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A Strange Background for a Contractor/Builder

456 views 0 replies 1 participant last post by  ReubenD 
#1 · (Edited by Moderator)
Reading through the Contractor Talk forum has once again reminded me of the unique path that I followed to entering the Contractor / Builder professions. It is very different than the typical route taken by the other professionals on here and the difference in perspective becomes very obvious as I read through the posts. I think that is one of the reasons I have found this forum very useful and keep finding myself back here again and again to peruse the forums.

While the typical construction company owner either came into it as a family business and has been doing it their whole life, or started as a worker and after many years working for other crews or companies finally took the plunge and went into business for themselves, my career path went from hobby, to second job to supplement my income trying to earn a living and support my family, to a business owner and managing partner of a construction business and real estate company.

I am sure many will think it unfair that I went from casual homeowner/dabbler to hack doing work for myself that I was too cheap to pay others for, straight to the owner of a decent size company, I see it as a unique reminder to the fact that there are two distinct skillsets involved in running your own business. The first in this field is clearly being very skilled at construction or some aspect of the construction/carpentry field so you have the skills that are of value to somebody else to sell to them. The second is the skillset used to run, grow, and maintain a business - the same skillset used by any business owner.

I started in the business completely by accident. When the housing and property values began to really go up in the 90's, I had the opportunity to purchase a house quite cheaply that needed a lot of work. I decided that as opposed to renting I would buy a fixer-upper since that was what was in by budget with a young family. It took about 3 estimates for different projects on this house before I realized my budget was not substantial enough to hire professionals to do the work and I would need to do the work myself or it would not get done.

It took about a year of working evenings and weekends and more mistakes than I care to remember as I read through the entire DIYer section of the library and called on an experienced carpenter family member more times than could ever be fair but I put in floors, put up drywall, installed a new kitchen and bathroom, did tile work and ended up with a finished project house that was far from perfect but looked quite good.

My bargain basement fixer-upper was a respectable house worth far more than I had paid for it. When a job change made it time to move, I sold the house and made enough profit on the house even after all the work I had put into it to make me wonder about the viability of doing this on a more regular basis and I started "flipping houses" before the term was even popular. After 6 years and 4 houses on my own, I began to actively search out the properties and when my regular job as a finance manager of a large company called for moving again I decided to give a go at flipping houses as the full time job a go instead of moving again.

While I am not an expert framer, roofer, plumber, electrician, carpenter like the majority of the people that own construction businesses, I have gained a reasonable knowledge in many of these areas. I was very knowledgeable of finance and business and was able to see the places that allowed reasonable profit potential but in order to do enough houses to actually support my family in the way we wanted I could not do all the work myself and I began to hire contractors to do some of the work for me.

It quickly became obvious that with the contractor having to make a profit, it ate a huge chunk of my margins, so I hired first a general carpenter and then painter a painter to work for me full time. Unfortunately, when I did not have a property available to work on, I had to lay these people off and the lulls in work made it impossible to keep good employees so I began to bid on other jobs for slow periods to keep the employees busy and happy and allow myself another opportunity for income when I did not have active house projects of my own.

Now, 10 years later, I have 15 fulltime employees, many of whom have more experience in carpentry and construction fields than I do. I still spend a fair amount of time working with them on the houses I purchase to flip, though better than half of my time is spent either looking for houses to purchase or finding other jobs for them. I try to have at least half of their work allocated to my own projects at any given time.

By remembering that the business portion of contracting and construction is as important as the skills of the crews, I have been able to grow a viable and profitable company, relying on business and finance experience more than my personal skills at carpentry. Maybe I can share some of that experience here while picking up some skills and ideas on the hands on building areas as well.
 
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