runs. Those are nice. Yeah. Sometimes. Do you have a home run? If you could rank it, do you have a deal where it stands out in your head? this was a, not even a home run, like a grand slam. This was my best deal ever. It's hard. mean like- They're all that good? No. No, no, no. There's been like a lot of base hits, like a lot of doubles and nothing stand out particularly. Honestly, I kind of miss doing the entire thing. flips.
33:36
They have $100, $200,000 just flipping paper on those. risk. Low risk. But you spend 50 grand on, you know, architect zoning. It's a year of your time. It has some updates, celery, up your altar. There's nothing about what the zoning board is on why you have to wait three months for, uh, your rejection letter and hearing or whatever. And,
34:00
Well, that's also more free to like Boston too, right? Do you branch out of Boston? Well, Newton is the first outside city that you're doing right? Yeah. Newton was the first one outside of Boston property. And that one probably didn't take as long. I mean, I went through. No, it did. Yeah, it did. It was like, it was surprising. I don't know. You've done deals in New York. I'll take you. It took a while. just, there's a ratio of citizens to,
34:25
public servants in that neighborhood, it's like very high. It seemed like there was just like somebody for everything and like their old job was. Yeah, there's, I mean, there's layers and they don't have like, they don't have one governing board. have land use, right? So you have to have land use, would be like special permit or variances. then there's zoning is so restrictive that you might need to go to a city council vote after that, if it's not allowing the bylaws. And so we went that route, begrudgingly and then went back for special permit, but.
34:55
Um, yeah, it's like a year, just as long. just feel that in some of the smaller municipalities, at least you have a little bit more guidance on what can and can't be done. There's a lot less gray area, whereas like you go into the city of Boston and it's like, someone would get nine units approved on lot X and then.
35:24
blah, why, which is like three doors down. You're like, well, I can get nine units here because you got nine units, three doors down, same exact size, blah, blah, blah. Nope. You only got six. So it's like, I feel that there's a lot more. It's definitely not necessarily a coin flip, but you know, is the size of municipalities? Newton reminds me of Somerville and I'll like make up a distinction here. You have Bridgewater, Connecticut, where my family is this loss. There's one guy you can go to the building department and he just decides your fate. You can just knock on his door.
35:53
It'll tell you absolutely the answer to any question we have and you can rely on it you can go. You might not like the answer, but at least that's, that's your reality. And you get it from. Yeah. Or you have like the city of Boston where, um, you know, it is bureaucratic, but there are processes and it isn't quite the wild west. Like, you know, that it needs to be like this step and that step. But I find that like the municipalities that like are in between, but more towards Boston, like I'll use Somerville again. It's like all these different fiefdoms of guys who like you knock on the door.
36:22
They're kind of approachable. They'll give you this answer to that. also has an office and he's going to tell you another thing. And there isn't like a codified set of like this, then this, and then this. Yeah, I'll take that one further. they. not in New York when I had to go through the special burden process for my place in New York. It was nice because it's like, I go down to IST, they gave me a PDF there with the exact steps that I need to take to
36:50
to go through what that process looks like. There's no way you're getting anything like that Boston. It's like, if you're going in blind, you've never gone through the zb8 process in Boston. Good fucking lock, right? Like at least I have a piece of paper that kind of gives me a gentle out Boston's like, all right, all right, I a higher resounding attorney. I just meant more like the tree board and then this person and then that person and like then the historic and then the
37:18
trash group. Did the trash group talk to you yet about how your barons are going to go? We can't issue you a permit. Yeah. It's like, who do I need to talk to at sanitation? You know, I'm worried. again, you know, the Boston process, you've been doing it for a while. So it's like, you know, it's like, oh, I got to go. I got to submit my TMP. I got to submit my CMV. I got to submit my my rodent plan. I get you know, what steps need to be taken, but there's no written document that tells you what.
37:48
all these we want to talk to and what our groups to go to. I think it's just, it depends on how long you've been working somewhere. That's a great business idea by the way, like online database. Like I'm going to file a permit or go through zoning and insert this municipality. It spits out your checklists. That's awesome. I get targeted for that online scrum all time soon permit flow group. Although I'm short sell that business model because I don't think there is. guess things change like real time. It's like, you know,
38:16
They got like permit expeditors or something. Well, no, that's for handlers or something. He's talking about like, right, I want to do a project in, you know, Bridgewater. Yeah. What's the process? What's the process? Spit it out. It depends on what the codes are and if they've published them online. So that's another fun topic. This chain project we're working on right now, we like designed a whole project based on the zoning bylaws that were on the website. Just to find out that it was just updated and they forgot to update the website.
38:46
Totally. That happened in Bridgewater. We have a property in Bridgewater, speaking of Bridgewater, and we're going through a process to see if we can develop the law. Every two tiles. To add more units. But it's like, I downloaded the bylaws from the city's website, and then I had a call with the city planner, and he was reading off stuff, and I was like, well, I'm confused. doesn't, where...
39:12
Like what's sexually reading off of in the bylaws? I don't see that in the bylaws is like, well, what version do you want? And I told him, he was like, oh no, no, we just published one three months ago. So I was like, well, that's not on your website. And you said, okay, what did you do here? Like, that's it. It helped her. It helps. Oh, that's good. That's great. It was like an MDTA communities thing that they updated, but they didn't have an in the previous bylaws. So.
39:41
Well, there are lot of ways to get into trouble in Mill State. There's ways to be successful for sure. But there are so many things you got to watch out. They land nines. Yeah. What else do you have in the pipeline after this? After the, or do you have anything else going on in current? Yeah. I mean, we're working on a big project in Canton. Canton? Canton. About 80 units. That's probably going to come down a little bit, but that was the initial filing.
40:10
And then we have a couple of projects for an iron actually. Oh wow. We're looking at. So you're really going outside now. Yeah. I'm from around originally. Okay. So, um, school of good, like. Great opportunities in like South County and Newport and the answer that, uh, similarly pro developer right now, there's had like big town council change over. So now all of sudden they're going to the rest of the city on the housing straight. Um, and then some.
40:38
So it's a good GC for her. So yeah, yeah. Like a really, really good, nice full pipeline. Sounds great. Yeah. I think, you know, we were talking about it earlier, just how a lot of people, there's a lot of steps to get through things, what Cambridge just recently opened the flood gates. yeah. It's four years. everything is by right now. And so, you know, are you seeing any opportunities there or?
41:07
I know it's four units by right, but can they have like minimum lot size requirements and stuff or no? they basically made it so every undersized lot can be buildable by right. I think there's no single family, right? No, it's at least two units. Yeah. Everything has an overlay edition. Yeah. So it's like invisible zone and sitting on top of existing. Okay. It'll be interesting to what happens there. sure. Sure. Something interesting here. This is kind of a log separator.
41:34
I was chatting last night with some guys about ADUs and also like aging in place and really the costs of, cause you know, our parents are all getting older and you're sort of starting to change with the guards, you might call it. And you start to see the costs. Like you live through your whole life. And then at the end of your life, they just seem to like turning upside down and they're shaking. And it is frighteningly expensive for this type of care and assisted living and such. So one of the guys said like,
42:01
You know, I think that's why ADUs are going to become increasingly important. So if you have a property and you can put an ADU in the basement, the backyard, this there, so to say, you know, instead of paying, it's like, could be 20 grand a month for a certain... Yeah. you know, yeah. It's depending on what needs are there and that sort of thing. And, and, you know, the financial calculus is subset of it. Yeah. I can see that if I'm developing a project, I really think I'm going to look at least one extra time on how I could...
42:29
Also the admin view for that reason. then just what they'd be like, you kind of like they moved to the ADU and then they rent out their main house. You know, maybe I will just stuff, like prep for do the rough. If I didn't actually finish it all the way. But what a cool concept. Like if you are building a single family, um, to be able to say like expansion potential for you, know, we finished the ADU and it's there for you. Um, yeah. I mean, it's definitely not going to cost like to.
42:59
I don't know, to hire a full time in home. Yeah, there are some things for two people. It's not going to cost you 240 plus ran a year. And the hardest part of an AD that isn't part of your house is running utilities to it and getting all this stuff. So like how great would it be if you were running sewer lateral to just send one to like a planned spot in the backyard yet your architect doing a denim. Yeah, well, I'd service for you to design me at one bed, one bath thing and
43:28
I'm as a buyer, I don't have this fond room. So you get like snubbed utilities. Yeah. So like, by the way, in the backyard, like they be through your door or yeah. Yeah. I never know when I'm up in the shed. Yeah. I mean, it is, it is true. Like, yeah, like aging, like a lot of people want to age in like so that's why parents really want you. They don't want to go to like some gross facility. Yeah. Well, I'll push back with a bit on that. I think two things. One,
43:57
Make sure they have a plan because you do have to plan to be poor. And I'm not trying to say, it's called under law. Correct. The from the game of fire and estate planning. those two go in and, that's very important, especially with the five year look backs. Um, but it does take things away from them. But the second part I'd say is that, you know, maybe it's on our generation to build like a cooler, more amenitized 50 plus community.
44:25
Self-serving at some point we're gonna be that age do we want to be at home and maybe fall down the stairs all alone or do we want to build some cool place that We could all live with our friends like I don't think it needs to have this layer of being like a shithole place But they already have stuff like that. Well, you just said they're terrible. No, no, no I'm trying about like if you have to go into like a long-term care facility like a member those are all awful
44:54
But, um, but like they had a 55 plus communities, everyone. It's like clubhouses and pools and shuffleboard and all that. You're correct. There is a point where you can't another pattern. I never scroll on safe to do certain things. Yeah. Yeah. We could do a while there. So maybe I'll bring in my life is off. They shut that out. That's yeah. Now we can talk about some of these things. We should. It was never talked about it, but like we should plan for especially with our mark. are we sitting? We're starting to go through that. That's tough. All right. What do you guys think? Like the best assets I could do to really be.
45:24
80 years old and like one of the friends like I'm actually I put a lot of thought into this because I lived in L.A. for a little bit and you would see like retirement homes like on the cliff shaking at the water but draw cliffs so you can't go to the water. Yeah. So you're like, but then I was like really brilliant concept on their part. Right. It's like just give them like a taste and it's like kind of cool. Right. Look at the water. We can't touch it. But like I was like really cool. It was like, I don't So somewhere in between
45:54
Like an all-inclusive resort and like not cookie cutter houses. Right. So like something in between where like, you have like more than just like a check the box gym, a check the box pool to say that you have. It's almost like you just have like a boutique hotel. Yeah. It's made for people that made like built for like elderly retired folks. Yeah. Like you like part of your like HOA fee is like a doctor that you pay for any grant a year for that goes into budget.
46:24
to nurses, want a grant a year goes into budget. they come in and they clean your room every day. can a full service hotel with doctors and nurses. There's an asset side to it. I don't know what it is, but there's something there. I live there. I want to it excited. Yeah. I'm up there now. Hey, Don, my head hurts. I don't know where you are. Maybe you kind of marry that with like some kind of
46:48
timeshare things so can bounce between places. So you put like one in every major city. Yeah. Yeah. They're like, can retire and experience all the different places if you want to travel or you stay in place. It's like a company where they, yeah, they got like a timeshare, but you're in there. I think being an ex-cop is like, she's staying as like, you know, San D'Amono, pull your retirement funds and then like, you could build what you just described and it'd be financially feasible if it weren't South America.
47:17
But, um, the downside is, our healthcare. can go, this is quite a tangent, but it's been five episodes of that. Yeah. like that. This is good. Well, if you want to get ahold of you or your company or they want site work or whatever, how about they reach out? Yeah. And you can just email info at bgaudevelopment.com, bodevelopment.com and check us out. Also Instagram, hit up Mark. Awesome.
47:43
Thanks for listening, reading, review, subscribing. Catch you on next one. Cheers. Later.