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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
00:09
Remind me again, the last name I already forgot. The Hunter. Well, everybody says de Jager. I thought it was like De-yager or something. It's De-yacher. De-yacher. Yeah, but you can just say De-jager. Everybody says De-jager. De-jager. Have you? De-jager. Yeah, I got that a lot. What about Jaeger bombs? Do people ask you a lot about your preference for- I was in a frat for like a week and literally they just would call me Jaeger.
00:35
the whole time I was doing that. Could be worse nicknames than a Yeah, I thought it was a great nickname. Yeah, no. We had a kid that was named Pigfucker and he was called that for four. Can you imagine like being at a party with women and trying to like meet people and everybody's like, yeah, Pigfucker. Definitely. What the? Anyway, welcome to our podcast. You flew in from Florida to join us. We're humbled, we're honored, we're grateful. I feel like we're like virtual friends meeting in real life.
01:04
So this is great, man. We met through your boy, Johnny, and uh you hooked these guys up with 179D credits, which we can go into a bit book. That was a nice check size. You're welcome. Thank you. Thank you. No, thank you guys. I got a referral. It's on a balance sheet somewhere. It's gone, right? Let's start over. So real estate addicts. Yeah, all right. Let's let it flow. Real quick. Real estate addicts. Well, you want to start the music? Start the music. There is no music. OK. There's no music? Now we're just dying. Ray Hurteau RH Investment Group.
01:32
Dan Rubin, RH Investment Group. Mark Savatsky, Choose Boston. And Charles de Jager. uh Energy Credit Consulting. Translates to The Hunter. Kind of cool. Yeah, I'm humbled to be here, guys. It's seriously super exciting. You guys are all extremely impressive guys in this area. know, everybody knows you. I'm just so humbled to be here, you know, in the room, such great guys. You know, it's really cool. You might be our first guest that's flown up to come hang out. No, not true, Las Vegas.
02:01
Oh no, I was like, yeah, forget it. I mean, it was an easy decision. I was going to say, we counted on our hands, right? Yeah, well, if you did this in February, we'd be more honored, but at least it's Sunday. Listen, let's get to the topic. Once-in-a-year ID credits were awesome. Are they gone? Is that still a thing? It's basically gone. So we actually don't mess around much with incentives anymore. I actually, about a year back, changed my whole business because, you know, basically the one beautiful bill came in.
02:30
axed a ton of federal tax incentives. And then I realized like, wow, the government can just pass a law and my business is gone, you know? And that's like crazy. And so was like, I want something that nobody can just come in, pass a law and I'm just done. So we went into more like energy. So your original business model was just all the tax credit. Find money for your project. Yeah, incentives. was like, hey, there's all these energy incentives out there. We'll find them for you. And how did you get into that?
02:58
Oh, was so random. So I got a job at a tax consulting firm that did cost segregation and they wanted to basically establish a branch doing 45L, which is a tax credit for multifamily or like single family. And so they just like, like, Hey, you're kind of entrepreneurial. Do you think you could come and start this for us? And I was like, all right. I mean, why not? I was working the night shift at SpaceX on the weekends. So was like, I want to get out of this.
03:26
All right, hold on. What's that like? Yeah, what were you doing at SpaceX just on nights out? You have made too many stories. This is going to be a long episode. Did you go to school for accounting? how did you? No, I went to school for industrial engineering. Okay. um I guess uh I was really fortunate. My boss at the consulting firm I worked at was a lawyer, a tax lawyer, and he was so knowledgeable. And he loved to talk. And I would just get on the phone with him and he would talk for like five hours straight and just share.
03:55
knowledge with me about real estate tax like stuff and just learned so much over the course of that year or so. You're dork. I say that with a fashion. uh He's smart. I don't know about that. But yeah, and then ended up starting my own company. Basically I worked with them for a bit. um We did like one or two million in revenue in the first year and a half on that branch. And then I was like, okay, I want.
04:24
I want to step up, give me some more money. And they're like, no, you're 23 years old. And I was like, I'm going to start my own company then. And I didn't realize how hard that is. And you had a niche. I mean, prior to our project, I'd never heard of 179D. like I'd never heard How did you find out about 179D? We used 179D tax credits with Charles for some larger new Boston projects. I see. So we've got some decent sized checks.
04:53
But yeah, it's funny. Like, why is that a 40th birthday party in Austin this past weekend? And we were all like sitting around the hot tub and it dawned on me like after half an hour, like, we're just talking about tax strategies. What is going on in life? Like I'm like leaning in this guy's, this guy's like, if you buy a jet, can appreciate it every year to its full. I'm like, Whoa. This is why all the subs went bonus depreciation was in play. All of sudden they all had like, I don't know.
05:22
Tesla's and other really expensive like G wagons or something because the weight rating or something. point is the tax advice is just the fact that like, you know, you're probably talking about your bad shoulder and he's giving me tax advice. I'm like, I'm fucking old. Huh? Yup. Yup. That exciting to me. I don't know. He's like 24 and he's like four hours later. like, can you just go over that 42 L credit once more? L. 45 L. So. Which is a great credit. Yeah.
05:48
Yeah, I mean, worked for- Yeah, was. em You know, the thing about those incentives though is they, most people would like you to believe that like they're, you know, geared towards certain sides of the political spectrum, but they're bipartisan. Everybody in the government likes real estate and does stuff to help out their real estate friends. And they get canceled and taken back and forth and they'll have like gaps and then they'll go back and say, okay, now you can go back and do it. And it's like, it's always changing though.
06:18
And that's the part I wanted to get away from. So now we just do it as like an add-on. It's like, Hey, and we'll do all this stuff. if it's available. Yeah. We'll make sure you get everything. what's the primary line of work? How would you describe your business now? We just get people energy code compliant, but we do it from a cost first standpoint. So basically what got me, what really piqued my interest was that you've started this email series. Correct me if I'm wrong. It's like the ECC edge. You've called it. Okay. Cool.
06:46
It's essentially really niche topics, but very, very real world, real numbers, real savings, really detailed. You know, when you're building a new project, your architect is going to bring on like an MEP and they're going to design your mechanicals and electric and plumbing, but they don't give a shit what they're putting in. I mean, they say they do. And I don't want to insult any of them that they don't, but they're putting in, don't know if they're putting in like good, better, best, or, you know, how detailed that discussion gets, but.
07:16
You know, when we were doing that project in Lynn, it was like, do these heat, do these dryers have dryer vents everywhere, have these vents all over the place? No regard to fire separation, dampers and the cost to put 7,000 stacks through the roof. So what was really interesting was that your email series has kind of tackled each of these components, talking about spray foam, how that might be going away or talking about going from ductless to ducted, how that's not a good idea. So I just really found it very interesting.
07:45
pumped that you're here to talk about stuff at a high level. Give us a real good, like a recent story where like- A real world example. Yeah. Something that happened recently? Yeah, it was hard to follow Ray's logic there. So- That's a story in my life. Thank you, by the way, for the compliments. The goal behind what we're trying to do is just to show people that like-
08:11
There is no 100 % right way for every project, because every project is unique. They have a unique team. They have a unique build. They have a unique situation. Like there's no two real estate developments that are the same. And so you should never just say, this is what we do every single time and we never consider anything else. That's a better way to say So where you see a good one size fits all thing. So I mean, a win that I saw last week, it was a 530 unit project. think it was in.
08:39
Uh, it might've been brain tree mass that's going to go up. um, here's an example. So there's two paths. You can look at energy code. can say, I'm going to do a, you guys know what like a hers path is? Um, and then like, have you heard of like Teddy? No, no. It's, uh, so it's just two differences. So you look at, I'm going to analyze just this unit and do it on a unit by unit basis. That's hers.
09:02
And then Teddy is, hey, I'm gonna look at the whole building all at once. We call that prescriptive versus performance. So they're actually two different types of performance. there's like prescriptive, which is just follow this general list. It works, it's easy, but you're probably gonna blow a lot of money that you don't need to blow. ah But then there's the performance side. You've got like actually like three or four different paths just inside of that that you can do.
09:29
And it's all just different types of energy modeling. so um what happened with this big project is, is their consultant looked at it from a Teddy perspective, whole building, spec'd a bunch of stuff out. um We give away free energy code feasibility studies where we do the analysis to see, what's the most cost effective way to get there, to pass. And so when we were doing it on this project, we just took a hers approach and saw, hey, you actually,
09:59
don't need to install continuous installation at all on this one. You'd, and you also don't need triple pane windows. You can drop that to a double pane. And across the whole project, I mean, that was, mean, I don't know the exact numbers we estimate, but we estimated several million. And so not to mention, just hate, well, as a builder, continuous exterior installation just presents so many little challenges and odd it. It's, it's, that's cool.
10:26
Yeah, so I mean, like that's an example of where it was just over specced. So to your point, people just have a way that they do things, they know it always works and they're just kind of like, I don't wanna go outside the box. And it's like, well, you can and you'll save people a lot of money if you do. What's the sweet spot in terms of project size though that you kind of feel your business is best at? Obviously the bigger the better, know, cause they save more. uh
10:55
If it's under 12 units, it's not that it's not helpful. It's just that. Kind of trading six for six. Yeah. Yeah. And honestly, when you're under 12 units, just find the cheapest guy you can to get you through energy code and he'll just get you through. Like don't even waste money if you're under 12 units. Cause it's like, the incentives are not going to do much for like townhomes is a little different because the incentives are huge with those. But. Really? Yes. Why?
11:24
Honestly, I don't know. uh I was pissed though that they didn't treat townhomes because I just finished five townhomes and they were not, single families were great. The townhomes, I didn't find that I got that much money. Really? Yeah, maybe I have some money out there. How much did you get? uh Well, you don't have to share. No, I'll say if I remembered, I would share. I probably think it was like somewhere around $1,800 per townhouse. Yeah. That's it? That's it. How tall was the building? It was three stories.
11:54
You should have gotten, were they stacked or were they- Side by side by side. I don't know why you got that little money. Somebody like, cause like I'm on the phone with the Massive guys regularly. Like you should have gotten at least 7,500 a unit. And I guess we should clarify. Are you just Massachusetts or do you also have nationwide? It depends on who's asking. Okay, fair enough. I'm going to be on my phone many person emails. guys can talk. it's a big project. No, Mark's getting mad. Why? Well, money on the table.
12:24
It's nothing to do with you. There's six grand times five. There's 30,000 bucks somewhere out there. So yeah, we do stuff all over the country. Really the studies are great because like, we just, if it's a new state that we haven't done anything in before, you just look up the code, see what the requirements are and then- It's not even state though. lot of it's within each municipality. Because if they're adopting certain years and if they, like it's just-
12:53
Which hers version is it? It's a pain in the ass actually. Massachusetts is, they're not in their own field there, but they're unique in that they do that. they're like, a lot of states are just like, hey, this is what we do for energy code. We do it everywhere. like, that's how it should be. Right? It would be simple. Texas, every single municipality is different. you just, you literally have to do, you have to look up for every single one. Massachusetts is like kind of in the middle where it's like,
13:22
Well, some municipalities will just follow what the state mandates, but then some municipalities kind of go above and beyond and like they implement their own. They don't implement their own, but they adopt higher tiered programs. Yeah. Right? That are, are they still, is it still through the state? But it's just, I think the state has different tiers, right? Yeah. And the municipality elects which tier they want to follow. Exactly. Yeah.
13:50
So there's like, yeah, there's like the base stretch in specialized opt-in. And it's basically, if you're in multifamily, it's am I doing uh just a blower door test? Am I doing hers or am I doing passive house? It's one It's also hard from a developer standpoint because if you do projects in all these different municipalities, I mean, some developers focus just on one or two, and they get used to it, but it's like your cost to build could go way up.
14:20
depending on which municipality you're doing work in. And that's what I find so compelling about Charles is that he's almost making it seem like he's gonna help VE. And I'm not trying to sell your services, I haven't been. I could be totally wrong, but. For more than 12 units though. Of course, of course. There's always that, yeah, keep that in mind. But it was interesting how, you know, like, oh, well we still achieve passive house. And maybe you can speak to some of what Dan was saying, like.
14:49
achieving things that each municipality wants without blowing the budget or finding those creative ways. And yeah, it's interesting. I would say that the money is found for us by running tons of energy models. like, think of it like we'll make anywhere from 30 to a hundred small tweaks to the design and run a simulation for all of the units. um
15:18
and we do that for free for people. And then we run a cost analysis for every single tweak. And it's like a lot of work, like a lot of work. you know, we just hit this point where I realized like, wait, like one small fine, if I can cut, you know, the U factor in the windows by 0.05 and take it from a triple pane to a double pane, how much money does that save a developer of 50 units versus I charge five grand more for my fee?
15:47
Like they don't care about my five grand fee, you know? And so we're like, well, if we can just give these away for free, then more people will believe in it. And then, you know, half of the people who get one end up wanting to work with us down the road. So it's like, it pays for itself. It's just a lot of work up front and, you know, some people just take the study and run and that's fine. But. I mean, they still got to implement it and you're not like giving away all the secrets. You're just saying this is theoretically what could be done. No? No, we just give it all away.
16:16
Like I don't even. So then how does it, I'm trying to figure out your, do you help them like get the incentives or yeah, what's. Yeah. Okay. Okay. I get, I guess to your point, it's basically like we'll give them the design upfront. They're going to probably want a few more tweaks once they get close to permitting. And we just say, Hey, here's the design. You could use this. It'll work. And you don't, you could go find someone else and you don't even, know, this is going to be the best way. And then we just say, or you can work with us. This is how much it costs. And that's it. And we get them all the incentives. We get them all.
16:46
You know, we get them certified for whatever they got to do for their municipality. And it's pretty much it. It's pretty simple, but. Cool. Hey, tell us if you own a spray foam installation company right now, is this the time to sell your truck? Yeah. You had an article about that. So.
17:05
I would just be, there's always new solutions coming out. Like people are so. Innovative and entrepreneurial. are, they're so innovative. They're gonna find a way to make it good. The only thing I would caution people for.
17:22
Massachusetts is truly at like the forefront of energy efficiency. This is why we picked this state. There's almost nobody doing what they're doing here. There are states following it, but nobody's like leading the charge like it is here. And what I've heard from people is that you can't really go any further. The buildings really can't get any more efficient than they are.
17:49
unless new technologies are created. And so the next step is like carbon emissions then. So we want to make sure the materials you're using are low carbon. so spray foam insulation, not great on that scale. It's awful. It off gases, the VOCs are nuts. They say that the savings you get, correct me if I'm wrong, over the lifespan of it is just blasted out with whatever it, whatever blasts out during the curing process is like.
18:19
that completely offsets any of the savings you get. Like from energy savings over like. From an environmental perspective now. So like the chemicals and the way that foam is created and. Right. VOC is volatile organic chemicals and essentially. reason you can't be in that building when it's curing is because all that shit that's off gassing is horrible. Yeah. Yeah, so you know, you gotta.
18:48
So they're getting away from spray foam? Are they gonna ban it? No, they're probably not gonna ban it. They're just gonna say like, hey, so they've already started it a little. So like you can do this thing where you can opt into a carbon efficient path for insulation or concrete. you just, if you, basically get an extra three points of wiggle room in your hers rating. Oh wow.
19:12
And so- But what is it, instead of spray, where do you just doing extra, like additional layers of fiberglass? That's where it gets tough. Cause really the things that work are like recycled cellulose. So they'll do like spray, you know? Net and blow. Yeah. Oh. Stuff like Chopped mineral wool. Yep. Recycled blue jeans. You probably know better than So basically we should be investing in rock wool or whoever owns rock wool. Yeah, rock wool. I mean, all right, so.
19:41
Interesting. I want to, I want to pivot again. Sorry to be so ADD here, but, 12 year strategy for like new customer acquisition. I think it's pretty interesting. I see all your stuff on different areas of social media. Um, I've, I've tried to recruit you to help us with our brokerage, with our customer acquisition for people selling their houses. Um, you know, talk to us a little about that. Like how to, does that whole funnel work?
20:08
So I subscribe to the Alex Hormozi theories, if you guys know who he is. Of course, Yeah, so.
20:18
We used to spend around $10,000 to acquire a client. And, you know, I'm 28, we don't have like loads and loads of money. 10 grand is a lot of money. And then you gotta wait two or three years to get paid out to return that. So it's really expensive and really hard. But what's much easier is to just, you know, take our employees' time for, you know, $1,000 worth of time and give somebody something that's worth 20 grand.
20:46
to them or really worth way more than that, cause you're save them hundreds of thousands of dollars, give it to them for free. And then they love you. They're like, hey, wow, you just solved the problem for me. Maybe you can solve some more. And so it's kind of like a give. It plays on like reciprocity. It's like, I give to you, you're probably gonna want to work with me. And not everyone does. Some people just take it and run. And that's okay. Like we're not trying to get, there's no catch. Like- I hear you. That's like the whole premise of a jab, jab, jab.
21:15
Left hook which is it's not hermosy. What's the other sneaker guy? Super cool. I'll think of his name. Yeah, great. So I guess percentage wise out of the number of people you give these free things away to what percentage come back and actually 50 % Okay, so our customer acquisition costs around $2,000 now down from 10 grand So it costs you two grand
21:45
to develop these free reports and then 50 % of those that go out, you're getting a client out of. Yeah. That's pretty good. It's great. mean, and a lot of people come back and there's also like not anybody really doing this. And so, you know, if you want to get that kind of report where it's a cost first approach to energy, like it just doesn't really exist. Even the big firms don't do it. um So yeah.
22:13
I think it's interesting. It's the only thing that really works. And then it's cool too, because it feeds all the content. So like you mentioned the emails and everything. It all just comes from the reports. Like I just read through them and I go, wow, that's interesting that we found that in this report. Cause we did a hundred different analysis on it. And we found out that like, oh, hey, if you go from an R49 to an R60 in your attic, it didn't do anything to the model. And you just spent all this extra money. Cause that sounded like a good number.
22:42
Like that's literally why people pick these numbers sometimes. They're just like, well, we used that on the last one. it's trying to check up, you're not just trying to check a box, but you, have to meet the requirements. so like you said, it's also one of those comfort things like, oh, well I'm familiar with throwing extra installation in there, but maybe I'm not familiar with this particular combo that your spreadsheet spits out. Yeah. Yeah. And there's also like the factors of like, we spend a lot of time upfront, just talking with the team.
23:11
And when, when do do that? Like, are you in design phase? it earlier than that? Or are you in like construction doc phase? I'm sure it's as early as possible and it's more beneficial to get in. No, it's not a yeah. Tell us about how your, your, your social media feeds from Twitter to Instagram or to LinkedIn and, um, you know, how that whole kind of.
23:40
What'd you call it? An algorithm? It's just a funnel. Yeah. I guess, yeah. You just, so I copied it off of, uh, Alex Ramose and Sharan Shavatsa or whatever. Cause Sharan is like smaller. He's like with the acquisition.com group. And, uh, I saw that he'll post like, I don't know, like five to 10 times a day on X. And then I'd see they'd be very short ideas. And that's it. just an idea. And then you'd see that turned into a more elaborate post on LinkedIn, like a month later.
24:09
And I was like, wait, so he's just taking his best performers on X that are just topics and then only putting the time on the topics that people care about. And then- using that, like he's testing the waters. Exactly, it's a testing ground. And so X is a testing ground for ideas. Then you turn that into a real post so you don't waste time making posts that nobody reads because it was a bad idea. And then the posts that do really well go into email and you send out one email a week.
24:38
And then, and you can do two to three LinkedIn's a day. I've got to get a little bit more uh fresh with some of the ideas. Cause I think, I think it's starting to get boring to some people. it's so hard to keep coming up. just, but no, that's how are you using, are you using AI now? I assume in your business. Yeah. It's like, I believe that.
25:05
I aspire to be the like multi-million dollar company with two or three people. That is my goal. I really do 100 % believe we're going to get there. I like, have basically written out on a whiteboard everything we're going to do. probably 25 % of the a photo of that board. How many employees do you have? W2, just two. Okay. We've got 1099s that do inspections and stuff, but.
25:35
That's a lot of people, but just two employees and me. it's, know, AI can do like 90 % of your work if you are just willing to check what it did and correct it. And then it looks unbelievable and it does a better job at you than a lot of things, but it just doesn't understand the nuances of humans. And so it'll do like weird stuff every once in a while. Like it gave me a post idea from one of our studies and it was like,
26:03
Oh, you should tell them that if you reduce your insulation, you'll save money. I'm like, we had no... Of course. But he doesn't understand, that's not interesting. there's nothing cool about that. What about data scraping for new customers? Dan's building a project and it just got permitted. All of a he gets an email in his inbox and it's like, Dan, I love your podcast. And I can't believe you just got your approvals in Linn. But it was just basically...
26:31
publicly available data that you're scraping and tell us your secrets. you guys? Okay. I found this one recently. uh So you've got like all the big ones, like the Apollos and the a hundred IOs and all those big like lead enrichment companies are like people data labs, like who just gather data on people and you can pay a lot of money for that. But what's really interesting now is um have you guys seen like Appify? No. Sounds familiar. Oh my goodness. No, it's not like Shopify. ah
27:01
you've got to look at it. Basically, it's a marketplace where people develop scrapers for everything. And it's just like, like you could go in and say that you're like, okay, well, lot, there's a lot of information on, I don't know, CoStar that I, that's really pertinent to me. I want to scrape it. And you build your own scraper for CoStar that works well and you maintain it. And then you put it on here and anybody can now use it. And like, you can just go in there and pay like, I don't know, a cent for like a certain amount of compute.
27:30
oh of like usage of the scraper and there's thousands of scrapers for thousands of different purposes like permitting, there's social media ones, there's everything you could imagine. cards. But aren't like things like costarts, like it's a quote, like you have to be, you have to pay to get access. They don't just have an API that you can just hook into to get all their data.
27:52
That's true, but what a lot of these guys are really good at doing, like for example, LinkedIn is locked down at scraping, but there's something called a Voyager API. And the Voyager API is basically people figured out how to kind of like hack into LinkedIn's code. And I don't quite understand it, but they create their own like.
28:14
They're reverse engineering it almost. Exactly, they reverse engineering it and pull the data. But yeah, those loopholes exist, but then obviously LinkedIn could just turn around one day and just close it up. You're right. They're just do like a take down, like, can't, terms of service, you're not allowed to reverse engineer. And that's the cool part about this is like whenever the reason why Appify is cool is because, and I'm not sponsored by them, I just think it's sick. I've never heard of it, this is really interesting. Yeah, the reason why it's so cool is like you might have some random guy and he just,
28:42
always uses this LinkedIn scraper and whenever LinkedIn goes and does something to mess it up, he's gonna go and fix it. You don't have to worry about it. That guy's gonna fix it. And if he doesn't, there's 20 other ones that you can pick, you know? And so it's- I'll tell you when I want someone to build. I'm interested in this for real. There we go. So let's hear your idea. I have a thesis that people who leave lots of negative Google reviews are people that you should just avoid in business. Whether they're a drywall subcontractor, a painter, a customer for your condos.
29:11
It's just like, there's probably something wrong with them if they're 10 to one negative reviews to positive reviews. Like I want to work with the guy that's like constantly going on Google and being like, R.H. Investment is the best development shop in Boston. And Charles, he performs the coolest energy reviews. I just don't want them to sell or deal with people in my life who are like, there weren't enough seeds on my sesame bun and the masonry blocks need to have settled by one eighth of an inch. Like I'm all sad here, life's too short.
29:40
So I tried to build this. tried to find, can I see Dan's reviews on Google without, like, finding a business that he reviewed first? Have a bias factor or Are you talking about, like, you want, like, for a buyer of your project? Yeah, or even people that I might just contract with, like, work with, whatever. Because you can fluff the...
30:02
the reviews too, like, oh, get 10 friends to say I'm the best company. No, no, no. don't. Oh, the union's amazing. Don't go out to you. You can pay. I'm not, I'm not. don't really care that my metric here isn't what the Google reviews say about the business. want to know what an individual is going out into their world and writing about random businesses. You don't want to work with that guy. It's such a red flag. Yeah. So that being said, like the only way I've found to do it is to like randomly stumble on something that that person reviewed.
30:31
then click their name and then it'll show you what they've done out there. And if they have one review and you can tell it's a bot or two reviews, like kind of lower the weight. It's almost like a review system, right? Where if they're constantly doing negative reviews, they're like, oh, or How many one stars is too many one, like any one star I think I have two one star reviews in my life. were they? I'm curious. That is a good question. That's a really Oh, yeah, yeah.
30:59
One was California closets, all named names. That was the worst experience of my life. What happened? And I told them like a million times, and I gave them every opportunity, what happened. Yeah, I bought my own closets from California closets and um they couldn't deliver them on time. So I was like, cool, I'll rent a U-Haul and I'll just pick them up. And I showed up and nothing was organized. So I waited, got all the stuff and I got back to my place and it was like...
31:27
Imagine someone like delivering a car you with like three tires and like a half of a steering wheel. like we're like a day into installing this. I'm like, okay, I need a fourth tire. Like I just, I can't drive this car. I'm going to put my tools down. Now I wasted a whole day. I'd like give them a list and they'd be like, no, that was already in there. like, it wasn't. And this like repeated to the point where I had like a massive change order from my, my finished car for a good reason. was like an inefficiency claim for like three days of time.
31:55
Cause they just could not figure out how to give me four goddamn hubcaps for a car. So that's worth the one star. That's worth the one star. So your one star is you give them a chance and they just fumble completely. And again, they cost you money. My time was what I was dying for. then like, it delaying my project. I also feel a very strong compulsion. I don't know if you guys share this, like guys who work for me, especially my subs, like
32:24
I want them to succeed by working efficiently on the jobs and having the tools and the materials in front of them. And when like somebody messes that up, it reflects poorly on me. I feel very like it's worse than if you just wasted my time. Yes, yes. It's terrible. the ramifications, it's just like, it's a staggering effect. It just screws up so many downstream.
32:51
It just impacts everything. How do you guys plan for that in development? I've always been curious. every day's a new day. Well, you try. You tell them, like, hey, don't touch this, and then they touch it, and you're like, fuck. No. No, no, no, no, no. You gotta plan. Like, if I know that I need, like, if I know my framers are starting today, I'm ordering lumber, I'm ordering materials for them a week ago and scheduling it to make sure that it's on site, on time, when they start.
33:20
You know, and you can only do so much, right? Like I try to tell the guys, like, let me know when you need the next drop, like, and you need to tell me 24 hours in advance, and you know that never happens, but it's like, but from a material standpoint, like, I'm ordering as much as I possibly can, as early as I possibly can, so I have it sitting somewhere, you know? And there's a balance between handling stuff twice and having just...
33:49
this shit sitting around that then gets stolen, lost or thrown away. yeah, so it's a challenge is the short answer to a very good question. um Okay. So I don't fully understand this. You guys might laugh at me for this, but so you guys will like complete a certain level of work and then the bank revealed like basically opens up more money for you. Is that kind of how it works or no? Yeah. mean, construction is a funny business because um it'd be like taking your groceries.
34:17
you know, walking past the checkout counter and unloading them into your kitchen. And then you get the bill. Um, the only thing I can think of like that is like restaurants, restaurants are like construction. So far as like you eat all your food and then the bill comes. like our guys are usually being paid like a month in arrears. So they'll, they'll do a month's worth of plumbing. And then at the end of
34:37
That 30 day billing period, we get a requisition and then the bank pays and then everybody gets paid. could actually be two months behind too, in some cases. So they do the month, excuse me, this month, May. May is over. They're like, okay, I got to send you the bill. Now that's June 1, right? So now you have like 30 days to get that to the bank. Then the bank gets the money to the owner, owner to the GC, GC to the sub. So it could be.
35:01
like 75 days in some cases. that slow the process of construction down though? It does. Well, sometimes. Let me tell you, one of my superpowers as a GC is that I pay every Friday or every Tuesday or Wednesday, whenever you need it and you've really earned it and you have my trust, like the money's here and like I will keep that. That is the kind of the lubricant for a project in terms of schedule is money.
35:25
So guys are going to send their people to where the job's paying them. So I try to make sure that that's never going to be something that's going to cause like friction. Yeah. That brings up such like an interesting topic too. Cause I feel like em when you have people who don't feel like they're being valued or paid well, they don't work well. And then everything probably gets hurt. I imagine. There's a wide spectrum, how do you, Mark, how do you.
35:55
handle your capital stack that way. Cause obviously you've got to figure out how to fund them a lot. look, there's a term called front end loading. And, know, sometimes my demo budgets are a little higher than, you know, whatever, but I try to keep cash on hand too. Like there is always a balance too as a developer where it's like, I don't want a requisition for too much. Cause then it's just sitting there and I'm paying 8 % on it.
36:22
But generally speaking, I will also sell fund to the tune of, know, humbly, like 100 grand I can easily put out there before a bank has paid me back. And since it's my own project and it's my own money, I'm like, it's not that much of a risk. I also think it's like, subs also, it depends on the size of the project and the scale of project. Like bigger subs are used to requisitions and the, you know, the process and how that.
36:50
how the draw scheduling goes, but like smaller guys that like need to pay their guys or need to be fed every Friday or every other Friday or something like that. Those are the guys that you need to keep in mind. But if you want to deliver a project at a reason, at an effective cost, you probably, you know, you can't have all the Rolls Royce Mercedes Benz subcontractors who have PMs and admin staff and can wreck you at the end of the month and wait 30 more days. Like those guys are expensive. Yes.
37:18
Let me, let me, I saw something on Tik Tok. So this guy is one of these showboaty I'm so rich kind of guy developer guys. he's driving around in his car, presumably in Miami, maybe. don't know. Wow. That's not scary. Wow. know, Charles is from Florida. Yeah. That's our town. No, no. I'm just saying. he's, driving around with the.
37:47
Anyway, he's like, I pre-sell the project. First I pre-qualify the buyers and then I pre-sell the units. Oh, I see. I saw this. I saw that too. I ask for a 50 % deposit and then I'm using 80 % of that 50%. Absolutely illegal. So I don't have to do a construction draw. I was like, is this guy so full of shit that he thinks he's just like bypassing escrow laws? No, Florida law is different. That's totally different. You can 100 %
38:15
use buyer escrow money towards construction in That's insane. Really? Yes. How is I should qualify on that. attorney. You should consult one. I just play one on TV. So you know that's If you're doing development in Florida. But I happen to know that like in Massachusetts, you can not touch those deposit funds and put them towards construction. in Florida, yes, you can. So he was claiming he could use- Yeah, it's the Wild West. 80 % of the 50 % deposit. And I don't even know where he's finding-
38:42
I don't know where he's finding these 50 % deposit people. Well, he'll sell, he'll basically pre-sell 50 % of the building before he even breaks ground. the in Florida typically require that you pre-sell 50 % before a shovel goes in the ground. Like, yeah, there's, that's a very common business practice here. It's an interesting state. It's crazy. Not quite a crazy Miami guy at all, but. uh
39:09
I do like, yeah. I'm glad, aren't you? Okay, that wasn't a weird one. got one for Florida real estate. How did you figure that out? I spent some time in Florida. So, I don't know. This has been a great conversation. I feel like we've kind of gone away a little bit from where we started, but I'm not mad. No. Do you want to tell us about your all electric trap? Yeah. Oh, okay. Cause I just had a building this morning, our building in Lynn lost power and I felt like I was in that trap. Nothing worked.
39:35
All my alerts went off at two in the morning. I drove down there, find out that there's no power. Is that the all electric trap that we have no backup systems here? Maybe, maybe. Should have a generator. Yeah. That wasn't spec, that wasn't designed. I would just say the all electric trap is this. um
39:57
There's like this belief going around that you just can't use gas anymore. New construction. Well, some municipalities will let you bring it in. There's 10 of them banned, Natural gas we're talking about, not gasoline. Yeah, and if you're, know, if you're doing, you're, certain places, yes, that's true. But a lot of the state, like, not only is it like totally possible, all of the energy people freak out on me for saying this, but it,
40:27
does really well in models, which means it's probably very energy efficient. like, basically, like, you know, like the heat pump water heaters, everybody's pushing really hard. Like, I'm sure you all know this, it does really, really well in models. That's why they all push it, right? Well, gas water heaters do just as good. And so you get a little penalty in the HERS model for it, but it does just like, it does so much damage dropping your score. Like,
40:53
you can basically pick between a gas water heater like that instant Navy in one, or you can pick between a heat pump water heater and it's gonna pretty much do the same thing and the rest of your building's gonna look the same. That's fascinating. I thought that you forfeit all ah rebates and that you have to now put solar panels on the roof. So that's another- Is that hypocrisy? So, okay, so in some municipalities, you do have to put solar on the roof if you do it in a specialized code zone.
41:21
the stretch and base ones, you don't have to put solar on your roof. And a lot of people don't know this, in any zone, regardless of what you're doing, um you can put gas water heaters in, nothing else, just water heaters, and your MassSave incentives are still intact, as long as it's multifamily, five units and up, and you don't lose that at all. so what, like- Nothing is better than a tankless, like for domestic hot water heating.
41:50
Navian is the top of the, is the pinnacle. A tankless hot water heater is efficient. It's smart. It works really well. It's all the good things. The heat pump water heaters, I'm actually testing a new one that's interesting now from AO Smith. ah But the heat pump goes outside for the hot water. It's almost like it It's like a mini split basically. Yeah. So they're taking the noise.
42:15
Yeah. Producing component out of the unit. that blows cold air in January. more expensive or no? You know, I got it for free, so I'm not sure. This will be an additional small thing that goes a judge for Dynos. I was gonna say, this is gonna be on the second edition, annual Good House. I shouldn't really say too much more. It's kinda like when The Bachelor talks about the So basically all that's inside is almost just like a holding tank. Yeah. Ding, ding, ding. Think of it like a VTAC versus like a split system.
42:43
Yeah. That's interesting model. Yeah. I lost so many buyers in Newton because I couldn't provide gas cooking. um A lot of buyers who purchase in Newton want to have like walks and that's their style of cooking. I'll tell you one thing. I like induction better than gas. Yeah, but you don't cook with a wok, do you? Sometimes. Okay. With induction? Yeah, they make them. I know they make them because I staged the properties with them.
43:12
I don't cook with a wok. so gas cooking, can you do it or is that, that gets? No, so, so, that's something that we're finding too. um Like I used to be an incentive guy, so it feels weird, but like, I mean, just the more and more that we get into it, the more it's like, you should just focus on lowest cost and ignore the incentives.
43:36
And unless you're building townhomes. And they keep getting worse. Well, I need you to look at my townhomes. already And what do mean, unless you're building townhomes? Well, townhomes, can get anywhere from 7,500 to 15 grand per unit. And so, from MassSave. so, if you are doing that, like that is a big enough number that it actually can be a deciding factor on what's the all electric. Yes. It's a real deciding factor on multifamily.
44:04
The incentives are like 1750 or 2100. you say we did high rise and it was really, really low. Our building was like the high rise program. So I know what you're saying. Yeah, and it's terrible. I guess it depends on, you know, a couple of caveats, right? It depends on the year, because every year MassSafe changes its rules and incentives, right? Yeah. That's based on the funding that they get at the state level, which currently there's a lot of negative political pressure to get rid of MassSafe because everybody's bills
44:33
are going crazy. I mean, do you think Mass Save is at risk of future cuts or tweaks or do you think they're just gonna shift around the items in the cart?
44:44
No pressure. No, that's a great, that's a great, you're messing up my relationships there. Okay, all right, fair enough. No, I would just say that uh I have heard like budget cuts. um Usually that means they're gonna shift stuff around. I mean, others, I actually just approved a post to go out for that. In Arizona, they just totally axed the programs. Like literally just midway through, just all these people were pre-approved for a bunch of money. And it was just like,
45:12
Literally, I think it was, I don't know, a governor, a mayor or somebody was like, we're done with this. Signed a bill, boom, gone. It's all incentives, gone. All incentives. I don't think he has a chance of winning. Brian Short Sleeve, he might have already be out, but he was like, day one, I'm getting rid of it all. If he's even allowed to, but that's a real risk, right? Like that could happen. Well, I mean, what's the risk? It's like, yes, the incentives go away, but you're still required to build and meet certain.
45:40
Co-correct, correct, but incentives is one facet of that equation. Because really what they're doing is, and they do this in the Northeast a lot more than um other states, is to help push their- Agenda. Energy stuff. don't wanna, I don't wanna, okay. I am neutral in the, I'm neutral. I mean, I'm raging red, don't worry.
46:08
Respect. I'm just kidding. Can we turn off Ray's microphone? Mark is baby blue. Ray is the audio video guy. This isn't fair. Can we play overrated, underrated or appropriately rated? Are you familiar? I'm in. Okay. All We're going ask you series of questions. You're going to answer very quickly based on your own criteria. You can't ask for clarification. The first one is solar panels.
46:33
Hold on, hold on. With or without batteries? No, you can't. That's for- Underrated. Underrated. Okay. Really? Say more. I heard this from a developer recently. He did gas, had to install solar, and he said it literally improves the investment value of the property because I get a return on it. Oh, interesting. And he said it's the only energy-related thing that I get a return on. Now that's going to be if you're not doing a PPA though, not a power purchase agreement.
47:01
Or you're selling them as condos. What about in single families? Sorry, I'm adding to this question. I think solar's kind of dead for a while. I mean, it was subsidized, the prices have to come down. I mean, the tech is getting better. The efficiency is getting better, so that's good. It's just kind of a weird thing. It's like, oh, hey, let me take out a $50,000 loan so I can still pay part of my power bill. Like get rid of the power bill or like...
47:29
don't do solar at all, like one or the other, but I don't wanna like pay half what I used to pay, that's weird. And make a loan payment. Yeah, and make a loan payment and have like, what do you do when you sell your house? Well, the real risk also going back to, mean, I hate to bring politics into it, but the net metering laws, they change all the time too. Oh my goodness, yes. you know, what they're gonna give you, I mean, nothing's free, right? So the electric company has all the infrastructure to distribute the power. If you're not a revenue generator for them anymore, then,
47:58
They gotta get it from somewhere else. So I'll leave it at that. They hose you on that net metering. I actually don't know what that means. So what they'll do is, is so let's say, you're buying your power at a hundred percent for every kilowatt, call it 10 cents a kilowatt hour, right? If I'm generating it, you know how your bill has like 75 line items, some are at a hundred percent, some are at zero percent, some are at 25%. And that all gets negotiated somewhere. Okay. Yeah. uh
48:26
Let's say Massachusetts is like, everybody go install solar. We'll give you 20 grand if you install solar, right? And then everybody installs solar. And let's say you produce a hundred dollars worth of energy. They take a hundred off your bill, right? But what they'll do is, is then five years later when everybody's already installed it, they say, hey, actually we're only gonna give you 50 cents on the dollar. Oh, shit. So you produced a hundred, you're only gonna get 50 off. And they can change that whenever the heck they want. Yeah.
48:53
So it's like, like what? They wanted the adoption and then they're like, oh shit, how do we make money? You want to be in a state where you're like certain you're not going to get like screwed. So I don't want to tweak or add on, but just battery storage instead of like your typical backup generator. I'm not an expert on it. So I don't want to speak to it. That's whole point. have to throw it There's a, there's allegedly an incentive right now. So I guess underrated cause most people don't know that. I didn't know it till recently. it through the utility company?
49:23
I don't even know. think there's a federal tax credit somebody was messaging. People just DM me about incentives. Stay tuned for future. We have a friend, I'll tell you later, who just bought land and part of their prem investment thesis is they're gonna put these big batteries on the back of the site and solar panels are gonna store energy.
49:41
And it's like near the grid or something. I mean, you look at all these AI, the files are in the computer. This is going off the rails. It was taking up all the money, all the energy. Now it's the AI data centers that are going to need all this energy. So like entire towns worth of energy for one.
50:09
I'm gonna go now. ah Ducted heat pumps.
50:16
Overrated.
50:19
adds risk.
50:22
to the deal and you can get great cassette ceiling things that look cool. Okay. Yeah. Like, you know, I'm doing, I'm doing a ERVs in my project right now. Naturally you have to have ERVs. Am I right? Yeah. Yeah. It's like, yeah. Whole building or in unit. So in unit, but even beyond that, um, they're not ducted. They're just through wall. So it looks like sort of like a, I want to say a suitcase, but it's nicer than that.
50:49
but it's 60 inches above the floor, a foot away from the corner wall. And you want to do it in the living area if you can, but you can put them in a bedroom and it does up to 85 CFM and it costs, I think, you know, the pioneer one I'm buying is like $1,500. But what's really nice too is like there just doesn't take up space. And then you don't have to tie it in with the rest of the duct work. it's, uh so it's literally like an old school, it's almost like a ceiling fan that just gets ducted. there's in picture suitcase.
51:17
And on one side of the suitcase is an intake and the other side is an exhaust. And on the front is like a nice panel with a filter and an LED screen and you have a remote control for it. And that's bringing in fresh air and exhausting. And it's just right on your exterior wall. yeah. That's incredible. I need to see that for me because that sounds sweet. This episode brought you by California closets. ah It's been awesome hanging out with you guys. Charles, thank you for flying in from Florida. Yeah, we really appreciate it. This was a good one.
51:46
Yeah, I enjoyed this man. This was so fun guys. Thank you so much. wants a free energy model. Seriously, literally give them away for free, strings attached. How do they get attached with you? You get an energy model and you get an energy model. Find me on LinkedIn, Charles the Jagger or uh email me at Charles at energycreditconsulting.com and yeah, I'll give you free energy models and you'll get the lowest cost path to energy code. Beautiful. Wow. Boom. Appreciate it man. Thank you so much. guys. Thanks for listening, rating, reviewing, subscribing and we'll catch you on the next one. Cheers. Later.