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Building Optimal
Building Optimal episodes
- #21: Forging Stronger Subcontractor Relationships with David Gerstel
If you thought we were going to let David Gerstel off the hook with a paltry two-episode series, well think again. He’s back with some tips to improve our relationships with our subcontractors (affectionately called trade partners). These are tips he’s developed over his decades of experience in the construction business. For those of you ne’er-do-wells who haven’t listened to Episode 19 or 20 with David, he is a best-selling author of several construction books, including his most recent, Nail Your Numbers: A Path to Skilled Construction Estimating and Bidding. In addition to being an expert on many things “home building,” David is also a model of success, having achieved financial freedom with his own construction business by the age of 34.
Enjoy the episode! And be sure to sign up for email updates and new information at www.buildingoptimal.com!
Show Notes
[1:10] – Why you need “Included/Not Included” form to save you miscommunications with subcontractors.
[6:30] – Is there a magic bullet to ensure quality control with subcontractors?[11:10] – Why you should approach competitive bidding differently from jobs with pre-construction agreements.[16:20] – The optimal pay cycle and the importance of a strong capital reserve.[20:30] – David on competitive bidding and another strategy he’s seen that works.27 min - #20: In-House Crews & Employee-Centered Companies with David Gerstel
David Gerstel is back to talk about the decision between hiring in-house crews or subcontractors. We also discuss the advantages of employee-centered companies. For those of you who haven’t listened to Episode 19 with David, he is a best-selling author of several construction books, including his most recent, Nail Your Numbers: A Path to Skilled Construction Estimating and Bidding. He is also a well-known speaker, and will be featured at the JLC Live Show November 28-30 in Portland. In addition to being an expert on many things “home building,” David is also a model of success, having achieved financial freedom with his own construction business by the age of 34.
Enjoy the episode! And be sure to sign up for email updates and new information at www.buildingoptimal.com!Show Notes[1:15] – The pros and cons of in-house crews vs. subcontractors.[4:00] – The best part of having an in-house crew.[7:32] – What questions should you be asking before making the decision.[9:18] – David’s business setup.[13:00] – How to find and hire your crew.[17:03] – The benefits of giving your employees a 4-10 workweek.[18:10] – David’s staffing/employee structure in his company.[20:55] – David’s prescription for stronger subcontractor relationships.29 min - #19: Bidding, Estimating, and Achieving Financial Freedom with David GerstelDavid Gerstel joins us to talking bidding, estimating, and achieving financial freedom as a builder. David is a best-selling author of several construction books, including his most recent, Nail Your Numbers: A Path to Skilled Construction Estimating and Bidding. He is also a well-known speaker, and will be featured at the JLC Live Show November 28-30 in Portland. In addition to being an expert on many things “home building,” David is also a model of success, having achieved financial independence in his mid-thirties (less than 10 years after starting his business), much of which he attributes to his passion for the craft. Enjoy the episode! And be sure to sign up for email updates and new information at www.buildingoptimal.com!Show Notes[1:50] – Why we shouldn’t confuse bidding and estimating.[9:20] – David’s 5 construction cost categories.[15:45] – The three overhead allocation methods and David’s recommendation.[22:25] – Allocating overhead when you aren’t operating at capacity.[25:30] – Using Labor Productivity Records for estimating direct labor on projects.[31:30] – What David sees as the standard profit margins.[34:30] – David’s opinion on the best business models.[41:30] – David’s strategy to financial freedom as a builder.[44:50] – Ensuring you know where your pricing stands compared to your competition.[52:40] – Ed Earl’s collaborative construction approach.57 min
- #18: How to Raise Money for Your Projects (Part 3) – Behind the ScenesThis is the third episode in a mini-series exploring how to raise money for your projects. In this episode, we explore the logistics and other considerations of how to raise the money and structure your deals. Enjoy the episode! And one more thing…follow us on Instagram and Facebook for more tips and ideas to take your construction business to the next level!Show Notes:[1:48] – The number one priority: Talk to a securities attorney![3:20] – Talking to accredited investors and building an investment platform.[4:40] – Types of entities in which to raise money.[5:40] – The pros and cons of single-asset entities.[8:55] – Raising money at the operational level.[10:40] – Raising money with promissory notes.[13:50] – Considerations if you are raising equity-only for your project.17 min
- #17: Using Security Cameras for Better Project Management
It’s time to enter the wonderful, magical world of…security cameras. Our guest, Nate Carty, explains a simple, affordable system to help with theft deterrence, subcontractor management, client communication, and more.
Nate and his brother Chris are the founders of Carty Custom Builders, an Austin-based residential home home builder. Nate is a CFA Charterholder and a graduate of the University of Texas. He’s also a smart dude and a tech whiz, as you will see in the interview.
Show Notes:
[2:32] – Deterring theft with security cameras.[3:34] – Visibility and signage with the cameras.[4:00] – The unforeseen benefits of using security cameras (hint: more than just theft deterrence).[6:01] – The nuances of allowing clients access to security cameras.[8:32] – How many cameras should you use and where do you place them?[9:21] – Specifics of the cameras.[10:21] – Nate’s setup for his security camera system.[16:15] – The all-in cost for Nate’s system.[17:52] – A few things to consider before getting started.[20:21] – Getting in touch with Nate.Selected Links:
Vimtag Security CamerasKingston 32GB SD Cards1-Gang Weather BoxT-Mobile Hotspotswww.cartycustombuilders.com21 min - #16: How to Raise Money for Your Projects (Part 2) – Tips to Raise Money and Structure Deals
This is the second episode in a mini-series exploring how to raise money for your projects. In this episode, Jared offers tips on how to raise money and structure your deals.
To get for free Jared’s deal pro forma template that he mentions at the beginning of the episode, write us a review on iTunes (Here’s How) and send us a message letting us know.
Enjoy the episode! And one more thing…follow us on Instagram and Facebook for more tips and ideas to improve your business!
Show Notes:
1:00 – Our pro-forma template giveaway (How to leave an iTunes review).[2:00] – The two ways to finance a project.[5:33] – A common debt/equity split.[7:40] – The need to budget all project expenses into the project capitalization.[8:30] – Sources for raising equity.[12:20] – A simple way to raise money from your personal network.[16:10] – Working with a single investor vs multiple.[16:55] – The different ways to structure your deals with your equity partners.[24:30] – Basing your deal terms off your investor’s required rate of return.[27:10] – Strategies if you are struggling to raise loans/debt.[30:45] – Strategies if you are struggling to raise equity.36 min - #15: Peter Yost Returns – Upgrading Your Assemblies, Benefits of 2×6 on 24, and the Best WRB’s
Peter Yost, one of our most popular interviews to date, returns for a short episode on more great high performance construction tips! Peter is a building science expert and VP of Technical Services with buildinggreen.com
To check out Peter’s popular first interview with us, visit here.
Peter will be hosting a live webinar on 7/31 over high performance building assemblies. To learn more, visit their webinar registration page.
Enjoy the interview!
Show Notes:
[1:40] – The best way to upgrade your building assemblies.
[6:30] – Importance of installing back dams.[8:00] – Peter’s take on 2×6 on 24 framing.[11:00] – Peter’s preferred weather resistive barriers.14:30 – Upcoming buildinggreen.com webinar on high performance assemblies.16 min - #14: How to Raise Money for Your Projects (Part 1) – Dangers, Dead-Ends, and Pitfalls
This is the first episode (19 minutes) in a mini-series exploring how to raise money for your projects. In this heavily opinionated, rant-laden (yet valuable) episode, Jared explores a few dangers, dead-ends, and pitfalls to avoid when raising money. Enjoy the episode! And one more thing…follow us on Instagram and Facebook for more tips and ideas to improve your business!
Show Notes:
[3:00] – The need to have your policies and procedures written down.
[4:30] – Protecting yourself by getting info from customers for invoicing, checking credit and references.[8:50] – Incorporating Accounts Receivable reports are circulated during staff meetings.[11:20] – Fraud risk is highest in the area of accepting payments.[12:30] – Fraud is often driven as much or more by opportunity than motive.[13:10] – The need to monitor bank reconciliations.19 min - #13: Short Episode, Nathan Owen on Subcontractor Back Office Best Practices and Preventing Billing Fraud
Nathan Owen, CPA, is an expert is accounting for contractors. In this episode he discusses best practices for subcontractors’ back offices as well as preventing fraud amongst your employees. Nathan’s company, Vine Financial Partners, provides full scope accounting solutions. Enjoy the episode! And one more thing…follow us on Instagram and Facebook for more tips and ideas to improve your business!
Show Notes:
[3:00] – The need to have your policies and procedures written down.
[4:30] – Protecting yourself by getting info from customers for invoicing, checking credit and references.[8:50] – Incorporating Accounts Receivable reports are circulated during staff meetings.[11:20] – Fraud risk is highest in the area of accepting payments.[12:30] – Fraud is often driven as much or more by opportunity than motive.[13:10] – The need to monitor bank reconciliations.Selected Links:
Vine Financial Partners
18 min - #12: James Rudnicki, Attorney to Builders on Contracts, Warranties, and Lien Waivers
James Rudnicki is a Texas attorney specializing in home building. He actually *wrote* the contracts for the Texas Association of Builders. Bottom line…he knows his stuff, probably as well as anyone. And when it comes to risk management, we can always learn a little more. Enjoy this conversation as we explore contracts, warranty liability, and lien waivers. You will learn a lot, but please don’t do anything without consulting your own attorney.
Show Notes:
[2:10] – Cost Plus vs. Fixed Price contracts…What James prefers.
[5:50] – The importance of a Builder’s Services Agreement.[6:50] – Protecting yourself against price increases in Fixed Price contracts.[11:45] – Protecting against client onset delays.[15:45] – Pricing change orders.[16:10] – On the necessity of signing change orders up front.[19:50] – Fixed schedule milestone draws vs. periodic progress draws.[21:10] – The ins and outs of retainage and why you should avoid it.[27:00] – On managing warranty liability.[28:15] – On third party warranties.[30:40] – The warranty standards you need to follow.[34:25] – The low-down on lien waivers.Selected Links:
Bush Rudnicki Shelton
40 min
About Building Optimal
From the publisher's feed
A podcast for home builders and industry professionals looking for an edge into the best strategies and tactics to grow their business and shape the future of housing. Host, Jared Gossett, President…
of award-winning Gossett & Co in Austin, offers game-changing lessons and interviews with industry leaders and subject matter experts.