All Forum Posts by: Emilio Ramirez

I started on bp several years ago and told myself that if it ever made me money I would upgrade. Well it did and I upgraded to plus. Then I moved to Denver and was away from it for about a year. I started back up on BP again. And again I have bp to thank for landing my biggest contract to date under my own company. Lets go pro!

Didn't see your last post.

Have your friend hire you as a construction manager. You have a contract with him to provide services. Help find subs, coordinate deliveries, procure materials, etc, but all contracts with vendors and trade contractors are direct to him. You'll have to check because some areas require this position to hold a license as well, but typically not an issue as you are just providing consultation.

Then hire a framer who also is a GC. The guy you're looking for will typically work as both a sub and a GC. Pay him a little more to pull the license and enough to feel comfortable with the situation. Maybe he's involved with hiring the finish trades, etc. But then you don't have to hire a full blown GC. If he's smart, he will charge you for management, and not provide any when he is not getting paid for it.

Be prepared to take a smaller fee on this one since... you're not licensed. 

What are you going to do on the next house after this one?... Get your license. 

Hey Jon,

Welcome (back) to BP. 

I used to live in Wisconsin and it was near impossible to find a "primo" lot for $10,000 or even with $30,000 with a $10,000 down payment. I realize that's not Minnesota, but I would imagine a similar environment. 

I think you'll find that buying land for appreciation can be a huge gamble and a long term play.  Just do the math. Let's say you already had a subdivision picked out and you bought the lot. Per your plan, you'd have to wait for the rest of the homes to be built. Could be 4,5,6 years or more depending on many things out of your control. 

I especially don't like it because you are relying on these many things out of your control to improve the value of the lot. You're not using your skills to create the value add and appreciation. I would keep studying and saving money. 

Your contract is a tool that should be standardized imho. There are situations where you can bend your rules, but only you know that. My contract has a clause in it that states this document was jointly drafted. Not sure if that helps in the courts eyes. I also am willing to modify my contract, but I know where I'm willing to bend because I use the same one over and over.

Well.. I would have to charge you for an airplane ticket and a hotel plus my time :)  Some guys charge nothing others charge up to $250... really depends. For me, I would want to know, does the estimate need to be a low level of detail or are you looking to establish a budget? A true budget would take a lot more time than an estimate. Josh had a good idea. Try and find some other investors in your area who would be willing to refer a contractor. Be aware that a relative or friend who refers a contractor may not be in the best position to send you the guy you're looking for, even if they had a good experience. Bring him to the project and tell him what you're looking to do. 

Not sure what your scope of work is... is it a gut rehab or are you simply updating fixtures and finishes?  

I don't know what the value of an estimate is going to be "as opposed to you just winging it." Winging what? pricing of materials? Are you trying to figure out how much money you'll save if you do it yourself?  Not sure on what your question is. Clarify the scope and you're goals and I can chime in more. 

Some contractors charge a fee. Others Don't. Most will credit that towards a future contract. Should be easy to negotiate. If you want to do it yourself... might benefit from hiring a working foreman type of guy, who can take the lead, explain things to you and help you find subs if needed. 

The operations side of the care community is very complex. You have to define who your tenant is going to be. If you have no experience in this I would suggest finding the operator first and customizing the build to their needs. Senior Housing in itself is a very broad term. Are you talking about a 55 and older community or assisted living, memory care, skilled nursing facility, etc? Each State is different, but depending on who your tenant is, the less they are able to care for themselves, the more regulated the care becomes. The biggest hurdle, in my humble opinion, once you start providing care, you have to maintain minimum staff to tenant ratios. Usually something like 1:7 or slightly more. 24 hours a day, seven days a week. Once you add up all those salaries, even at minimum wage, your break even cost starts to explode. Then add all the other expenses, meals, items of daily living, insurance, activities, transportation plus overhead. It really makes Senior living inaccessible for many seniors. 

For this reason, I looked into building a community in Rocky Point, Mexico, but have yet to pursue it past the idea stage.  Not sure if I can put urls in posts, but we'll try. I don't know if I will get it off the ground, but feel free to take a look. 

http://memorycarebythesea.com/index.html

Good luck with your project!

Biggest thing in my opinion is the functionality of the space. Does the house work well as it is? Is it worth preserving? 

Second would be the structure. Is the foundation in good shape or does it require a complete replacement?  Are the studs structurally sound (assuming wood construction.. don't know Hawaii.) or are they dry rotted with lots of termite damage?

Third would be water infiltration. Is the house generally water tight or has mold started to grow in all kinds of places? If so, how is the water getting in? 

Get these questions answered and you'll have a good idea of what you have. 

You can go several ways, but I would recommend CM as Agency or CM at Risk. I prefer CM as Agency for the reasons stated here.

Construction Management as a Stepping Stone to Collaboration

The CM delivery method serves to better align the Contractor’s Goals with those of the Owner. 

1.Fixed Fee – no markups on change orders

2.Transparency – Open book bidding and accounting allows Owner complete access to project cost records.

3.Flexibility - Allows for multiple scopes to be bid and analyzed by the CM and Owner prior to committing resulting in huge flexibility on the project scope.

4.Collaboration – Owner can use the CM Agency as his “Right Hand Man” truly representing the Owner’s best interests.

5.Non-Adversarial – Because the CM is contracted on a fixed fee, there is no arguing over change orders. This results in the CM and Owner being able to maintain a professional, non-adversarial relationship.

6.No Middle Man – Agreements with Trade Contractors and Owner are direct. This limits the possibility of a GC not paying his subs. The Owner also knows exactly what he’s paying and to whom.

7.Savings – If the CM and Owner are able to bid the project for less than the budget, all savings stay with the Owner.

The key in your situation would be to decide if you need to hire them as Agency or at Risk.  If you hire them at Risk than the "transparency" can be a little cooked as they have to protect their butts in case there are mess ups or misses... and there always are. When I worked in CMAR we always drug out the GMP as long as possible. This would minimize our risk on the final cost and also the Owner's to an extent. 

How do you know you are getting the best price? In CM work, every trade scope can be competitively bid including.... the CM. When the actual trade scope are bid, the CM is supposed to present the bids to you with his recommendation. Unless you are building a major project, I would not start construction without having the framing and MEP scopes close to under contract. Demolition ok, but not excavation. I've seen way to many cost run ups between drawing sets, even in this method, to tell me it is worth it. Sometimes it is good to be patient.