One of the most stressful things in the world is construction. I am in the midst of four personal construction projects right now. Talk about stress. I would not recommend doing four projects at once but in my case it just happened that way. As Fred says "but you are so good at it.". Shoot me.
I was born with an incredible skill…the ability to make decisions quickly and never look back. That skill is probably the reason I am able to juggle all the moving parts. It is a serious gift. I figure that if I make a mistake I can always make another decision.
I just wrapped up on one project, phase 1 and am moving into phase 2. The reason I am writing this post is to share what I have learned along the way. Keep in mind that phase 1 finished on time and under budget. How did that happen? Most people laugh at you when you tell them you will be done by such and such a date. I am here to tell you that it is possible to get it done.
I rarely talk about this particular investment. I am an investor in the Moon Group. I am actually the only investor in the Moon Group That is a story in itself. They are the key to my success in real estate projects but what I have learned from them can be applied to any project even if you are doing it yourself.
Before I get to what I have learned about construction projects, I want to talk about the Moon Group. Many years ago, we built our first home in NYC. As we were attempting to wrap up the project our contractor brought in this guy, Rich Moon, to finish the project. I called him the sweeper because he was able to bring everyone to the finish line, quickly. I was impressed and totally hit it off with him. His mouth and attitude were comparable to mine. At that point of my life I was trying to figure out what to do next. I'd come home with a yoga mat under my arm most days while he was getting shit done. Hmmm, maybe we should go into business together and i'd be a real estate developer. Ok, that didn't happen.
Fast forward we sell our place and we build another and I call Rich because there is no way I was going to do a project without him by my side. Before that he becomes the guy who builds the Gramercy Hotel and then during our project he is hired to build the Standard Hotel. Not physically build it but be the guy who makes sure shit is getting done. An owners rep per se, the person you want watching out for you, the number one on the job.
Keeping on top of the projects is key. I mean talking to the construction head every single day. Having a face to face meeting once a week with an agenda. Buying a lot of the long term lead items yourself because most construction companies float cash so even if you think that they have purchased that hood for your kitchen stove, they haven't. Things are late not because they are late but because they didn't buy them on time. Ask your contractor how complete the architects drawings are before shaking hands on the cost. Guaranteed they aren't 90% done but more like 70% so that 30% ends up not being a fixed cost but a work in progress. Set goals and dates. Give a bonus if finished on time that is paid in cash directly to the contractor. Have a contract that allows you to opt out if goals are not completed. When things slow down it is probably because subs are not being paid. It is not a exact business each project takes a life on to itself. I am just getting started.
This is not an easy business and I am no doubt incredibly lucky to have found Rich who has hired incredible people to run our projects and all of his other clients ( hotels,offices, apartments and homes). Yet he has proven that you can be on time and on budget. BTW, on one of our projects the contractor just wasn't hitting the high notes. What did we do? Fire them and hire someone else. On Monday they were fired and on Tuesday the other company jumped in already knowing each sub who was working on the job so we didn't miss a beat. That is impressive.
Am I looking forward to all these projects being over….for sure. Is there no doubt that our projects will be on time and on budget….for sure. Do I hope that what I have learned I can pass on to anyone doing a construction project…absolutely. What will I come up with to fill the time on these projects….relax??