The Dallas Builders Club
Real Builders. Real Investors. Real Deals.
The Dallas Builders Club Hosted by Award Winning Real Estate Investor and Builder Carl Dean along with his partner Mathew Smith, helps clients, investors, and builders grow and learn from the mistakes many of the pro's have made before them. You will learn investing strategy, building strategy, operations and efficiency tips as a builder, how to target the right markets and select the right clients. We will have special quest builders sharing some of their hardest lessons learned as well as vendors talking about their expertise and ways to improve process and profitability for builders all across the US. This show is NOT just for Texas builders, we will have builders and guests from all different high end luxury custom home markets throughout the US. Our goal is to entertain, be REAL, and help others in the space be more efficient, more profitable, and make less mistakes.
The Dallas Builders Club
Dallas Builders Club Ep. 8 - Biggest mistakes new builders make when selecting vendors.
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SPEAKER_01I'm I'm I'm back in action.
SPEAKER_00Back in action, baby. After a good little hiatus.
SPEAKER_01Yeah, it was nice.
SPEAKER_00Screen time was less than 30 minutes a day, which is impressive.
SPEAKER_01Phone was face down and on vibrate, and there was nature and deer, and it was chill vibes. Um it's good. It's awesome.
SPEAKER_00Where'd you go?
SPEAKER_01You went to I just went a couple hours north of here. I got a buddy that's got a cabin in Oklahoma. So Broken Bow. Uh yeah, yep. And uh was nice enough to let me check it out. So uh went and checked it out. Loved every second of it, never been out that way. Um, you know, we've been so busy just doing everything with the business. I I feel like uh I feel like I don't know what I don't know. You know, we're I mean Yeah, no, I get it.
SPEAKER_00You haven't had much time to explore. It's been it's been the wheels hit the pavement and it was off the races.
SPEAKER_01I mean, when you're you know, we're from Michigan, right? So it's like someone comes and they're like, oh, well, I want to go fishing, and you're like, oh, go to this lake, this lake, this lake. You've been all over because you grew up there. You come down here to Texas and then you immerse yourself immediately into uh the business, and you don't really have haven't had much time. So now I know that's a cool spot. It's pretty local. There's a bunch of things to do there if you're in the casino.
SPEAKER_00Yeah, it's a quick drive. Yeah, the casino, it's not really, you know, I'm not a casino guy, I'm not a gambler, but the casino is cool in its own round. Like it has like some cool shows and some bands and some great statues and some history of like the Indian people and stuff like that. It's it's it's a pretty cool casino.
SPEAKER_01I wouldn't, I would, I would go back. You can really tell like that's a heavy Airbnb area. Oh, oh yeah, big time. Um, and I feel like you you kind of got to step your game up because it seemed like all of these houses had so many things going on. I saw slides and saunas and hot tubs and and just yeah, the competition there for the Airbnb network is nuts.
SPEAKER_00Yeah. I mean, everybody's trying to outdo the next, you know what I mean? Like, well, what can we offer that they don't have kind of thing?
SPEAKER_01I mean, just there's a lot of supply, you know, so it's like what's what's setting you apart from the other person.
SPEAKER_00John Terrell, who's the former mayor of South Lake, he's got a development up there in Broken Bow. I think I think I wanted to say it was like 200 lots, and they're building a bunch of houses up there, and he's got a nice place. We went up there for a guy's weekend like two years ago, something like that, three years ago. I don't know, time's flying, but uh great time, man. Just just a just you know, surrounded by the trees and the forest, not a lot of mosquitoes, surprisingly. Uh, just a guy's group having a good old time. And it was it was a good, it's I like it up there.
SPEAKER_01Yeah. Something about, you know, I mean, the weather was great, sunshine every day, 90 some odd degrees. Nice. Um, but just that you totally unplugged.
SPEAKER_00You turned your phone off.
SPEAKER_01I saw you were ice bathing, you were sauna in. Yeah. I mean, you you know what's funny is actually look that place looks a lot like home. I mean, I saw pine trees and I was like, Yeah, oh, yeah, it does.
SPEAKER_00The the forest and whatnot.
SPEAKER_01It definitely has a Michigan kind of like yeah, Midwest forage. Must be a super cool place to go to in the fall. I saw a bunch of people were renting four-wheelers and uh the side by sides. There was trails, very, very reminiscent of home.
SPEAKER_00Did you see the uh sasquatches everywhere? It's like a big thing up there.
SPEAKER_01Yeah, I guess they filmed a few episodes of Finding Bigfoot there. Yeah.
SPEAKER_00Um, that's why interesting.
SPEAKER_01That's like it's a whole thing there.
SPEAKER_00I I noticed like every gas station, every place you go, it's like there's all these Bigfoot things, and it's like, okay, cool.
SPEAKER_01Should we address the elephant in the room? Sure. What's the elephant?
SPEAKER_00Oh, the mustache? You have a mustache. I knew it, dude. I knew it. Yeah, you know, I know that I look cringe with a mustache. Uh, I picked up my kids on Wednesday and had them until Monday. And on Wednesday, my kids and I were playing around and they were like, well, I think we were watching Riley Green or something on TV. We were watching music videos, and she's like, I like my daughter's like, I like his mustache. Can you do that, Daddy? And I was like, okay, cool. And I tried a different couple different things. I did the handlebar first and then did this, and I kept kind of trimming it. And I was like, okay, look, I'm not seeing anybody for six days. I got my kids, I'm gonna do this, and like by Monday, it'll be better, at least. It's trust me, it's better now than it was when I did it on Wednesday because it was like you can't hide your butt chin. I I've at least got a little bit of stubble here that's helping me hide that. But so you were going for you were going for Riley Green. No, and no, I just just uh bored entertaining my kids.
SPEAKER_01You look like Riley Green's camp counselor.
SPEAKER_00Yeah, yeah. I look, I look uh hide your kids.
SPEAKER_01No, I'm no, it just it's not something that's really me, right? It doesn't feel like I feel like some people if you have I I some people can pull it off. I mean, like of you know, and then some people can. I mean, I hey listen, I'm I'm with you. I used to rock one, it's terrible. I need what I have going on, and I don't know what else to say about it.
SPEAKER_00I feel like a macho hair is a guy's makeup. I should have, I should have like left like I noticed that Riley Green has this little thing here. The soul patch? Yeah, so he's got that, and then he's got this thing here. Maybe I should have done that. I don't know. Just go back to what you were doing. Yeah, so I'm gonna.
SPEAKER_01No, we talked about this last night. You could you could let the beard come in how you normally take it, which is what I'm gonna do.
SPEAKER_00I'm gonna let the put I'm gonna let this go for a little bit, and then I'm gonna let this come in like it normally does, and I'm just gonna see how that looks. Because again, I'm you know, I get so bored, right? I'm probably gonna grow my hair out again, just not not like nothing crazy, but just show the locks. You know, the the grays show big time when I have short hair, and so you know, I'm trying to stay young.
SPEAKER_01I remember last year's uh fantasy football when I lost that bet to you for whatever week it was. I don't know why I'm such an idiot. I bet you that whoever lost had to shave their face because I know we both look terrible with a and I not just shave, I meant bick. Bicked. And my problem is is when I and I will never do it again in my life, uh bick my face. It I mean, it was like two weeks until I had stubble back, and I looked like a naked mole rat. I was I mean and like I'll never forget the first time you step outside, like just feeling the air on your face. Like, yeah, it's weird. I felt I looked terrible, I felt terrible, I didn't want to go to any meetings, or I I was like, this is the worst bet ever. Yeah, well, I'm glad I won it. I'm glad I won it.
SPEAKER_00Yeah, it was glorious for you.
SPEAKER_01I would bet it again, but I took the first swipe with the razor, and I'm like, I've made a terrible mistake. Yeah, I didn't, I I know how you feel. Like I wanted to shelter myself in some house.
SPEAKER_00Yeah, I definitely didn't feel uh I'm not feeling too attractive, but it is what it is. Who cares? Yeah. I mean, listen, you don't need that kind of distraction. Something we, you know, so the only way I get Matt to come out of his comfort zone, this guy would be a recluse if I didn't force myself on him. We've been best friends forever. So like he got home from his vacation, I didn't bug him the entire time. You know, he got home on Sunday. I didn't bug him on Sunday. I knew he was getting, I know how his brain works. We know each other so well. I'd say Sunday, he's getting situated, he's gonna get you know comfortable. Monday came over for some work and we didn't really get to talk too much because we were just it was work, work, work. Uh Monday night, I went, I just stopped by the house. Yeah. Because I know you. Like, if I don't just stop by, you're like, oh, I'm just getting ready to lay down. I'm like, no, no, no. I know you're over there cooking ground beef and sweet potatoes. I'm popping in on your ass. And and again, I planned on being there for five minutes. I was there for two hours, right? And we just get to chopping it up. And one of the things we were talking about that I thought was a good thing to talk about and bring up today was like how you go on these vacations or you go on these getaways or whatever, you take some time off from work, and then you're getting ready to get back in the saddle, and you know, you know, you've probably got four or five hundred emails that are gonna pop up on Monday morning. You gotta get you got to get back in that saddle, right? Like you go from completely shut off, tuned out, to jumping back in that saddle. And for you, you were talking about it's interesting because Sunday night is like you're thinking about, oh, I gotta do this, I gotta make sure I plan this, I got this guy coming out. Oh, I gotta make sure I call him, da da da da da. And you start to get that like nervous jitter. You get the Sunday scaries. The Sunday scary thing.
SPEAKER_01Even even when you own your own business, you know? Yeah. I told you I had a dream about our framer. Yeah, that was it. Yeah, and I'm like on Saturday night leaving, leading into Sunday morning. I'm like, I'm like, I woke up in the middle of the night, I'm like, why am I dreaming about Ivan?
SPEAKER_00See, and that's the weird because my brain doesn't work like that, right? Like, honest, honestly, like I I could go on a vacation and I could come back Sunday. It doesn't matter what time I come back. I do not think about where I don't look at my emails. I mean, I I might skim my emails throughout the weekend, like we both did. We mentioned that. We saw a couple emails, we're like, I'm not dealing with that right now. Yeah, because if it's not urgent, I don't care. It's just my personal time. I need that time to reset. But like, I don't have those Sunday Scaries thing. Like, I just go to bed like a baby, and then I wake up in the morning and do my thing and go through my morning routine. And it's like once I get that cup of coffee and start walking towards that dining room table, I know it's I'm buckling up. You know what I mean? I'm taking my vitamins, sit down with my coffee, open that laptop, and I am saddles on. I start making my list. Here's the five most important things how we're gonna make some money, what I need to follow up with, boom, boom, boom, boom. And I'm just back into side. I just completely can shut that off.
SPEAKER_01I don't yeah, I I mean everyone's different, but I I definitely get like you can't help it. I couldn't help what I was dreaming about. Our framework, I'm like sleeping and I'm like, shower niches.
SPEAKER_00Ivan Cemetery's like, that's good.
SPEAKER_01Yeah, right. Um, but uh, and then even when I came home on Sunday, I had a little bit of downtime, and I'm like, well, let me just do sometimes. I like to go in my email and just I think I had like 60 or 70 emails. I just wanted to see if there was anything high level. And the moment my laptop connected to the internet and uh Outlook populated, the first email I saw was from the attorneys, and I was like, click, boom, shut the laptop. I'm like, forget it. Yeah, because they were going to be yeah, I it instantly like started stressing. It put me, it put my nerve.
SPEAKER_00Like I was chill, and I'm like, that's why I just don't even. You know, it's funny is I told you this too. Like, I opened it, I saw that same email because it's about this development deal that's in litigation and blah blah. It's a whole cluster. Um, and I saw that same email, and I immediately was like, nope, not doing this. This is this is Monday. I'm not gonna let this do my day. And I literally thought to myself, I hope Matt doesn't check his emails because he's gonna see that and it's gonna, it's gonna, it's gonna mess up his day. Like, I don't want him to think that I'm stressing about it because I'm not, it's gonna get taken care of. And it did, and it didn't stress about it. 500 emails later, it's like, okay, we're all on the same page. Let's go, let's move together and hold hands.
SPEAKER_01Like it, it's it's just one of those things. And for me, like uh when I so I'll wake up on the morning, Monday morning, whatever. It gets better as the week goes on because I get a I get a grasp of things, but Monday is always so much unknown in our industry. Um, you know, so I'll wake up on Monday morning before the gym, and and the we talk about the gym all the time, but the gym really helps me with that. I I go see all the people that I like, you know, have some laughs, get a good workout in, and I don't know what it does, but just kind of when I come home from that, my body's like, all right, like it's it's game time. Yeah, and it's not so much, it's just like uh whatever the day is gonna throw at me, I'm ready for. And I and I notice such a drastic difference. God forbid, this is how messed up people can be. But it's like if I if I decided to sleep in and miss the gym, my whole day would be just different.
SPEAKER_00Yeah, I know. I would feel like I never truly got a grasp on I know. It's almost annoying to be around you when you don't go to the gym because you're just like you're just out of sorts.
SPEAKER_01The mind is the mind for especially for different people.
SPEAKER_00Well, you're such a routine person. Anything throws a rent monkey wrench in your routine and you, you know, you start to do one of these things, right?
SPEAKER_01Because I'm like, yeah, I don't know, losing control or or or whatever it is, but all of that stuff is is yeah, I'm very uh routine, methodical, whatever you want to call it. Where and and that's just hilarious because you are not.
SPEAKER_00So I couldn't be more opposite, honestly. Like look, I do have my morning routine, but like I kind of like, and even with my kids, I love when something throws a monkey wrench in my routine because I'm so built for that. Like I'm built for just such chaos because I've had it throughout my whole life. I haven't had a bunch of routine. I was always a new kid at school every single year, new school, new area, new rental house. Like, I've just always been thrown outside my comfort zone so much that like it's just like and so I try to actually do that to my kids. I mess up the routine all the time. Like, I don't want them getting so embedded in the same routine. You know what I mean? So I kind of throw them off and I'm like, oh, today we're wearing t-shirts to bed and da-da-da. And they're like, wait, no, where's my jammies? I'm like, no, dude, just relax. Yeah, it doesn't always have to be a specific, rigid way. And I think that's good that you should people should be teaching their kids more of that.
SPEAKER_01I think you're right. I and I I notice with this industry, it's very hard for things to be routine with the things that happen in your personal life. It's very things for so being a person that comes from that mentality, and also a lot of my family come from that mentality. I can see that the more that things get kind of shaken up and things don't go like your routine, you you do get catless to that and you get better at handling those types of things. So, you know, we we've talked on previous episodes about stress management and compartmentalizing and all those things. Like you, you can you can get better at that. Oh, 100%. So it's good because like you talked about, you're like, you knew last night, like I would be at my house cooking dinner. I think when you walked in, I was going through some emails, and yeah, if you wouldn't have came over, I'd uh finished up whatever I was doing and gone to bed. Yeah, you know, but you came over and we chopped it up and and it kind of switched it up. And and me, I'm the type of person where it's like after you left, I'm like, well, I'm glad he stopped by.
SPEAKER_00So exactly what I thought. I'm like, well, I'm glad I did because he needed that.
SPEAKER_01But when you walked in, I'm like, huh. I know exactly.
SPEAKER_00You know, that's why I tell everybody, they're like, We don't understand your guys' friendship. But you're like, I don't you don't understand it. I have to force myself on him. Yeah, like he's my best friend, I'm his best friend, but like, you know, we both live in our own worlds, right? We're not the same person. We live in our own worlds, we have our own struggles. You're going through your own stuff personally. You know what I mean? And it's like, if we don't, if I and I know if I don't force it to happen, we'll both stay like this. And so I'm just like, you know what? I'm gonna go there. And again, I had the intention of staying for five minutes and just chopping it up and getting the the rundown on how your thing was. And we ended up having so much good conversation for two hours. And I literally left your house. I said to myself, I'm so glad I did that. Like it felt so good because we don't we don't really sit down very often and just just hash things out and talk about things and just kind of collect our thoughts. You know what I mean? Whether it was about work or about this. I mean, we talked about a million different things last night. Uh it's nice, you know what I mean?
SPEAKER_01Yeah, I notice as I get older, I you know, I'm I do consider myself like a quiet observer. So I am constantly watching people and how they handle situations and things like that. And I I do notice I am very I like people who are very like spontaneous, very uh like it's a quality I look at at people where they're like, oh hey, uh look at that thing off the side of the road, hurry up, stop, and like go check it out. And it's like my knee-jerk reaction is like, no, we gotta get there. But then it's like you go and you check it out, and it's really cool.
SPEAKER_00And you just you need somebody that breaks you out. You're attracted to that.
SPEAKER_01It's like that that you never know what you're gonna get yourself into. And some of like your best moments or your or or great times come from being spontaneous. So naturally, as a person who's not that way, I'm I I I watch people who are that way, and I'm like, oh cool, I want to move like that a little bit. Yeah, yeah. Uh those are the best people, by the way. Like spontaneous, like you're you're that way, like, especially with your kids. You're like, oh, there's a carnival and it closes in 20 minutes. Like, let's go. Let's see, you know, right now, like, let's go. And it turns into and it always turns into a great time. Yeah, good memory.
SPEAKER_00That's that's the thing, is you need you you kind of need that person. Like you said, uh, look at let's go look at that. And you're like, no, we're we're trying to. I don't like the accountant. I I need the accountant, right? Like, I'm so you're like, hey, why don't we let's rope it in and let's stay focused on the you know what I mean? So it's like it's a perfect yin and yang. It really is. We say this all the time, but um, yeah, it it's it's it's pretty good what we got going on here.
SPEAKER_01So we're talking kind of about uh you know who you need in your life, but let's talk about who you need in in what we do for a living.
SPEAKER_00So the the preface of this, again, we're meeting with our our our web design people and our back end sales people, and had a meeting this morning, and we're talking about what kind of content we need to be putting out. Obviously, we're trying to grow this coaching thing, and that you know, the pillar of that really is this this podcast and what we talk about on the podcast, and we're talking about how the funnel works and what we're trying to make sure the message that we're trying to get across, right? A lot of times that we're just talking about a bunch of shit, doing a bunch of shit, filming a bunch of shit, and throwing a bunch of shit online and going, something please go to, you know what I mean? But we're track, we're trying to um post content with more purpose and talk about things on the podcast with more purpose. Now that we're kind of fine-tuning things, and so yeah, we had the content pillars, which are things that we want to continuously talk about and do content on that are based around what we do and kind of like you know, as far as the coaching and just work in general.
SPEAKER_01Yeah, yeah. I'm what one of the things that I would talk to, or one of the things we do talk to with some of the coaching clients, and it's so important for you to build the right team when you're going through this. So um, you know, and I know you can elaborate on this a a little bit more, but um, you know, there's so many members of the team. You have your architect, you have your engineer, you have your builder, you have your lender, you have your real estate agent, and all of these people have a very important role in the success of your project. So, like for instance, this is always a great thing for people who are not familiar with building, but what is the difference between an architect and an engineer?
SPEAKER_00So, an architect is basically, and by the way, we we do not uh typically use an architect. So, down here in Texas, it's different. You don't have to be an architect to design a house. So a home designer can design a house for you, you can get it signed off by the architect, right? Um, but you don't need that. So you there's a designer, then there's an architect. An architect is a person that actually has a degree and is someone who's going to revise your plans or draw your plans or review your plans or just create your plans for you, you can hire an architect. And then an engineer is gonna basically look at what the architect or the designer has done and engineer it. So engineer is gonna say, you need this many trusses, you need this many boards, you need them to be this far apart. You know, if if you've got a tile roof on this house instead of every 24, you need them every 16, right? An engineer is gonna go in there. There's and there's a few different types of engineers. There's a uh an architectural engineer who's gonna look at the framing of the house. There's a civil engineer who's gonna look at the drainage of the house. So the pad, how the water is draining after you build this and add a garage and add a driveway and add a how's that water gonna disperse throughout the property? Um, and that one's very important. And then there's a foundation engineer who's gonna look at, you know, well, how big is this pad? Where is it located? What's the soil look like? Are we gonna need peers? Are we gonna do post-tension? All that stuff. Uh, and so they work together, but they're completely separate, right? Again, there's a designer, there's an architect, and then there's several different types of engineers. Yep. Three, three that we mainly work with. One of the questions you had in there was a really good one. I was like, it was something about like uh hig hiring your contractor. How do you know how to hire the right contractor the first time or something like that?
SPEAKER_01Like, yeah, yeah. That well, or the biggest mistake that beginners make when hiring trades.
SPEAKER_00Yes. I and that is such an easy one for me because it's just such an outlier. Like the biggest and absolute biggest mistake that you can make hiring vendors initially is hiring them based off of the price. Oh my god. Because everybody's gonna be trying to whittle and chisel and whittle and chisel to get you the price. And then when they realize they whittled it too much, they're gonna come back for more money. Or when they realize that this, oh, they're gonna, they're gonna have all these add-ons. The best thing you can do is talk to other builders about who they're using, what their experience is, and who's consistent, who's not nickel and diming you to death. I mean, we've got an electrician that we use who every single time is the lowest bid. We've got an electrician that we love that every single time is about $30,000, $40,000 more. Right. And every single time the homeowner, because the homeowner gets to dec decide this a lot of times, we give them the options and we tell them we would rather use this person because this person's gonna do X, Y, and Z. Every single time that that cheaper electrician nickels and dimes us to the very end, every little thing that we change, and it ends up being not far off, and it ends up being way more work for us.
SPEAKER_01Yeah. Well, I so in their defense, what I think is actually happening is I think that the more expensive electrician has spent enough time building custom homes in the DFW area that his estimates are padded for the changes that are gonna be. Because he knows what's coming. He knows. And it is always an easier conversation to have with the client when they're like, hey, I want to add cans here and lights here and this, that, and the other. And it's like no big deal. I mean, I remember one time on a job, I forgot, and this is with our more expensive electrician uh who's been doing it for a longer time. I forgot to run the conduit to the power and the island in the master closet. And he caught it when we were on an electrical walk. And I remember I said something to him, and he's like, Well, yeah, I gotta, you know, bring a uh I gotta bust up the concrete and you know, and run a piece of conduit in here. I looked at him and I'm like, oh man, I was like, is that expensive? And he's like, Well, not for you. And that was his way of saying, like, I got you. Yeah. And and I always appreciated that. Again, not to not to hurt or talk bad about the other electrician, but there would have been a line item charge for, you know, jackhammer, conduit, wire, labor, and it would have been a change order on the job. So with the experience that he has, he kind of knows he's like, hey man, this is an 11,000 square foot house. You know, there's gonna be things. There's gonna be things because let's face it, how many of the things on the initial electrical plan actually get once you're in framing and doors and HVAC vents and the client sees the house, they want to move things, add things, remove things. So, yeah, I mean, in the end, it's a much easier conversation to have saying it's you nothing is changing for you in your budget compared to, hey, we went with this person because they gave us a baseline bid based solely off of what was on your plans, which they're okay to do. But every time you want to add a can, and every time you want to, you know, there's a hundred and twenty dollar charge.
SPEAKER_00Yeah, honestly, I mean the I I would say again, just to just to kind of recap on that, uh, the biggest mistake that people make when they're when they're doing this and hiring vendors is they go for the cheapest vendor. Yeah, cheapest. I would say look at the product that you're building and then go in the marketplace and see who's building stuff that are comps and see who's doing that work. Yeah, because you want the guys who are consistently in these areas doing consistent types of homes the same as yours, right? The one thing that made me successful coming out of the gate is I worked for Atwood. I had all his vendors, they're all Southlake people. They all work in South Lake, they work for all the different builders in South Lake. There's like 10 builders that all use kind of the same group of subs. And that group of subs have been vetted in in in you know, whatever for 10, 15 years. And they know the routine, right? So it's like it's you're not trying to reinvent the wheel. When you hire a cheaper contractor, they're gonna nickel and dime you at the end, they're gonna make mistakes, they're gonna undercut their bid to try to win the bid, and then they're gonna come back for for more money. And then on top of that, you're gonna have to babysit them way more. Right. They're gonna have guys showing up drunk and high and fucking, you know what I mean? They're just you, you don't know what you're gonna get.
SPEAKER_01Yeah, and honestly, I don't think that people realize this, but like the good vendors, like you think of a good foundation vendor, uh, you you can't just call them and maybe be like, hey, uh, here's the plans. I need you to do this foundation. Like that foundation bill, that's a that's a six-figure bill. Yeah, they don't know you from Joe Blow. Unless you got someone vouching for you or they've seen you around, yeah. Like Blythe ain't gonna come and do a foundation for just anybody. No, absolutely not. And and to and to that point, also, if you were looking for a good foundation company and you didn't know where to start, it's like, man, hop in your truck at 6 a.m. Monday through Friday and drive around the area you're building and seeing whose truck. That's how you should be getting vendors.
SPEAKER_00Because then and then vet them. Say call the other builders. Hey, have you worked with this guy?
SPEAKER_01Because our I there's not a day I don't drive down 114, and I don't see that red with yellow lettering.
SPEAKER_00I know, black truck, and they're I did try to use another vendor uh in the past on a on a on a large house too. Um, and it was the previous builder, and we were trying to save some money, and we went with a different vendor, and it was a fucking nightmare. Um they they had a a cigar porch in the front, which if you think about a cigar porch, there's like a bunch of windows to the house, and then there's like a little porch that's like five foot deep and long, and it's got pillars here and here and here. And on that five-foot porch, again, five foot from the house was the the length of the porch, right? They had a five-inch drop. Oh, okay. So you were so you're sitting you're sitting in your rocking chair and you're all the way forward, like you're gonna fall forward. Like, I mean, it's like, dude, who who would do a five and a half inch drop on a five-foot pad? You're literally like this. Like, that just doesn't make sense. Not to mention there's a damn roof over it, so it's not like you needed that much slope in the beginning to begin with. So you just get into those situations where it's like it's just not apples to apples, and there is not a better uh uh example of this than with concrete. I saw one of the coaches, you know, doing videos the other day of oh, it's poor day. He had one guy out there scraping, scrapping, and then you look at the overview of the of the foundation when he showed it, and it was like squares of like blotchy bullshit. And you're like, dude, where's the guy with the big fan, like doing his thing, and like you know what I mean?
SPEAKER_01Like again with the coaching, again with the coaching program, I you we're we're giving away nuggets here, but that's the importance of the podcast. It's like if you, especially if you don't have import, if you don't have experience building, like one of the things would be if you're if yeah, it is. You need to you need to learn that those guys need to start pouring early, especially down here before it gets too hot. Oh, 100%.
SPEAKER_00Now, what and they need to have 20 guys out there.
SPEAKER_01Now, what what's happening? What happens when you don't know this? Like you get into a development deal, you don't have a coach, you don't have a mentor, or you've never done this before, you hire the cheapest concrete guy, and they're not starting until nine, 10 o'clock. You know, so it's like these, these are just every time we talk about this, I think of the little things that along along just the couple years that I've been doing this that I picked up, and it's just because it's one of those things where it got brought up to me one time and it was a conversation that was had. And it's like, man, they need to start early because if it gets too hot, like it doesn't, it doesn't work. I know, and this is your foundation. Like, you don't have to be able to do that.
SPEAKER_00Not just that. Remember, we did this, we we had this project, and again, one of the questions that we're gonna hint on a lot is just like knowing what to do and how to buy a lot, right? Because if you're buying a lot in an existing neighborhood and it's a flat lot and it's pretty self-explanatory, fine. Ideal. But yeah, that doesn't happen a lot, right? Especially if you go venturing out and it's you know, you're getting one acre lots. There is so much change in that lot that you don't see. I mean, hell, we bought a half acre lot off of Shady Oaks in South Lake, and we looked at it and we're like, flat, this is cool. There's a house there and everything already. No, there's eight foot of fall from the front of back to that lot. So, like the dirt work is a massive component. So we had this house that we were pricing out, and you know, we were a little bit off on the dirt work. We had a number that was like $237,000 or something like that, right? And the developer of the pro of the entire neighborhood came in and was like, oh no, I can get it done for you for like $175,000. And obviously, my our client who makes those that final decision is like, sure, I'd love to save $65,000. Well, they get the pad halfway done, and you know, they need about five foot more dirt on the lot. And they're like, Well, we we missed it, the number, and we need 65 grand. And I'm like, okay, well, you made 60 grand on this job because you made 20%. So, like, how much are you putting in towards that? Because when I make a fuck up like that, I know it's coming out of my pocket, right? I know I at least I have to come to the table and do something and say, okay, look, I messed this up and it was my fault. I'm gonna do XYZ. I'm gonna do something for you, right? I'm not just gonna say, hey, sorry, we need 60 grand. You know, that that's a that's what you get when you're dealing with guys that you don't control, that you don't have a carrot to dangle. I don't have more work for this guy. He doesn't know me from Adam, and he works for a different guy who's not me. Yeah, so like I'm not writing his check, he's getting it from this guy. So when this guy says, no, no, no, we need 60, it's you're you're stuck in between a rock and a hard place. What do you do? Nothing. My client now has to pay more money, matching what he would have paid with us, we would have had it done faster. We would have been more, you know, all the things. And it's just an unfortunate situation. So I just want to go back on that, right? When you're dealing with these vendors and you're pricing up vendors, you want referrals, you want to talk to builders who are using these guys and say, what do you like? What do you not like about them? Do they nickel and dime you? Do they call you a million times? Do they make your life hell? Do they are they unorganized? Like, you want to make the least amount of calls as possible. You want to know that when I call Joe Blow, he's gonna handle this from A to B, and I'm not gonna get bothered unless it's something that's and it's gonna be a quick and easy text with a photo or a video, and like, hey, what do you want to do about this? And it's a quick response. It's not a cluster with, oh, I'm gonna let's email him and I'm gonna leave the site and we'll come back tomorrow and let me know what you want to do. And then it's like, and then it just becomes loss in translation and delays.
SPEAKER_01Yeah, I would tell a coaching client too, is you have to consider, you know, sometimes also you can get in massive differences with how fast a trade is. And when you're paying juice on a construction loan, you the it it's a it's a big driving factor of your of your profit. I remember when we were looking at a job and we were contemplating possibly using another trim labor guy. And, you know, I asked him how long he thought he would be on the job, and he's like, Well, you know, he gave a great answer, but he's like, Oh, you know, I run three, four-man crew, is a job like this, probably like two and a half months. Um I was like, dude, I've been expecting two and a half weeks. Yeah. That's now if you were uh if you were an investor trying to do a spec deal for profits, I mean that's if it's two and a half months compared to two and a half weeks for a trim, two months of the construction interest.
SPEAKER_00And you're paying interest on framing and foundation. You've gotten pretty far.
SPEAKER_01Your payment's five, six grand. I was just gonna say, you're probably looking upwards of five thousand to somewhere between five and ten thousand dollars a month in an interest payment at two months. You're you know, you're looking $10,020,000.
SPEAKER_00Whatever you save by using this guy, you just wasted because he was too slow.
SPEAKER_01Yeah. So, you know, you really have to consider these things, and those are those are things that we talk about, you know, when we talk to our clients who are building these houses, is you you gotta be weary of that. It's a normal question to ask a trade. Hey, man, by the way, how how long do you think you would take on a project like this? Don't don't forget to ask that because you're gonna ask them every other question, and then they get in there and all of a sudden you're checking on the job like day three, day four, and you're kind of the math starts clicking and it's too late. You know, you're like, man, how much longer are you gonna be on the job? He's like two months.
SPEAKER_00Yeah, that's that that's the thing. You really do. There's more questions to ask than just pricing. Yeah, right? What's your time frame? What's your crew look like? How many guys are on your crew? What time are you gonna pour? Like, you just you really got there's specific questions you need to ask. And you might not know those questions, but we'll help you in the coaching.
SPEAKER_01So would you I have a question? If you were somebody who was doing this on their own and they're getting into real estate development, would you GC the project? Would you GC your first project on your own? Saying, let's say you have no not using your experience, like you don't have previous construction experience.
SPEAKER_00Am I working a full-time job or am I do I have money and I'm sitting here like I'm gonna learn this new thing? Because that's it.
SPEAKER_01Yeah, let's give them, but let's say that you you have money and you're trying to learn this new thing.
SPEAKER_00Yeah. Me personally, because I'm a big believer in myself and like I like to figure dissect things and figure it out. Same reason, like I'm so involved with the podcast and all the back end stuff. Yeah, I really like to dive in, get my hands dirty, even if I make mistakes those first couple times and learn it. But I'm always gonna like I would never do it without being able to phone a friend. Right. Right? I gotta have Chase or Heath or some of these other guys, Phil, to call and be like, hey dude, I'm here and I'm stuck and I don't know what to do. But if I didn't have that support system, because I'm a builder and I've been if I didn't have that, I still think I would want to GC my job. But I'm telling you right now, knowing what I know, it would be way more expensive, way more time consuming, and way more of a headache. Yeah. Because you're learning as you go, and that is a very, very expensive thing to do in this business.
SPEAKER_01Yeah, and also with no previous experience, you really don't know if you're being taken advantage of by your trades.
SPEAKER_00Oh, that's you'd be the new guy in site. I have been in construction my whole life, so that's so you'd be the green guy. So it's very easy. If I was green and had no idea, it's very easy for you to go on a job site and you'd be like, no, bullshit.
SPEAKER_01No, that's not how we do this.
SPEAKER_00Yeah.
SPEAKER_01But if you don't know what you don't know, it's very easy also for the trades to be like, oh, this is how we do it. This is how that's supposed to look.
SPEAKER_00Yeah, but at the same time, if like let's say I'm I'm uh phase on or I'm one of our clients, right? Who didn't have a full-time crazy job, right? Taking up my time and I had time and I wanted to build my own house. I would much rather pay us 25 grand for coaching and help me walk through this step by step than pay a guy three or four hundred thousand dollars to build my house. If I have the time, I'd love to learn how to do it and manage that process with the help of somebody like knowing I could pick up the phone. You're gonna give me the sheets, the underwriting, you're gonna give me the step by step. I feel like anybody who just wanted to build their own house, paying us the the fee for coaching, yeah, is way better than it's cheaper than a PM.
SPEAKER_01If you have the time. I mean, you'd have to pay a the you the cheapest PM ever would still be sixty to seventy thousand dollars or something like that. And that's that's yeah, and that's not even you know that's a very rookie PM.
SPEAKER_00Yeah, most of your PMs in this area are making a hundred plus figures. Yeah, yeah. Every single PM that I know that's building multiple multi multi-million dollar homes is making well in six figures.
SPEAKER_01And it should be because it's it's a job that requires that you you you have to have experience. Yeah, it's like it's like there's no crash, there's no school for this. Like, I mean, there is you can go to school for construction, don't get me wrong, but I just don't know how well it translates to.
SPEAKER_00No, nothing in school translates as well as what it does in the actual world.
SPEAKER_01Yeah, right, rolling up your sleeves and doing actual stuff. So basically, I what we've said is if you're looking at your first real estate development deal, like the most important people. I also think about you know, you you are gonna want to probably have a relationship with a lender and a relationship with a real estate agent.
SPEAKER_00The lender is a huge piece, a huge piece. Um, because the more value a lender sees in you and your future production, the more leeway they're gonna give you, right? When I'm sending my lender client after client after client, and then I need something, you know, he's gonna he's gonna figure out a way to get it done. So, yeah, hard money lender, regular lender, doesn't matter. You definitely need a good lender in your corner before you start this process. The first thing I do to the coaching students when they first come in, get with my lender, give them what you got. Let's see what you can qualify for. Let's see, based off the income that you have, but the money you have, like what can you qualify for by yourself? And then from there, we'll figure out do we need to raise some more money? Do you need to bring in some partners? How do we need to make that look? Maybe we put two coach coaching students together. They both got 200 grand, now they have 400 grand, and now they're gonna make a ton of money on a house. Yeah, but you you you gotta figure that out. And then the uh of course, everybody wants to hire their best friend as their real estate agent. And I cannot tell you that is just not the move. You know what I mean? It's not the move. You you want you want to figure out who the real estate agent is in your market doing the most volume of the type of product that you're selling. Because for every house that she sells, she toured 10, and I say she because most of them that I know are females, but there's she or he, whatever. If they're selling a two million dollar house, they show that house to 40 people, and then one person buys it, okay? And then they're on to the next deal. Well, guess what? Those 39 other people who didn't buy that house are still looking for a similar product. So they have multiple people in the hopper looking for your product versus your buddy Jake, who doesn't know his ass from a hole in the ground, he's just trying to get his first deal. He's out here pounding pavement trying to, you know what I mean? It's just like you want to be dealing with the top-tier agents. You can have a massive gap in the world. Don't do favors for your friends out of the gate. No, there's you can do favors for your friends once you're established and throw them a deal or whatever the case may be. But when you're coming out of the gate, like you've got to have top-tier people as far as the people who are selling your deal.
SPEAKER_01It's and it's it's such a relationship piece. I think about um, you know, we had a friend of ours that built a house with us and then they were selling their previous house. And I remember we're very close to these people. So they had gone with their previous real estate agent, I think that maybe helped them buy the house and they listed it as a price. It was, you know, I mean, whatever, and the house sat and it was showing after showing after showing.
SPEAKER_00We gotta paint the wind, we gotta do this, we gotta do that.
SPEAKER_01And then the entire time, the entire time that we're kind of listening to them, you know, complain about this, we're like, hey, you know, let's let's get you with our realtor. Let's get you with our realtor. Use genie. Yeah. So then what happens? They take the house off market, I think over the holidays, and then they end up going with Jeannie. Jeannie comes in, tells them what price to sell it for, tells them what they need to do. They had to do some paint and correct some things. And and I'm I'm I could be on a miss on this, but I feel like it was like a week or less than a week. And they had a full price offer and it was no more showings, no more.
SPEAKER_00We should have listened to you sooner. We should have listened to you sooner. Like, yeah, because you're sitting there for months thinking about renting it out, thinking about this.
SPEAKER_01It's like it's a relationship networking piece.
SPEAKER_00Exactly, exactly. And I'm telling you, these people, I mean, they have they have we're we're we're in a market where people are spending four or five million dollars cash to buy houses. You may have a house for sale that somebody wants to buy as a rental. You know what I mean? If you got a house under a million dollars in trophy club, she might have a dozen people that are in line waiting for hey, when a rental property comes up in Trophy Club or anything under a million dollars I can buy and rent out, let me know because the values are escalating, the prices per rent is. I mean, it's all about the exposure.
SPEAKER_01You know, if you're going with a uh uh like a Roxanne or you're going with a genie, like you're you're you're gonna have that exposure. She's got people in her pocket, she's got people in her office, she she's in all the circles, they've been doing it forever. Yeah, like your house is gonna get exposure. If you're going with the person that decided that they didn't want to be an electrician anymore and they went and got their real estate license, and I get it, you're trying to be nice and you want to help out a friend. Unfortunately, it comes at your cost.
SPEAKER_00Exactly. And risk.
SPEAKER_01So the the lender and the real estate agent, if you're getting into development, is a super important relationship right out of the bat. And it is a it is a relationship-oriented circle. Like even with your banker, like that you're gonna build up rapport with them. And the more you do with them and the more successful execution you have with them, it's gonna be easier to do future deals.
SPEAKER_00Exactly. That's that's another part of the coaching, is like people are like, well, the lenders won't give me any any money because I don't have any experience. They're not tell them that you paid us, paid us the coaching fee and we're gonna be coaching you through the deal. Yeah, you have our script, you have our underwriting templates, you have our draw sheets from the bank, we're gonna help you through this. And then they're like, Oh, yeah, that they said that they'd do it. Yeah, because you're you have a good consultant that they feel comfortable with.
SPEAKER_01You have no systems and processes. It's not as it's you know, doing these real estate deals is not like going to get an auto loan. Like they're not running your credit, getting a pay stub and saying you qualify, you don't. They're you know, they're putting these deals in front of boards. Yeah, there's wiggle room there. There is uh they're they're looking at these from a very uh it's not it's not black and white, is what I'm trying to say. So they're looking at you, they're looking at your history, they're looking at your ability to perform, all these different things. And honestly, you can sell it to the banks. They are open-minded. Uh, so you know, you just need to have someone in your corner that knows how to put together a pitch. So then that way when they go and they meet in front of their board or whatever, they with confidence can go up there and say, you know, here's what they've done before, here's what they're working with, here's their systems and processes, here's their timeline, here's how they're gonna get it done. Like it's all all the underwriting is done. This is a home run. Yep, yep, you're right. Otherwise, you're going in there blind, they don't know you, and they're like, Well, we're not gonna risk this. This guy's asking for a million dollars to build a house. We don't even know if it's gonna work out.
SPEAKER_00Yeah, exactly. And he has no, he's not a builder. Yeah, you know, so dude, we're dropping nuggets today, boy. I tell you what, um, that's it. That's about it. We're gonna we're gonna wrap this up. We're at 38 minutes here. We got some good stuff for you guys. Hopefully, uh, we've got some good sound bites for social media. Um, but yeah, check us out on Instagram, Dallas Builders Club, uh, DFW Custom Home Builder as well, is our build page. Uh, we're on TikTok, we're on all the things. So give us a follow, check us out on Spotify, listen to the podcast, give us five stars. This is where we start asking everybody to hey, give us a like and five stars and share the podcast. You know what I mean? It's like we got a few episodes out there now. Appreciate it. Yeah, I think there's episode seven. So we do appreciate everybody who is supporting. If you're listening to this podcast and you're hearing what I'm saying right now, you're probably pretty committed because you listened to the entire episode. And we just genuinely 100% from the bottom of my hearts, we really do appreciate you guys following us on this journey. And you know, sky's the limit. So we're gonna keep on keeping on, and uh, we'll see you guys next week.