#138 – Owner’s Rep with David Carbajal
Hello, and welcome to another episode of the construction corner podcast. I'm Dylan, I'm your host. And we've got a great episode. Got a wonderful guest today. We're going to talk all about development before we intro our guests, Matt, my blue collar. Bad-ass how's it going?
It's going fantastic. Dylan, another busy week here in Southeastern Michigan.
And just because we talk about the damn weather, every show I'm going to do my quick update that, uh, right now, Michigan is absolutely not trying to disappoint. Uh, we've had two days in a row of nice sunshine. So just before we came live, I got the flash flood warning on my phone. So we are in for another, a downpour.
It seems like any minute,
if, uh, if we could ship your water to California, then I think we'd all be in or to the west in general, which is, you know, all on fire right now. I think we'd be doing really well,
but we should work on that
or even to Canada and put out all their fires, uh, Canada, Idaho, Oregon, California, and they're all burning right now.
All right guys, without further ado, I'd love to introduce our guest. David Carvalho. David is a developer been in construction for over a decade, just a ton of great and spirit experience and being an owner's rep and on the GC side and now kind of leading and doing his own, uh, development thing and getting into where he's, he's owning it and doing the projects themselves.
So I'd love to have David on and really from an owner's perspective on construction, what's going on in the industry, how we can improve. Uh, you know, now we've got all three, I think, sides of the table, uh, present in this conversation. So David, welcome to the show. Yeah.
I'm so happy to be here. Thanks for inviting me to the show.
Um, you know, Dylan and Matt and I have had several conversations, I think, you know, we always have to cut them short because we could go on and on about all the different topics. And we're all very passionate about each, you know, aspect of the industry that we deal with. Uh, I've been in and it's crazy, you know, I'm 34 years old, but I've been in construction in the industry for about 20 years.
Um, I started in high school. I elected to run with the technology of construction as my elective. I went to technology based high school. Um, so from there I went straight into college and got my degree in my bachelors in construction management and engineers. Um, from there, I worked and interned with a large national general contractor, um, total for about 10 to 12 years.
Um, you know, work my way from project engineer or from intern project engineer to project manager, to senior project manager. And then I went in kind of stepped up lateraled over to the owner side, uh, became a owner rep, um, for a. Nationwide developer that focused predominantly on hotels, uh, select service type hotels, uh, you know, going after that business traveler.
Um, although the past two, three years, uh, the focus had started to kind of evolve into the leisure travel market. We did some properties in Santa Monica, California. We've done some stuff, you know, heavily these past two years, like. And as of late, as Dylan mentioned, um, you know, I've taken, I've had a lot of experience and gone through a lot of different challenges, um, kind of adding up the total base of projects.
I've done it. It was coming up to about 800 million, um, you know, predominantly in new construction and I've got to learn so much, you know, getting into these big, very challenging. Uh, projects that I felt, you know, not only for travel, I have two young kids. Um, I have a son who's four years old and I just had a daughter.
She is now four months old and travel's tough, you know, and it's it's necessary in construction. Um, especially if you're working for a larger type corporate development company. Um, so I wanted to take things into my own hands and, and start to do my own projects. Um, I'm doing some residential. Uh, coming out here in Southern California, um, probably first quarter of next year, I'll be done with the first batch and I'm also doing some, some hotels up in the wine country.
You could call it. I know Dillon you're really in the wine country, but I'm out in Temecula, California. I'm working on some hotels out there. And, uh, yeah, so I've kind of taken the experience I've had and, and now I'm transitioning that into my own project. I'm also going to get, and I may be filling up my, my plate here too much, but I'll deal with it as it comes, but I am getting my GC license, um, within the next month.
And I'm going to, you know, paper GC or GC, some of these smaller homes, um, that I'm doing just to keep things in house and keep it tight. It helps a lot with the margins and control of product and, and whatnot. Yeah. I don't know if, uh, tried to go through it as quick as I could, um, there with my background and history, but, um, yeah, happy to be here.
Well, I'm going to jump right in. Cause that was a lot of, a lot of awesomeness to unpack there, David. Um, first of all, congrats on the new baby and, and that that's awesome. Um, I've got three kids in my own, so I, I know the feeling that same week, same with the travel man. I spent about seven, eight years traveling.
Upwards of five, six days a week. And it, it wears on you man, especially with a, with a young family. So I totally get where you're coming from on that side. Um, I will say too, you're kind of living the, the typical general contractor is dream, I think, right. You started off building for other people and now you're transitioning to, uh, to the owner side of the table, but now you're kind of getting back.
It sounds like to build and for yourself, Hell. Yeah. That's, that's what we're all shooting for in some capacity. So it, it sounds really great,
man. Yeah. And you know, it's interesting too, because like you said, I started as a general contractor and then I went to the owner side, hiring the general contractor, and now I need to go back to the general contractor roots and kind of re-remember what I learned or from.
Uh, to be both a good general contractor and a good owner, because there are definitely such things as, and I've learned this as a bad owner. Um, you know, when you're indecisive, when you keep changing your mind, I mean, it's just costing tons of time and tons of money on every project. So it's very important to me, um, just to realize that right out front and not to drive our consultants crazy as I'm sure Dylan.
You know, like changes that, you know, aren't easy for the owner to understand most of the time and are very frustrating when, you know, they think it can happen overnight.
Yeah.
Yeah. And in there, like it's, I think more, it comes down to education, right? Most owners haven't been through enough projects, you know, for the most part, right.
Owners are, they've done a few. Unless they've been in this for a game for a while. They haven't gone through enough processes to know what they don't know, right. To know those pitfalls, to know what, what needs to be done when decide design decisions need to be made. What is truly a change order? What's not, what's going to cost them, you know, time and money or what's not.
And I think it's, you know, I wish more owners were, uh, more educated in the process and I know they don't need to know everything. But having a, typically a better understanding of, uh, key design decisions will help the process. And I think that's for, for all owners, that's probably one of the biggest things that I just continued to see was, you know, they're, they're more tied up in the financing side of it and the money end of it.
And when's this thing going to open than like, oh, what do you, what do you mean? I need to decide on pink color or, you know, something. What could be seemingly innocuous to them, but holds up a lot of other pieces of the puzzle.
Yeah, no, exactly. And it's, uh, you know, it's one thing conceptually to say, but to actually implement it, like in the homes that I'm doing now, it's you have to reground yourself and actually do it.
Cause it, it, it makes so much sense. Like, oh no, these design decisions need to be made, you know, today as you're getting into, you know, the development of your. But to actually, Hey, wait a minute. Like, I know this thing, I gotta do it. You know, like I can't just talk what, um, you know, talk about it and do it.
And, uh, it's been fun. You know, another cool thing is that I've gotten my wife involved in the homes that we're doing, and it's something we've always talked about doing and having her she's always loved design and she's very creative. She went to USC film school and, um, you know, so she has like a very creative eye and it's been nice.
Get her to, you know, partake in the whole development of the plans. And, you know, I'm looking really looking forward to getting into these, but she helps me, you know, cause I'd preached to her. Like we need to get all this, you know, this the, I guess the layout all squared away and not make any changes late.
And then she's like, well, we better make sure we look at these, you know, conceptual plans, you know, with the fine tooth comb and get it. So I was like, oh, you're right. I got to walk the walk. Right. You know, not just talking conceptually understand it.
That's cool. You're bringing your wife and it's gotta be fun for both of you.
Um, and it's gotta be helpful to. To you, especially because construction as an industry is one of the highest stress industries out there. Right. And you're all of a sudden playing two sides of the table. So you've got like double the stress already. So, uh, having, uh, having somebody you're close with as your partner, like that has got to kind of help alleviate some of that.
At least at least you can vent back and forth to each other and, and know what each other's talking. Yeah. Not just like the angry GCU comes home and screams and yells for two hours about his day that no one else in the house even has a concept of what I'm talking about.
Yeah. The, or holding in all the stress, you know, and not trying to bring it home.
And for sure, eventually it ends up coming out in another way. So, yeah. And, uh, so far so good, I'm sure we'll, you know, increase our communication skills as the project progresses, but I'm excited and looking forward to it.
So in that, David, I mean, like you played, you know, two
real quick, you mentioned it. Oh, go ahead now. You're good.
Can you hear me? All right. Go for it, Matt. Great internet connection here today. So I wanted to touch on, on the GC license that, that you're working on. David. You know, we, we kind of talked before offline about this a bit, but in Michigan, there is no commercial level general contractors license period, which is bizarre to me.
Um, but, but kind of walk us through what the steps are. Cause I know in California, especially it's a, it's a pretty drawn out process, isn't it? Oh
yeah. I started the process four months ago, you know? Planning ahead and knowing that I was going to make this transition and it was imminently happening. Um, and I know exactly when it's happened.
Um, but I'm happy that I started in March. I believe, um, you know, getting the application submitted and, you know, it's just been a lot of back and forth and it's, it's, it's taken a long time. The application is, is pretty cumbersome itself. Um, asks for a lot of background. Um, kind of your history and experience and really what the board looks for is the guy that was swinging the hammer was a framer and apprentice.
And so it's a lot more challenging to get it, having the education, um, kind of background, you know, as project manager, um, hiring the guys that you know, are doing the physical labor. Um, so I had to walk through that. Uh, they had a couple of comments back and that takes another month. If they have a round of comments to get them back to you and then you resubmit them and then take some another two weeks to look at them.
So I had to, um, not massage as much. So to say it a little different word is be more descriptive as to what I've done. Um, you know, quality control over a lot of these trades. So I had to be specific on to, you know, An example, if they wanted more examples, um, some more references. So finally I got through that and then, uh, before I submitted the application, I went through a school and so they checked the actual name of the company and it needs to be aligned with the type of license you're getting.
Um, so for me, it's general building is what I'm going for. And so I, you know, the last portion of my name. Had development. And they said that that was fine. The school did. Then I got back word from the board and they're like, oh no, you need to be more specific. Um, you know, that's not going to fly. And in the front of my name, I had a steel rock was the name.
And that they're like all, you're not going to be a steel contractor. So, so I had to do a DBA, you know, resubmit. So it's been a very long drawn out process, I guess, is what I'm getting at. And now my test, it took another month after they finally approved it to give me a test. Uh, my test is in three weeks from now.
And a lot of it for me is just, you know, going through and refreshing kind of what I've learned. Um, you know, from the education side on, you know, all the codes, basic codes, you need to know a little bit of everything, um, which is good. Um, I'm actually happy that they don't just pass out licenses here. Um, You know, so it's been tough, but I have my test in three weeks and then, um, you have to pass with like 80% or higher, and then four to six weeks after that they'll issue your license.
So right now, for me, I'm like, I'm chasing the, the groundbreaking of these first three homes that I'm building, you know? So we'll see, we'll see where it ends up, but I'm pushing it.
So are you thinking. Shoved into a spot where you have to hire another GC at least temporarily, or, or is that an option?
Or I can do it as a, uh, owner builder.
Okay. So maybe my wife can get, you know, pull one permit as an owner builder. I could pull another one and I could find a buddy or my business partner. Who's actually doing this with me to do it. Um, but then you need to transfer it over. It would get a little more complicated. Um, but we'll make it work regardless.
We're building as quick as we can. That's the. There you go, non-stop, we're going to figure it out.
That's the only way to go in this industry. Just keep charging forward.
Yeah. You know, you, it's so true and you need to have, and this is something I've always learned and been taught and it's kind of ingrained in me is to have that sense of urgency.
Like you should have, you know, a week before you're done on day one at the beginning. And it's hard to do because it's easy to coast through the design phase and kind of think you, oh, you got plenty of time. It's like, no, You know, let's build up that urgency upfront. That way. It's a constant sense of urgency as opposed to going crazy, which it's going to be towards the end, no matter what, but it's just, you'll have a much more successful project.
If you can really let that urgency sink in and take action. Like it's date, you know, a week from opening, opening completion, CBO for house.
Okay.
Yeah. And that urgency too is going to serve you in that. You're probably going to make more concrete design decisions upfront that aren't going to hopefully buy you in the, like on the backside, right. Where a lot of things get slid or not looked at, not cared about upfront. And that usually bites everybody in change orders and delays and cost implications.
Schedule. And, you know, like you guys are saying for a lot of projects, it's, you know, you keep moving as much as you can. And a lot of it just needs to get now you're going to deal with a lot of paperwork backend to unwind the deals or structure them differently in your case for how you're building them, how you're moving forward, you know, and this is a big thing on the owner and developer side is how.
Paper to what are the structures, uh, that go into the deals that I think a lot of people just don't know, right. Aren't aware of that. There's, you know, a lot of entity structures or financing structures that have to get done or that they brought investors on how all that works on the, on putting a deal together, uh, versus, you know, just strictly than design side or strictly as a contract.
You know, where somebody's paying for something somewhere, how that all comes together. Uh, isn't always clear and that's know, we don't need to know, but it's always interesting to see how many different entities or paperwork goes in the under side.
Absolutely. Right. And I mean, you're the source, you're where the money's coming from now.
And I've had experience in that. Kind of different levels. Um, but I've always worked for somebody who sources the funds, you know? And so I have learned, you know, an enormous amount on the financing side and deal structure and, you know, kind of where that cashflow comes from, how we're going to get the construction loans.
Um, like you said, that's all, you know, the best way to learn is for me, has been to do it. Um, And then on the designer side, since I was doing like $50 million projects, we would always have the luxury of having, you know, the best architect, the best engineers, a level of people. And not to say that the guys I'm using aren't a people, but it's, it's, it's kind of taking a step down.
I don't, it sounds bad saying, taking a step down, but simplifying the design. You know, maybe using a track home that was already done and it has been approved and, you know, embellishing it a little bit and reusing it. Your plans are done. I mean, it's a lot different than, you know, a brand new 220 room hotel that starts from, you know, SDS the DDS and big long two year evolution of plan development, um, for a small single family home.
So I've had. It's hard unless not be as, uh, I guess lowered the bar. It sounds horrible saying that. Um, but it simplifying, I guess, is the better word on, on that whole design process.
And that makes sense. And I, I think it's just a different level of sophistication right. Of, of the partners you're teaming up with.
And it's probably w I know it is cause I've done it. It's the same with the, with the subs, with your trades too. It takes a. A different level of carpenter to go build a $50 million hotel than it does to build a 2000 square foot home. And it's, that's, that's part of the, the joy and the beauty and the headache of, of doing what we do.
Right. You gotta be able to make teams based on what your end goal is. And, and those teams are always going to be different depending on which way you're running.
Yeah. And that doesn't mean you can't. You know, uh, uh, let's call them a less sophisticated team and then bring them up to where you were expecting and bridge that gap to where now you have the best, you know, most aligned lean team to build your homes.
I mean, so it's going to be good. It'll be interesting. I just have to remind myself to, you know, let's, let's train people to bridge that gap from what I was used to, to, you know, what I need to, I guess, get used to.
Yeah. And once you've built that team and you, and you build your new guys up to your level, don't ever let them go, man.
Cause you guys will take over the world at that point. You're, you're unstoppable once you all are aligned
like that. No. And that's, you know, that's the plan and I think, uh, you know, Dylan, I think one thing you guys like to talk about all the time is, you know, how can we improve the industry? And that that's kind of something that, you know, I've gone through some bad job sites or bad job site.
Where it's one bad apple kind of poisons the whole bunch. Um, you know, I've, I've gone through experiences where we didn't pull the weed out and it, you know, kind of infested the entire garden and what I want to do. And I'm going to try to implement this on the hotel. It's a boutique hotel that I'm going to be managing, um, is that changed the culture of it, you know, on the job.
And figure out what motivates, you know, let's, I don't think we could get to the labor level. Um, but we may be able to get to like the supervisor level, find out what they're after, what motivates them, what gets them going, you know, and try to build a better communication on the job site, you know, just create a job site in an environment that.
Companies want to get to, and they want to work on your projects and you're not trying to hunt and chase for scrap for bidders. You know, they're waiting in line to try to get on your job site. So it sounds a little pipe dream in a way sometimes because if you speak to older people in the industry, they're a bit scarred.
Um, and they're like, you're crazy. You know, this, this is the way you have to do things. This is the way it is. But I don't know. I guess I have this. Vision and hope that somehow we can change the culture in construction of it.
Well, congratulations, because you just summarized like the last seven months of this podcast in about two and a half minutes, there that's, there is a way to change this industry and to, to boost culture, to boost profits all at the same time.
And it's it's happening. Whether people want to admit it or not. It takes a lot of work, but what we can't preach enough about it on the show and outside of, outside of the podcast in our real lives too.
Yeah. I mean, why not? You know, everybody on the project team who's swinging the hammer. I mean, that's where the real work comes in.
All the guys that are busting their butt out there all day, you know, if we could figure out how to get them excited to get up and go work and to get to this job site where everyone respects each other. You know, and it's, it'll it'll have growing pains, but somebody we gotta try. Right. I mean, and, and I, I feel like I'll, I am in a position to where I can almost force some of that, you know, on the job site, being the owner developer and the GC, um, you know, making it a requirement.
Like if you have a bad attitude, get the heck off my job.
Yeah, and it, I mean, it starts with culture. It starts with giving a shit about people in general, and then, you know, it just bleeds into everything else. And if you care about the superintendents, the project managers, the foreman of, you know, all the subs, things go a lot better.
You know, those are been the best jobs that I've been on is when people had a mutual respect for everything. Everybody was doing right where I respected foreman and what, what they were doing and leading their teams. And, you know, they had respect for what I did and my role. And if we could come to the table there, you know, everything just moved so much better moving forward.
And I think, I mean, it starts with culture. And then to your earlier point too, it's, you know, like residential is not equal to commercial, right? There's a, there's a gap between those two things. And just, you know, the complexity, the build quality and a lot of them. And I think, you know, a lot of people have a hard time making the jump, you know, one way or the other, uh, between the two.
And I think that's going to be probably your biggest challenge is going between a commercial hotel build and a house build in the same week in like, oh wait, we this, you know, the things don't have to be, they're not the same. Right. It's a completely new. Build type. And, uh, that'll probably be one of your biggest challenges here moving forward is like going to the hotel build and like things need to be here in the house build, you know, things don't quite need to be
there.
No, it is. That's going to be the biggest adjustment and, you know, aligning my expectations with reality really is what it's going to be. Um, because it's just not going to require the same sophistication, but at the same time, you know, Go into it, thinking that, and then set yourself up for disaster, you know, and kind of underestimate what really needs to be done on that job.
Go ahead. And that, I was just gonna agree with you. I mean, you, you don't want to dumb it down and, and risk, you know, keeping your feet in the fire for too long. Cause. If you can find that, that secret sauce where you build the culture on your job site and you have that same culture permeate from your residential to your commercial and, and back again, I honestly think you can build an unstoppable force in this industry at that point.
Yeah. And ideally it's, you know, picking some of the, the team members from the commercial stuff to do the rest. And eventually that's my plan is I'll have, you know, a larger commercial project going and, you know, staggered, I'll have some residential stuff going on the side and I can use the same team members that have the same culture and they're aligned with, you know, what we're going after and trying to do, um, to almost work on the homes on this.
Yeah. And you know, the subs will appreciate it as long as you keep them busy and you've got work constantly stacked. They've got they, they won't have a reason to go anywhere
else. No, exactly. And, you know, in addition to just the, the sub-trades, it would be great. And it, I think it's a, uh, topic to bring up, uh, with Dylan here to get the consultants.
And on the same page, because I'll tell you guys, and I'm sure you've had experience with it, but in owner meetings, subcontractor meetings, it's always constantly somebody didn't do something because of somebody else, you know, most of the time it's because the GC and the architect, you know, keep pointing the finger back and forth.
It's just constant blame 24 7. And it's like, it's very difficult, you know, to. To bridge that the only way to do it. And I've found it very effective is to throw them in the same room, go RFI by RFI or whatever. However you want to do it. And just force the communication as an owner or an owner rep you know, trying to get them to talk it's as simple sometimes as just getting on the same line with them or forcing them to be on the same line, you can make the intro and say, Hey guys, go through the list and you just have to say.
You know, you know, you interject when they can't decide on something, but you have to sit there and force people to coordinate and communicate. And I think, you know, that's, that's what, everything though. I mean, it, it, it starts with architect and general contractor. And you could say the same thing between subs and trades.
I mean, you could say the same thing between, you know, once you're done with the project, the operating side and the general contract. You know, there's so much it's communication. That's the biggest thing on any job, any job site, um, a big thing that I've, um, you know, pretty stringent on is having weekly meetings.
Um, no matter what stage of the project, the project's in, um, even if it's saying hi, you know, getting it baked in at the beginning of a job, once you have your team set up to just touch on. Every single week, even if not much happened, I mean, you know, just make it a habit and instill that in your team. And, uh, it's very effective.
Yeah. And keep those meetings short and sweet, you know, if they need to be don't don't belabor points that don't need to be belabored. And I mean, you're right. Like having everybody on the same page at the beginning, having the architect, the GC. Uh, all aligned, but it's also, like you said earlier, if there's a bad apple on either side, like they've got to go, cause I've seen it both ways where, you know, some architect is egotistical and it's his way or the highway.
And then that stalls everything. I've seen it happen on the GC side and they throw everything over the fence to the way. Nothing ever moves, no one can make a decision. You know, they're just trying to shed liability and responsibility, really responsibility or doing anything like, so I've seen it on both sides of the table, you know, whether anyone will ever admit that that's a whole different story, but if we can come to the table upfront and.
You know, to shed those bad apples, like, Hey, I don't want this guy on my job. Like, you know, as, as you owner, you can do that, right? Like the rest of us don't have that, uh, maybe luxury. But I think that's where it all starts is, you know, mutual respect for what everybody has to do, what your role is. And then, you know, here's what I need to move forward.
And just have like a real conversation. I know this is like a hard thing for a lot of people to, to come to, but at the end of the day, that's what needs to happen is, you know, here's what need to move forward. Here's what you need to do. Yeah.
It's mutually beneficial to both parties. I mean, if somebody doesn't want to be there, they shouldn't be there.
Yeah. I mean, right. If they're bitter and say. Go find somewhere else to do that. Or, you know, you're not enjoying what you're doing, buddy. Get out of here and they're
stuck. I mean, it's golden handcuffs of some sort and there they're stuck
as sad as that is. I mean,
it's absolutely real. I mean, I know it is because you know, a lot of older superintendents are. Executive project map. I mean, like they own part of the company and they they're tied to that company or else they're going to lose their, you know, the, the equity they have in that company, if they leave.
And it's a real thing, like some would consider it smarter from a, you know, a business standpoint. Um, but on a personal level, They're stuck. And so that it, um, you know, it'd be interesting to see how that impacts performance and, you know, the, an image of a company throughout time. I don't know if there's there probably isn't a way to connect.
That seems like a very thorough investigative, uh, project, but
yeah, at least not for privately owned, but I mean, so moving kind of forward through, through time, you know, There's obviously a lot. We can improve communication being like a core, core thing for it, but what else are you seeing out there? You know, having been involved in, uh, now, now some small projects and some, uh, past, you know, really big developments that, that have really big timelines, but what are you seeing as the thing that really needs to be unlocked or push forward, uh, through the industry to really help us all, you know, not just culture and communication, but what else can help us?
Yeah, build better.
So what I've and I always have wild thoughts, but honestly, on a $50 million job, there's probably about 50% of the management involved in that project. That's unnecessary really when it comes down to it and it's just there to CYA cover everyone's ass and it's, uh, it's sad because. You know, everyone's following up with these emails, that email threatening via email, instead of picking up the phone or, you know, getting on a conference line and it's, it's so wasteful and these, you know, these upper level managers are, I mean, they're not cheap.
I mean, it's, there's so much waste and you know, that of course relates to time as well. I mean, all of that wasted. Effort and manpower, you know, relates to costs additional costs and additional time. So I don't know if there's a way, but if you can get, because the real, and I, let me, let me kind of back up here.
I always think that the best and one of my mentors who was awesome, I mean, amazing project manager taught me this and it's that the, the formula for a successful project is a good plan. Plus a competent team and both of that's multiplied by desire. And if you have that equation in any type of project, it's going to be successful.
Now, a good plan. You can hire a good superintendent or come up with a great plan, um, a competent team. You can also pay for it and hired a great team, but it's the desire aspect that I think is the most elusive and challenging to nail. So I was thinking that, so how do you create, or get max effort from all players or companies that are involved in a project and most people, uh, you know, get motivated by, you know, financial, you know, motivation.
So if there's a way to tie the, you know, the biggest contractors that are involved in the project or have the most. To the equity of a project and get them in, on both the additional expenses or the profit, you know, on completing sooner or, you know, finishing the project on time, under budget. Then that seems to me like it would, it would lean things up and your framework or your electrician and your MEP trades.
They're going to care if the guys aren't coordinating down there on the lower. Because at the end of the day, their ownership has an equity stake in the deal. And so now it's probably very complicated on how that would be structured. Um, but I think that that's something that eventually here I want to try out and it would be good to try it out, you know, maybe on a smaller build or ho you know, hotel, maybe $5 million project or something.
Um, but I think it would work.
I love the idea, you know, and, and candidly, we do a lot with shared savings clauses between us and the ownership group. Right. And it's the same idea. If we finish ahead of schedule or under budget, we take some of that savings and pass it on back to the owner, or sometimes all of it, but I've never really considered the idea of going their direction and they.
Not considering that it's pretty short-sighted of me. I don't know how it looks contractually. I think you're right. It gets probably a lot of paperwork involved, but once you figure out that, that calculation, that, that, uh, you know, that recipe for the cake, that could be really, really powerful.
Yeah. No, I mean, it's, I don't see how wouldn't work.
If you could figure you'd have to get, um, maybe a subcontractor who's younger kind of up and coming, coming. Maybe, I don't know. And just build that team and build, you know, get ahold of the owners of those companies and say, Hey guys, you know, this is the deal. This is how much equity we need, you know, to make the deal happen.
Are you guys in? And I mean, there's, there's ownership right there because nobody else, and I've seen it. They don't care about the product or the project like you do. And I don't want to say everybody, but, but most people who are out there. Out there just to, you know, get their time in and do their work and go home.
But at the end of the day, they, if the opening slips a month or two, I mean, they're still getting paid, what they pay for. Right.
You can almost
consultants and the consultants, you know, and again, I don't know what the percentages are. I don't know how, but get the architect and the engineers and everybody to buy into.
So that they're pushing and answering our fives. And this is going to delay us guys. Everyone's going to jump on it as opposed to, while I'll get to, you know, my list of other delays or other projects. I don't know. It sounds, uh, again, it'd be very complicated on the contractual side and how to structure it.
Um, but it'd be an interesting test and I think it would work.
Well, I think we've seen it work in the past in some of the really big ass construction and development firms, where they have all of that. They have the architecture and engineering. They have all those self-performed trades and management all under one roof.
But what you just crack the code too, I think, was, was taking that giant monster and figuring out a way to shrink it down to a, a scalable or a D scalable size. So it works for. What are normal projects to guys like me and Dylan and yourself, you know, that that's a wonderful idea. And if there's attorneys listening who have ideas on how to structure this thing, put it in the comments because I think David just stumbled upon something great.
And it'll work. I really believe that it will work. And, uh, T to the point where you have subcontractors waiting in line to get on your next.
Yeah, the thing, the only thing that I can think of too is you do it at the ownership level. That's one piece and they can push the teams to make everything go. But what I have seen at least from the design side is it doesn't matter like how good or bad we do on this project. None of it's coming to the design team.
Anyway, it might go to owners. But then it doesn't trickle down. So in that you've got to align with companies that have the culture of profit sharing and like all that other stuff. So that performing better on a project does go through everybody in the same with subs and everybody else. I like, yeah, I can bust my ass, but am I going to see a slice of this, you know, all the way down the chain.
I think that. Uh, you've got to partner with and, and do those deals with companies that share that same culture because while the ownership group might get it, it's, you know, are the, is the ownership group treating everybody down the rest of the team in a way that like the team wants to bust their ass?
The team wants to do a good job because they know that they're going to get something on the other side of it. And the culture is fun and enjoying and like, you know, a great place to be. Beating everybody on, you know, move faster, do better, uh, type of no,
you're absolutely right. Dylan and I actually ran into a similar instance on a project I did where, you know, we were incentivizing the general contractor.
If they complete the project a month earlier or whatever, they're going to get 50 grand of bonus. And. It was, we had to make sure that that bonus went to the project team. And if they weren't willing to guarantee that, then we said they don't get the bonus. We really did it. And it worked because you know, the people on the team, one guy was young.
He was going to get married. This other guy had his second child. Like they were motivated to get that bonus. And that's who you need motivated, but you're exactly right. That executive who checks in on the project once in a while and got the 50 gets the $50,000 bonus. And these guys see maybe, you know, if anything, five grand or if they have a company policy where they don't give bonuses, you know, you have to make sure it's a, that's a great point.
You have to make sure that it's the actual team who's on that project that, that sees, you know, the bonus and the profit.
So how'd you go about that in that example, you just said, was it a contractual thing or was it just a handshake and we're going to hold you to the fire if you
don't. No, we got it in writing.
We did almost like a letter of intent, you know, or an agreement. Um, and they did it and they were like, well, this isn't company policy, you know, other guys on other projects, it's like, well then nobody gets a bonus. You know, like it's our money? Like, what are you. They went with it and it worked, you know, they finished early.
I love
it.
Where do you see the industry heading? You know, what do you, what do you see next for construction? Yeah, obviously it's a big deal,
but yeah, this, this would change a lot of things. I think as far as the culture aspect of things or the desire, getting the desired ramped up on prep. But I'm very interested in, and I need to spend some more time learning more and more about it, but, you know, 3d printed homes.
Um, I mean, to me, there's like zero waste. I don't know about zero, but a lot less waste. Um, really environmentally friendly, um, time is ridiculously say. Um, of course it's going to have its new challenges and a lot of municipalities and jurisdictions are going to take forever to actually adapt it or adopt it just because they're very antiquated and, and the way that they do their codes and reviewed that takes forever.
Um, but there are some progressive, you know, cities out there, municipalities, or, you know, maybe if you go far out in the desert, Um, they'd allow it if it's on a, you know, unincorporated area of land. Um, but I think there's a lot of upside on that. Um, so that's, that's very interesting to me and I, uh, I know they're doing some projects out in the high desert, um, out here in California where they're doing 3d printed, modular home.
Um, they haven't got to the on-site stuff yet that I've seen, um, out here, I know they're doing kind of some hybrid projects, some stuff in New York. I saw some stuff in Tennessee, um, where they're doing like the superstructure of 3d printed, um, materials, and then they do stick frame above. Um, but yeah, I, I like that.
I think it's, uh, it's cool.
Yeah. From a structural standpoint. You know, like you can't get the whole lot better than, uh, you know, things that are glued together and done at a fairly molecular level. Like it's pretty, pretty amazing what, uh, 3d printed stuff can do where I see the biggest, uh, problem or challenge overcome in there is with the trades, you know, Uh, HPAC or electrical in the walls.
How do you, uh, do some of those pieces, I think is the biggest thing to overcome and it's probably just in the setup, uh, of it, right. To slip, conduit down a wall, and now you're punching out concrete for back boxes and, and things like that. Um, I think is some of the bigger challenges, but from a structural standpoint, even installation, I think, you know, it can, it can get there with concrete.
Um, and then. Is that the material that you want, that's never going to go away, survive a nuclear blast type of structure in the middle of the desert. That's a, you know, I've been impenetrable to fire and everything else, but now to, to demolish it, you think of a full life cycle. What's the other side of that look like, and, and that I, I have no.
So I, we got to keep this building to last and not to make it easy to tear down someday. Right.
David, where can they reach you?
Uh, you guys can, anybody can reach me on Instagram. Um, mostly, uh, David M Carbajal is, uh, my username is pretty simple and, uh, yeah, anybody has questions or Mustangs. Always happy to, I, I love conversations like this.
I'm not kidding guys. You know, Matt, Dylan, and I, we have to, I have to force myself to hang up the phone to get back to work. Um, because there's a lot, I mean, we all have passion behind what we're doing and, and it's fun. It's fun that way. And you have to have that passion in our industry because it's very stressful.
And if you let every hurdle or hiccup or anything kind of weigh you down and mess up your day, or you're not going to go very far, fortunately. Yeah, you got to go with it and deal with it. And so yeah, you guys can reach me there.
Awesome, David, I appreciate it, man. I appreciate you coming on and having a chat with us and it's fun as usual.
Yep. Likewise guys,
I guys, we, uh, we covered a lot of ground today, David. Thank you for coming on for given the insight from the owner's perspective. I think you're the first owner that we've had on the. So it's always great. Getting another, another perspective, another way to, to cut things up. And guys, if you, uh, if you implement this, uh, shared savings profits split and it works, uh, we'd love to see those contracts, you know, like if you've been a long time listener, I harp on contracts pretty much continuously because I think it is the one thing that holds a lot of us back in, you know, what's in our contracts or not knowing what's in our contracts or even just how they're struggling.
Uh, it's a big thing with any industry. And what David brought up today is a, is a huge deal, big thing for the industry. And then just know there's a lot of tech moving forward, right? Whether it's 3d printing them. Uh, some of the things that we've talked about in other episodes about, uh, just embedded devices and all this management stuff that we can use moving forward.
So again, construction is a big. The industry. There's a lot of room for everybody, you know, from, from residential and building houses to hotels, to, you know, big 50 and a hundred million dollar developments. So again, David, thank you so much for coming on. And, uh, guys that is this episode of the construction corner podcast until next time.