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Sounds counter intuitive, but how can you keep your seed capital requirements low through efficiency improvement/scale? What do you feel is the best way to keep your construction or remodeling costs down when you are not personally involved in the experience yourself?
A good, trustworthy foreman cannot be replaced by any efficiency improvements you could try to apply. Find a contractor you can trust, and develop a healthy working relationship and respect. Pays off in spades.
@Account Closed Thank you for your candid response. I really don't want to lose my seed capital investment just due to poor staffing. I would rather it be from elements beyond my control if at all! Thanks.
I do mobile homes. Scaling a mobile home park is constant and unrelenting. I think the downtime between expansion builds is a huge seed capital burden. Nothing gets done with idle hands.
I like to keep max values on all costs, and use past builds as benchmarks. If the foreman or construction crew quotes me significantly over previous builds for the same job, I give the situation a review and prepare myself to lose an employee or two if they won't budge on the cost. I don't want to lose all my seed capital being bludgeoned by bad builders.
Depends on the unit's your working on and the method of REI really. If you are doing mobile homes, you will want to create an assembly line of sorts. This unfortunately, won't work as well for other methods.
I agree with you, @Account Closed , an assembly line system definitely saves on seed capital requirements, as that downtime is the most damaging part of the process. I don't see how any of this could be construed as counter-intuitive however.
I don't build enough units to factor in any kind of assembly line structure. I think you would need a lot of demand, otherwise you may find yourself in the hole very quickly stuck with 3 or 4 unsold houses and an assembly prepped to make more. Do your location homework first by any means!
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