It's not as easy as you think. You really need to take the time to learn and work for someone like everyone else does. If you don't you will leave yourself vulnerable to your employees since you currently know very little about actual construction work. For instance today one of my drywall guys had to go to the hospital for a family member and was unable to work. I had him scheduled to do some touch up for one of our best repeat customers. All of my people where already knee deep in other projects and no one else on our sub list was available. So guess what, I went and did it myself saving face with a great customer. If you were in my situation, you would of been screwed. From reading your post I recommend you go into investment banking.

 

We will operate appropriately with regard for our teams competencies. I don't think we would be doing the same kind of projects you are (home remodeling). One of the owners will have years of experience in construction management. I am thinking about building residential and commercial real estate using subcontractors. This would be done for family and a few friends involved in real estate development. It would provide us with an opportunity to establish a track record, although the other two owners would have years of industry experience. I will take at least one year to work in a project management position. I have seen accountants, lawyers, and people from all backgrounds start contracting firms.

I know I'm going to do this regardless of what is said here. Their is a way.

 

A fool and his money are soon parted.

 

How do you ask for someone's opinion and then say I dont care?

Daddy's little boy or what? Too blinded by money?

Buddy,in this business they will drop you from your pink skies in a month if you lucky or in a week if you are not...thats if they dont find you in some pit/lake/river for screwing around with someone else's money.

People make sure the guy who won't listen to someone else's advice and gambles with their money is most likely getting buried in their backyard.

Not even joking.

 

And of course you at your early twenties learnt what it took most of the guys here 20 years in 3...you must be next Bill Gates,man.

Good luck

 

I'm not the typical 21 year old student in terms of intelligence or business acumen. I'm 21 and in masters level classes as an undergraduate because I'm far from stupid. I do have business acumen as an analyst who has advised numerous Fortune 500 executive officers on merger, acquisition, restructuring and leveraged buyout transactions. I'm one of maybe four students in Canada with experience working as an investment banking analyst in year two of studies. Investment banking analysts with two years of experience join Fortune 500 corporations as executive officers. Most of them join private equity funds which buyout Fortune 500 corporations and tell executives how to run them better. It would take you twenty years to know what I know about management and finance. I don't know your age, but it would probably take me the same time to know as much as you do about construction. I said that I wanted to make an effort to learn what I don't know, but you can only learn so much before you really need to just do it. I'm not going to spend twenty years learning what you know by working for others. I bring to the table an executives level of business acumen, intelligence, and a network. I'm sure I will find others to take ownership and management positions in my company. Their expertise will complement my own and make us successful together.

 

I Say...

If you were in the US id say, wait till Obama's out of the white house and true economic recovery starts happening.

Anyways...

A development requires thousands of dollars in post construction, warranty repair work after the work is completed. That combined with a nice drop in property value and a weak economy will ruin your dreams...

but as some advise if your going to really get into this is...

Instead of trying to be all you can be in a project like this, Hire the people who know how to run development projects, some schooling and a little training wont cut it out there. Hire an architects firm with a history of planning developments and proper estimation, get your general license and sub out ALL of the work. that takes the liability off of you and you get to sit back and collect a good profit at that point. your company will still have to deal with the warranty work, but you can get insurance for it all. Transferring the liability will protect you and its how all smart business owners run a company.

 

I agree that the economy presents fewer opportunities to develop real estate today.

I evaluated a number of multi-million dollar developments (50-400 million) in the United States and South Africa for a real estate private equity firm that provided debt and mezzanine financing to developers. I conducted extensive market research and independently developed detailed financial models to measure performance (i.e. IRR, Cash-on-Cash, Equity Return Multiple, etc.) and to determine viability for current & potential developments. I understand the nature of the cash flows and know that I will need money to be successful in this business.

I want to get involved with general contracting first, so that I have cash for future opportunities. It's difficult for developers to make a decent return if all they contribute is the land basis or less then 5% of the equity. It is a great idea to sub out all of the construction and I probably will during the first few projects. I mentioned that an architect is a friend and we will work together when I move from general contracting to development, but that is many years away.

 

hey man.. dont get all hurt by people putting your dreams down.. most people havent accomplished as much as you have and they find it hard to believe... Ive got 200= years of combined experience in construction in my family... from small remodels to county projects where done by the people I know. the advise i gave you was the same advise, in a way) that all of them gave me when i was bidding on a couple projects in my area with a general i know.

Transfer your liabilities, youve learned about that in your schooling right?
like what insurance on your car does, Transfers Financial Liability. if you start the process of creating a project like this today, it will take approximately 18 months before you get the green light to start building, by the time environmental impact analysis, drainage, soil, and all the other loops you got to jump through, it will literally take a minimum of 18 months before ground breaking

look man im 27 yrs old, Ive done enough business in my short life to know what it takes, Ive built businesses up, ran them to the ground, been in lawsuits, won and lost, i can say ive learned the **** they dont teach you in school, but schooling is a good idea to start with... why not go to school than work as a project manager for a major developer and learn about it all hands on, your young still and got plenty of time to make the big bucks... do it right and plan out every step you want to take

To be a contractor in these project takes exactly this, reliable subs to work with, reliable suppliers with great pricing (if needed) and an understanding of the work needed.
When bidding on a large project usually suppliers are bidding for materials to contractors, make some friends, get great prices, pray for change orders to go through and hope for the best. your first few jobs will be trial and error, but if you get a good firm to work for you or hire your own full time estimator, it will make your life easier. I used to do the bids myself, now i just pay some one $250us to do a bid than $750 more if my bid is contracted

 

when your doing your analysis on major projects do them for the area you want to work in, remember there is about a 15% profit on all of them with 5% margin for repairs, total 20% profit if no repairs are needed. Thats a very good profit, and if your working for a reputable developer, you wont lose out on money unless they go bankrupt.

the money on your end will be easy to come by, banks will loan the money to you with the contract as collateral, the developers insurance will cover you from errors on his part, and usually you dont even have to pay for anything except your insurance, bonding, labor and company costs out of your pocket at the beginning of a project

 

look man im 27 yrs old, Ive done enough business in my short life to know what it takes, Ive built businesses up, ran them to the ground, been in lawsuits, won and lost, i can say ive learned the **** they dont teach you in school, but schooling is a good idea to start with... why not go to school than work as a project manager for a major developer and learn about it all hands on, your young still and got plenty of time to make the big bucks... do it right and plan out every step you want to take

I'm taking a dozen courses online at BCIT in estimating, construction processes, surveying, construction law, construction contracts, ect. I'm also interning this summer as a project manager. Afterwards I'll work as a project manager for another year. But who knows? Maybe I will finish working a year as a project manager and feel uncomfortable going further immediately. I think I will be ready if I start to learn now.

I think your real life experience matters more then anything and that's all I want to gain. I'm tired of school. 99% of what I learned in school was not applied as an analyst because everything is done way different in real life. I have a feeling that I will realize the same thing after finishing a few courses at BCIT and working for a few months. It also seems to be that I learn 90% of a job within the first year. The benefit of working longer then a year as a project manager may be very marginal. This is why I want to just go out and do it. The only way to learn seems to be by doing it.

 

try ICC international code council they might have some material you can learn from

 

That looks like a good site to learn about building codes.

A few of the courses I'm taking by distance at BCIT are accredited by the Canadian Institute of Quantity Surveyors.

http://www.ciqs.org/public.asp?WCE=C=47|K=107870|RefreshT=107868|RefreshS=LeftNav|RefreshD=1078681

After a year of completing courses by distance, I may take night classes to attain one of these designations as a quantity surveyor (link above). Besides estimating, the courses cover many other aspects of construction and I will have completed 80% of them already. It would only take three or six months of night classes to finish the others and gain the designation.

I was a student member of the Urban Land Institute for a while, what do you think of that organization?

 

What school is BCIT? I've been thinking of taking a few online courses is construction management.. You sound well educated, so I'm assuming this BCIT may be wisely chosen school on your part.

Thanks
Ron

 

My gut feeling is, this young gun is speaking BS about his corporate background. If I'm wrong I apologize. Maybe things are different in Canada. Having grown up with a Father who worked at the top of the US corporate world and later had his own consulting business, I know for a fact, if you lived in the US you would not be in the position that you say your in at 21. You say your still working towards your degree? If I was in the corporate world I wouldn't be asking someone that's 21 how to best run my company. Even if your a student at Harvard Business School it wouldn't happen. Now if you said that you work at a company that does those things, and you assist in doing those things, then that would be more realistic.

When it comes to owning a construction business or any business for that matter. No schooling will replace real life experience. In the US some Universities give older students credits for their work experience! In the US having a Degree will cost you $100,000. Having real life experience when you want to start a business is great. Having both is PRICELESS!!!!!!!

Look at it this way. You will probably work for 50 years or more after you graduate. Taking a few more years to gain helpful experience will go a long way towards whether or not you succeed. I know first hand, you should never have business partners if you don't understand 100% what their job is. Just because someone is a friend or family member, things can, and usually do get ugly at times. How would you feel if you busted your ass working 100 hour weeks for 10 years, only to loose everything because you didn't know that, your partners were doing things wrong, or worse, breaking the law. It happens.

Asking a lot of questions is a step in the right direction. You just need to try doing what some suggest. There are a LOT of GREAT GUY's here that will be happy to "Advise" You for FREE :clap:

 

you been lurking around here for a few months and you come up with a first/second post like that? you ain't too bright after all:no:

 

Is this towards me?

Never Mind. I figured it out on my own!

 

no,you never said you were lurking here did you?you need to start at the top of the thread and read...i know but it's a requirement:sad:

 

I did read it. That's were the "never mind" comes in.

 

Here's a million dollar tip.
Don't do this. "This would be done for family and a few friends involved in real estate development."

 

I don't know if this guy is serious or not, but here we go:

After reading your post, there are a couple glaring issues you are going to encounter. Firstly, the lack of on-the-tools experience (as another poster pointed out to you) is going to be a problem. I understand you saying "Oh, we won't be in that kind of business", but that is 100% the wrong attitude for a start-up to have. You 100% HAVE to understand what the guys on the tools are doing so you know when you are getting the run-around from subs on job costs etc. You also need to know exactly what is involved in the day-to-day operations so your bidding process is accurate. You can use a generic blue-book estimate, and while that may work in the short-term, it will screw you in the long-term.

The only way to remedy this is to get time on the tools. You don't need to become an expert, but you need to be able to understand the lingo, and be experienced enough to know that when the form-work crew says it took them 8 hours to do a job, and your inexperienced ass can do that same job in 5, you can turn around and ask what the hell happened. Without that, your business will constantly be eating the 3-hour cost difference, which long-story-short will cause your business to go broke.

The second issue you're facing is capital. You're in finance, so you should have an easy time understanding this. All your materials and labour will require cash. Either you have a large ($500,000) bank account flush with cash, or you need financing. Being a start-up, good luck getting a $500k line of credit. If you have access to capital via family or something, then you might be able to work that. If not, then you will have some serious problems. A 10 mil revenue operation with a 15% (generous) profit margin means you will have $8.5 mil in expenses that somehow will need funding. You'll also need to be able to pay the $400,000 tax bill that Mr. Harper will tell you your business owes.

I appreciate your enthusiasm, but unfortunately there are realities to the construction industry that you can't get around with financial analysis. (Like the saying goes, if analysts are so brilliant, why aren't they running a hedge fund making billions instead of taking an $80,000 paycheck.) You'll most likely be damn good at cost accounting, but if you don't know why your expenses are the way they are through lack of industry time, you won't know whether you are doing alright or not. Your company won't be getting jobs, and you won't know why.

That being said, it sounds like you are on the right track with taking industry courses. The only other thing I would recommend is getting a couple years of real tools experience. Learn how to do the work yourself, so that even if you never have to (or desire to) fill in in a pinch if your crew is caught a man short, you can at least tell when guys are screwing you around and that your bids are accurate. Oh yeah, and get some really deep pockets.

So take it for what it's worth. I'm an accountant who deals with trades companies on a daily basis. I also was in the trades for 5 years before I made the switch to white collar. And trust me, degrees and financial analysis and all that fancy jazz is no replacement for experience. Listen to these guys who have been feeding their families with the businesses they have run (successfully) for the last 20+ years. They know what they are talking about. I just add numbers.

 

Hey, even a blind squirrel gets a nut once and a while.

Thank goodness you didn't say you were going to focus on green construction or I might have just thrown up a little in my mouth.

I will offer some advise: on your way to making millions, remember that people help you get there, not money, and not numbers. Treat people with respect, listen to their ideas, foster a culture of trust and the money and numbers will follow.

Oh, and pay your subs! On time, every time!