Innovative Real Estate with Three Squared, Inc.
As specialists in efficient residential and commercial prefabricated design, Leslie Horn, Breck Crandell, and Jill Ramirez of Three Squared, Inc. share their greatest insights, tips, and case studies from their years of experience in the industry. They'll be giving you their best advice through, trainings, guest features, and Q&A segments so you can turn your innovative vision to a reality.
Innovative Real Estate with Three Squared, Inc.
Hot Takes On The AEC Industry With General Contractor Ty Petrie
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General Contractors play a pivotal role in the AEC industry. Not only do they manage the construction of projects, they also act as a liaison between clients and architects, along with many other responsibilities.
It takes the right kind of person to do this job and do it well, and we are lucky enough to work with a great local Detroit GC - Ty Petrie.
In this episode we sit down with Ty to talk about the AEC industry from his perspective, and why it matters to build a sense of pride in the work you do.
Here's a glimpse of what you'll learn:
- Who is Ty Petrie and how did he become a general contractor.
- What responsibilities do GC's have.
- Challenges with labor, materials, and financing
- How do we build homes that last longer than their mortgage
- Project highlight of the week: Gateway Industrial
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Welcome to the NFL Real Estate Podcast with your host, let's go. You're a real estate developer and taught you everything we've learned about designing and building innovative owners multifamily ethics infrastructure. On this podcast, we'll be giving you our best advice, training, and QA segments so you can learn from our years of experience and make your innovative vision a reality.
SPEAKER_03Welcome, welcome back to another episode of Innovative Real Estate with your host, 3Squared Inc. Today we'll be talking to a very fond guest of ours, someone who's involved in a lot of the projects that we're working on, past, current, and present. And we'd like to introduce you to a general contractor who uh who is collaborating with us on a number of projects. So before we get into that, we're gonna start things off with a project highlight of the week. Uh this week's highlight comes to you from Detroit, Michigan. At the intersection of the Southfield Freeway and Highway 96, there is an industrial manufacturing plant that got a hold of our firm to see if we could help them create gateways, literally gateways of shipping containers, stacked in some very unique ways, uh like two containers on end and one bridging across the top. It's pretty wild looking. You can see it from the freeway. And their name is none other than Gateway Industrial Center. Surprise. Very wild naming there. Uh so the contractor that we have on the call today was a collaborator on that project. Uh, we worked hand in hand to have a turnkey solution for the clients from design through the processing of the chip and containers, the locating them on site, and then finishing everything out. So Gateway Industrial Center uh is a massive hundreds of thousands of square feet industrial complex. But the uh the gateway and the container entrances into each of the suites was something that we were involved in. Uh, kind of like a very pragmatic building, but adding a little bit of design onto the points where people actually interact with the project. So I thought that was a nice touch. Uh cool owners, it was a great project to work on. And we got the thing done. And it's an ongoing project. So as they continue to add more tenants to the industrial manufacturing spaces, they will continue to add more gateways, and we are on call for those developments in the future. So without further ado, I would like to introduce a buddy of ours, uh, a very talented individual in a lot of different compartments of life, uh, and um someone who is very close to me because he's actually building my house. My house is the Cochrane home here in Detroit. It is the prototype of home, H-O-U-M, in collaboration with Three Squared Inc. And we'd like to introduce Ty Petrie of Living Edge to the call today. Ty, how are you doing?
SPEAKER_02I'm doing great. Thanks for having me on here.
SPEAKER_03Cool. Uh, can you give uh can you give our listeners just a brief introduction of who you are and what your past lives have included that led to you general contracting in the city of Detroit?
SPEAKER_02Oh man, that's uh I don't know if it's that that would be brief, but I'll do I'll do something quick here. So yeah, I've been a uh contractor in Detroit for the past uh about eight years. I've been living in Detroit for a little more than 12 years, um, originally from New Jersey. Um lived a few places though, in between the two. Um have been doing construction in a variety of forms my entire adult life. Um one of my first jobs, actually, not quite construction, was as a rock climbing guide. But from there, um I got into working as a rigger for a um a construction company that does zip lines and kind of started getting into a variety of different that got me into carpentry and then kind of was able to wear those two hats, rigger and carpenter, as like in a variety of different work that I did after that. Um I've done, I also worked at one point for a um a fabrication lab that was connected with MIT, um, learned how to do um working with CNC machines and uh 3D design work and stuff like that. And so have that as my kit. I now own a um a CNC router, which is I'm actually sitting in the router room because I uh I rent space from a larger collaborative shop space. And so this is the only room that's sound insulated. Um and uh and yeah, so I've been doing started off with my general contracting and kind of I think a way a lot of carpenters do, and just home renovations or smaller projects, I've slowly grown into doing more new construction, um, especially with the collaboration of Three Squares. Um, and I'm now you know, Brex Home is the first new home that I am um I'm building um from the ground up. And so uh yeah, that's uh that's uh a brief intro of my path so far.
SPEAKER_01Wow, you left out one piece. You were an arborist. Yeah.
SPEAKER_02That's right. Well, the first time, yes, the first time Leslie and I ever interacted back in 2015 was I trimmed a tree for three squared. The tree that is right next to the three squared office, I was the one that trimmed that tree.
SPEAKER_01Top a tree. First, we had to identify what it was, and then number two, we had to um identify if it was salvageable or should we cut it down. And I was so sad if we had to cut it down and you said nope, we just need to trim it. It got burned here and it's been damaged here, and she is thriving.
SPEAKER_03It's in full bloom right now, but it's gorgeous. Beautiful.
SPEAKER_01That's amazing. It's nice to have you on the call today, Ty. Really, truly, you know, I've had the pleasure of working with you uh on the on the gateway project. We we were able to bring you on as the general contractor uh for the installation and for all a myriad of other things for that project. And I just want to say out loud that I was impressed with number a couple of things. Number one, the level of your level headedness throughout the process. Um, sometimes these projects can get super crazy and you were a sponge. I mean, this was I think the first container project you worked on. And it didn't phase you. Uh it might have, you know, at night if you went home and um, you know, test us out or man, this is just you know wrong or messed up, and I'm doing a PG version here. But I I I was always impressed with your level of professionalism and the way that you communicated with the client and the way you got things done. And it was super organized. And I just we didn't have to worry, we didn't have to worry about a thing. And anyway, I loved working with you on that project. It was a really great intro um into the life of Ty as a general contractor. So I just on a side note, thank you.
SPEAKER_03Well, thank you. Yeah, not everybody's set up to be a general contractor, it is uh not a path for the meek at heart. And I don't think I've ever met a general contractor who's a happy person every single day of their life. It it takes a special kind of person to get into it. So I kind of want to ask you like what what drew you into general contracting? Because this is a fraught industry that has a lot of challenges, some of which we'll get into today. But like what led you to make that decision as a path forward?
SPEAKER_02I ask myself that question sometimes too. Um, it's it's just something that I I have a skill in. It's one of those things when you realize that like you're able to do something better than um, I'd say maybe you're not not all the others, but most of my peers, at least currently, like I've been able to, I'm I'm good at it. So I'm it's it's easy for me to like take on the role. Um, and that's kind of how it started. I mean, I worked, I mean, I before I was I had my license, I worked for another general contractor, and um he in truth, he was I don't want to name names, but he's it he wasn't licensed, his dad was licensed, worked under his dad's license, and so he really didn't have the experience or you know, or really even the discipline to work uh on making sure that he had all the knowledge that he needed. Um, and I just learned that I really didn't like working, I didn't like working for somebody else who wasn't on top of their game. Um, and I and I think a part of that is it's also like if I had found somebody else who was really good as a general contractor, I may not have become a general contractor. I may have ended up just working in somebody else's, you know, underneath somebody else that I enjoyed working under. But that wasn't the case for me. So I ended up kind of having to go out on my own to do to kind of control my work and to make it an enjoyable process and not make every day like a struggle in its own right. Um now, yeah, like you said, this is a very difficult industry. It's a very, very hard industry that um, especially, I mean, I don't know. I mean, I've done it here in Detroit. Um, I think that is makes it even more difficult in some ways. It also makes it easier in other ways where I've had um less competition. Um, I'm I get a I if you can do good work, you can get you kind of just a shoe-in for things, and it's just less less competitive betting, um, uh like bidding on things. Um so it's definitely like you know, it's a double-edged sword here for um for a lot of reasons. The labor market is is a difficult one. Um, but I think that's the case across the US. I hear a lot of complaints about the difficulties of the labor market and the difficulties of this industry. And it's um that and it's gonna go in a direction, I think, where um, you know, just kind of I know we've talked maybe about having this conversation point a little bit later with with talking about labor, but just to point out that it's um it still is not well paid enough in some ways because when the main constriction, I mean, for the for the kind of your lowest tier workers, and the biggest constriction is that um you know, homeowners and most people that are doing the work just don't have bottomless pockets. Everything has to be constricted with like financially as much as possible, um, because pricing is already over most people's like what most people can afford. Um and so it's um it's it's a difficult thing to balance bringing in people and and and and helping them on a career path where they will be compensated more fairly. It's very difficult work, it's hard to learn, it's hard, it's hard on your body. Um, and so a lot of people just don't want to try. I mean, it's you're gonna have to be dealing with several years of um of being not where you want to be for the amount of work you're putting out financially before you can really break into it being a really, you know, um a really lucrative thing. And I think a lot of people that stick with it find their spot where it's lucrative, but it doesn't happen out the gate. Um, and I think a lot of people don't like that scenario or that relationship with their work. Um and I wish that we could maybe find a way to make that easier for people. Um, but as is right now, it's uh challenging. And I think you sent me a meme recently, or was maybe not a meme, it was an article, something about how what is it, one in like for every seven people that leave the construction industry, one comes in. Um yeah, it's it's it's not good right now.
SPEAKER_03Yeah, we talked about that in one of our recent episodes with Sarek and Darren uh talking about replacing the workforce with with robots on the job site. It's fascinating. But I mean, there's a lot happening in this industry. I don't think that there's any doubt to the fact that we are in a labor shortage. And yeah, for every seven guys that leave the workforce, um, you got one individual that's replacing them. And that's that is not enough, which means that costs continue to increase, and our our pool of qualified individuals is is drying up quickly. But I do want to point out you took the roundabout answer to my question, but you ended up answering it by describing the fact that why are you a general contractor? Because you're good at it, because you're passionate about it, and because there is a path to a lucrative business model. You just have to put in the time and the effort. Uh, and to that end, it seems like a worthwhile endeavor for you. So, what I'd like to do is break up the next portion of the conversation into like, let's let's focus on three categories here, um, because this is what I think a lot of people need to hear uh and direct from the horse's mouth, because me explaining it as an architect doesn't really always get the point across. It's like hearing it from the general contractor, the one who's actually going to end up contracting with you to build the physical product of our design efforts. And that is let's talk about materials, a material availability, and what that market looks like. Let's talk a little bit about labor and the challenges that you personally are seeing in the labor market. And then let's talk about financing, how the money flows to both of those other entities. They're all kind of tied together and they're all tied through financing, but like banks individually, like why don't why don't we talk a little bit about how banks fit into this overall process? And I know Leslie has a myriad of questions that he's gonna kind of throw in there as we go, but why don't we start with the material market? What have you noticed in terms of trends? Where are we at pre-pandemic to today? And what do you see the future being as we move forward with some of the materials that we're used to using on a job site?
SPEAKER_02Oh man, yeah. So I mean, materials have definitely not completely worked out like the kinks from the COVID uh the COVID upheaval that went through that industry. Um I would say in general, um, I mean, costs have definitely come down from where they were, um, particularly for you know your general building lumber um and even some other aspects of uh of other materials that go into it. But I would say, yeah, things are generally up still overall from before. I mean, obviously, inflation has affected a lot. Um, and and frustratingly, I feel that uh quality has also gone down. Um, quality on not just your general like to buy lumber, but on all kinds of things. I mean, I I think I feel like um, and this goes this goes into labor more broadly. I mean, this is I think that a lot of this a lot of these materials um they're made in, you know, especially if they're wood, you know, kind of like more uh wood-related products, for example, like LVLs that are laminated, veneer lumber. Um, I've had issues on your house, Greg, where like the which those boards, which are supposed to be perfect in all kinds of ways, are not made right. You know, they have thicknesses that vary or whatever, and you're just you ended up having to figure out how to to to work with that or or fix that in order to um to fit your need. Um and that's it's an unfortunate thing where I feel like um I mean, this gets into something that maybe we're not trying to get into today, but culturally in the United States, I think we're having a lot of people that are tired of our our status quo of kind of the haves and the have nots, and and it's turned into a lot of people that are in the workforce just not caring about anything anymore. It's an unfortunate thing because we still all depend on each other and kind of like a you know, a social network of sellers speak, of our um of how this world works. And we all kind of have to play our role to help that everybody else will also play their role, and we can all like live somewhat uh reasonable, like you know, stress level and expect expect good quality to a level, um to a certain level. But um, so yeah, I feel like with materials that you know factory workers have really kind of dropped the ball in a lot of ways, and it's not entirely on them, but it is the case. Um and we have issues with materials you have to double check your materials a lot. You have to, you have to, you know, there's more material waste, and it's an unfortunate thing when you're buying things and getting ready to use them only to find out that you got to return them and get them replaced. Um, I mean, your your windows and doors example, right? We have issues.
SPEAKER_01Um and you're seeing more and more of that on an on a regular basis.
SPEAKER_02It feels much more common right now. Um you know, and I you know that's it's anecdotal as well. I mean, I'm not collecting data, but um, you know, it does it does feel that that's um it's very common for there to be material issues.
SPEAKER_03So while the price isn't at its all-time high that it was peak pandemic, it still fluctuates, but all we can say is there is a consistent inaccuracy of the quality of material.
SPEAKER_02Yeah, prices are definitely still up from before pandemic and quality is down.
SPEAKER_03So prices are up, quality is down. That's that's the material market right now.
SPEAKER_02Yeah, wow. It's a difficult thing to navigate. I mean, it's uh it it does not make your timelines go easier when you have to to kind of continually check on that.
SPEAKER_01Um yeah, let and I think I mean I'm glad you said the word timelines because when timelines are extended, delays happen, costs rise, it's just uh a snowball effect after after a certain point. Um I think you can be the most organized human on this planet, but if if everything is not cooperative um in nature, it's it's I mean, I think you've even seen it on seeing it on Brexit home. And um so it's it's super interesting. And then you know, then you've got to have that terrible conversation with the client about cost overruns. And you know, it's it's how you do your contracts. I mean, it's it's everything, it's you know, it's I don't even know why you're in that industry. I'm glad you're in this industry. I know, and um, I think you have the right temperament to be a part of that. Um, it is it's just a tough industry. Um, and I don't want to bring this all down because I know that prices have gone up. I mean, we've had clients who started a project with us, um, albeit maybe two, three, even four years ago, but you know, the prices have gone up 40, 50 percent. So the the house that we designed way back in the day isn't buildable in their budget anymore. Um, and why do you think people have unrealistic expectations in budgets?
SPEAKER_02Um, I mean, I I I I'm answering my own question, but yeah, I I think well, one of it, I mean, our current kind of social media times, people see all the bells and whistles. So on Pinterest, Instagram, you see all these fancy things, and everybody wants those fancy things. Um, and I think I mean that that leads to people not recognizing the little ways that the cost of what they want are just creeping upwards. Um and it's um it's similar to like even just square footage in a house. People want more square footage, but square footage is cost. Um, I mean, if you look in Detroit, I mean we have lots of like kind of blue-collar kind of like homes, which are very, very small footprint. Um, they're built in the 50s and the 60s, but they're very, very small, small houses. And they that was what was built as affordable housing for um for the working class in Detroit. Um and nowadays, I mean, you don't you don't see any house being built to this at that size of these are like you know, by today's standards, tiny homes. Um and you know, so we have kind of an we we have more stuff that we put in these, we have more technology that we put in these homes. Um, everybody has an expectation that their home will have a certain level of technology. Um and yeah, I mean, I think that that's just one of those things that we need to um, I mean, that's outside of the realm of our, you know, our labor increases and our material cost increases and things and such like that.
SPEAKER_01One of the things I'm glad you didn't say is that it's because of architects um, you know, being irrational or you know, trying to do things um because it it does come from the client. But I do want you to kind of expand just a tad about the relationship with an architect because I know that building materials are a huge key to this. Um and you know, what advice and/or tell me a little bit about your experience? Why do you I'm gonna just assume you enjoy working with Breck? Um, why do you enjoy working with Breck as an architect?
SPEAKER_03Or don't you?
SPEAKER_02Well, I mean, Breck and I, I mean, okay, so an important part of any relationship like this is the ability to be honest and be be kind of you know, just kind of forthcoming, making sure that when we have issues, we can talk about them. Um, I can't say that I agree with all the decisions that Breck makes, and I bet he doesn't agree with all the decisions I make, but we have a way of communicating and even maybe even ragging on each other if it's needed. Um so it's it's it in that sense, like it's an ad, you know. I like Breck, we have a good relationship in that sense. Um, there are definitely, I understand why Breck makes certain decisions as an architect, and I wouldn't necessarily make those decisions myself, but I'm in a different set of shoes. So, I mean, for example, example, like uh the uh the kind of like what the client expectations are, what we were just talking about. From an architect's perspective, you're trying to appease this client. You know, you you want them to enjoy the relationship with you. They want them to you want to give them, in a sense, what they want, even if What they want is conflicting on a variety of different fronts, whether it's cost to design type you know uh confliction. Um and so I can understand why cost to creep happens because you're always trying to make maintain this relationship and and keep it going. Um it's it's a little bit different for a contractor. Um, because I'm not necessarily once I'm like in the door, right? Once you've committed to working with me, then you know, I'm not necessarily trying to to sell you on anything. I'm just trying to get this project done and to knock it out and and and do it well. And you know, part of all of that is by controlling expectations. So I have to give a lot more, I'm I'm much more on the harsh truths side of really like kind of communication with clients. Um, I tell them why that what they're doing isn't going to work out or why it's gonna be more money. Um and you know, that's just part of a relationship. I mean, it's a general contractors thing. It's for you know, it's it's why a lot of people say general contractors don't have a lot of friends, is because you're you're kind of harsh truths with everybody. It's not just clients, it's not just architects, it's also other subcontractors and um material suppliers or whatever. I have to I have to be the person that that keeps things real. Um because being, you know, not telling the truth doesn't make the project get done well, you know.
SPEAKER_03That's a great bridge into the next subject here, which is which is labor. And we've touched on the points of like labor suffering, we have a shortage, but in your day-to-day interactions, like in my mind's eye, a general contractor typically arms themselves with like a crew of go-to's for each category of construction. How's that going? What's what's the narrative right now in the industry? And do you have a set crew of people, or is it a rotating door, or do these hard truths have to keep coming up at the individuals that you've built relationships with? Just give me a temperature gauge on like where the industry lies in terms of like your your actual labor, like the people you work day to day with on a job site.
SPEAKER_02Yeah, so there's all different types of labor, right? Um, so I mean, obviously, so some subcontractors I have, you know, I would say with most of my subcontractors um that I work with, and I do try and stick with the more or less the same relationships, although there's definitely folks that I, you know, I'm you know, for example, in the plumbing realm, I'm looking for you know more plumbers to like kind of build relationships with because I haven't had the best relationships there. Um and you know, in a variety of ways, like labor is tough, and you you want to be able to, it's like all of this, you have to have a relationship, so you have to have a give and take. These guys are trying to earn a living. You can't just you you you have to recognize that like I'm a bit of a perfectionist, a little bit OCD, but I have to recognize that you know, to in a lot of things, it's not necessary to be that much of a perfectionist, you know, like a slightly less, you know, ideal like work or you know, performance still gets the job done as good as it needs to get done, you know, for the function of the finish sometimes. So yeah, I have to find that balance and where to pressure where to put pressure for good better quality and where not to, and when not to, and when to push back on price and when not to. Um and it then, which is a difficult thing because I don't want to, I want everyone to come and I want to work with subcontractors that are don't feel like I'm you know always pushing their their budget down or their their profit down. I want them to come in to be able to make money, but it has to also recognize I'm also in the sense representing the client, and I need to make sure that the uh that the client's interests are cared for too. Not everybody is, you know, it's not about just coming and using everybody as a piggy bank. Um, so that has to also be you know navigated. Um the I mean, kind of into labor as far as I mean, I'm kind of what I've talked about before. I mean, you have to kind of work on building a culture of of kind of pride in the work that you do. Um there's I mean, work, pride and work, I think, is a is a great thing. And you know, I we don't have to get into kind of the spiritual level of work we do in our lives and you know what that impact is. Um, but I think that that's somewhat you know what needs to be kind of at least somewhat brought into that focus is that you know, this is you know, this leads into so many levels of self, the quality of the work that you do, um, that really can enrich or you know deplete your quality of life. Um, if you're not, you know, depending on how you're going about it. So um I think that you know, how do I navigate that? I mean, I you know, I I there's a lot of different things that I do to try and um I sometimes I have really hard conversations with subcontractors. Sometimes, you know, we're joking around and and and like having a good time about what we're getting done.
SPEAKER_01Um you know, Ty, it's really super interesting because I mean we we see it. I mean, we see the the level of craftsm craftsmanship or or pride that you take and what you deliver. And we've often said in past podcasts that right now GCs, you know, they're they're resistant to change. I I want you to know we've said those words. Uh I don't find you um in that category, which is probably one of the reasons you're on this podcast. And what we are also noticing as a culture in this country is that they're they're they're cheaping out, they're going for lesser materials. So people don't realize that in you know six years they're gonna have to replace windows or they're gonna have to replace this or that. Um and oftentimes, and and I see this with a lot of quote, the affordable housing market that, and again, it's and it's not a big blame. It could be developer, it could be GC, but as a culture in this country, we're having a hard time building houses that will last longer than its mortgage because of the the cheapness and and and sometimes you just can't help it, you know, you can't afford to buy a higher grade of lumber. So, how do we address this in this big country? Like we've got this labor challenge, we have a material challenge. How do we address this in order to meet the demand of housing? And I know that's a super big question for a single general contractor, but I I I want to know what your I'd like to know what your take is on this because I think well, I'm just gonna stop. What do you think about that?
SPEAKER_02Um so let me just clarify your question. Is that you know you're thinking you're asking about the the challenge of affordable housing? You're you're more about the quality. Are you interested in like what do I think about the general contractors that produce this level of lower quality that is not very good? Or do you what do I think about?
SPEAKER_03Well, let me rephrase just in the lines of the final conversation, which is cash flow on these projects, which is yeah, a piece of the puzzle. Like general contractors essentially hold the purse strings of the majority of projects unless your clients are paying cash. Most of these projects are financed by an institution. Appraisal values don't match construction costs. And what Leslie's point is how do you build a building that will last the length of its mortgage on a new construction loan? Like, what do we do with the cash flow issue and the cost of rising construction materials and labor versus the work that we have to get done? Where is the balance in this situation? And how can we start to even address this?
SPEAKER_01Thank you, Breg.
SPEAKER_02Yeah, I mean, I think in the so in the US, one of our one of our issues that's worked against us is our sprawl. We're used to having huge spaces to build big houses in. Um, and I think the solutions to some of this do come back to design. We have to design more effective use of space and keep things consolidated in smaller space. And that is one of the that'll be one of the keys to keeping costs down. It's size, everything you the bigger you go, the more materials, the more labor, and all those things to just pile on. Um, so I think that, you know, as far as you know, uh that part of the question, that's that's that is a part of the thing. I mean, as far as you know, in defense of everyone's, you know, general contractor out there, just in a small way, general contractors are asked to do a lot on all fronts, not just manage labor or maybe even do some of the labor, not just kind of manage client relations, but also be the front with the bank and having that conversation and keeping them happy on their what they need paperwork-wise, doing all the kind of back and forth paperwork on that front, and essentially holding debt throughout the course of the project. The contractor is responsible for, especially if it's a bank finance project, it's responsible for fronting the labor and materials, maybe not all the materials. Banks often pay about 50% fronting on materials, but but but general contractors hold debt um and in a lot of ways for their clients. Um, and that's a difficult thing for most people to do and to manage. It's a difficult thing to grow in as a contractor. It's been one of the difficult parts of scaling for my business has been being able to for banks to trust me that I can hold this debt. Um and um I feel like that relationship, it is it's it's a toxic aspect of how banks operate. I understand that it's a method of them protecting themselves from different aspects of fraud, um, but culturally, it is essentially everybody pushing the liability of everything off on a general contractor when it's not really the general contractor's project, it's something that they're doing for somebody else, for somebody else's vision. Um, and it really, I feel like the the concept of why of the reasons why that is should really change for us to have a maybe a healthier relationship within the construction industry between general contractors and everyone else. Um, I mean that and I say that just because general contractors are asked to do so much, so that's why they get short on doing something different or learning. I mean, all these new technologies that keep coming out, it requires spending time learning a new skill or learning a new thing. And generally you don't get paid to learn. You get paid from having learned if you do it multiple times, then you can make profit off of having that new skill. But the actual time spent learning that is not a profitable time. And you know, there's so many demands as a contractor that you really it's it's it's difficult to be like, okay, I have time to figure this out. And if you mess it up, it is often on your dime to fix it. So your cost of learning is is is high, you know.
SPEAKER_01Yeah.
SPEAKER_02Um, so there's very little support in that way for for general contractors and very little understanding that I mean, I think that what banks should be doing is I think banks should be a hundred percent fronting all material costs. Um, I don't think banks should do just part of material costs, banks should be fronting 100% of material costs.
SPEAKER_03Whoa, whoa, whoa, that makes too much sense. Yeah, I mean, you understand how long it took for our project to find a loan. Yeah, and that was a number of factors. I mean, it's post-pandemic. Uh, you know, shame on us for thinking they'd be gun shy in this situation. But also, we are in the city of Detroit, which has uh a whole other layer of challenges to it. I mean, in 2022, when we received our official building permit for the Cochrane home, we are one of eight single-family residential projects being constructed in that year. So finding a bank that's willing to loan you on that comes with their own set of challenges. And we have on this podcast have bankers and appraisers come on and give us their side of the story. But this is really fascinating to hear your side from a very passionate point of view of it's hard to scale, it's hard to love what you do when you have to shoulder the debt on top of these other challenging parts of this role that you're playing here. And that makes a lot of financial sense when you're coming at it from there. Like, how do you start this up? And it makes sense why there are huge conglomerate construction agencies that won't give single family residences the time of day. If you're listening to this podcast and you're trying to build a house and you're having a hard time finding a builder, we've just highlighted a lot of what those challenges are that you're facing and why it may be hard to get somebody to commit to this, because you probably have a whole lot of bells and whistles that you're forever home. There are all these things you want to accomplish. You've got your Pinterest board saved. But the fact of the matter is, is there's a cost to every one of those decisions. And somebody has to fall on the sword for those costs. And unless you're willing to do that and have those tough conversations to get over the hurdles and to make concessions, because building any project is a never-ending series of concessions from wall parties, then you're probably not going to find the right person to work with you. And for that, I have very much appreciated our relationship and working together on this project and many other projects that we're working through at Three Squared. Now, I'd like to start to wrap up this conversation, but I have a question for you that I don't think anybody saw coming. Given all the parameters we've talked about today, what would an ideal project for you be? What would be the dream project you just couldn't say no to? And what's the rationalization behind that answer?
SPEAKER_02Well, first and foremost would be client, like personal funding, right? No dealing with a bank. You know, that would be first and foremost. Um, so yeah, it's it's a that does limit you down a lot because not everybody has that kind of money, but that's that's like makes things much easier because there's a lot less paperwork that has to happen. Um, another thing would be is is having somebody that knows how to make decisions. You don't want to be in the project and have decisions being changed all the time. So you having a good design up front and having everyone pretty confident and happy with those decisions um really sets things up for a much smoother ride and success. Um, I think a lot of people feel like they want to get the ball rolling and they're like, okay, we've got the floor plan and all that kind of stuff. They don't want to make decisions on finishes, but finishes start, you need to start making um design of your rough framing and a lot of things need to take your finishes into consideration. So if you don't have finishes laid out already, it it can mess up the first steps of the project as well. So you you really need to have pretty much every all of that like navigated and and and decided, at least at least maybe your dimensions of your finish material. So maybe you don't know what tile you're using, but you're gonna commit to only having like a quarter inch thick or three-eighths inch thick tile. That way we can kind of navigate, make sure our floor levels are good throughout everything when we start the project. Um, like those kind of things they need to, you know, uh those two details I would say were both the financing and the design um having thought out would make it make make up a really awesome project. Um, and also it being like somewhat challenging. I mean, it's fun to do things that are not just you know, just a regular, you know, framed house. It's kind of it would be fun. It's fun to have challenges, you know, for everyone, I think, in some way. So um well, good.
SPEAKER_03I think I checked one of three of those boxes. So I'll take the one. That's all right. We're working our way through it. Leslie, any departing words or questions for Ty here?
SPEAKER_01No, I'm really looking forward to um future projects working with you, Ty, side by side. I I also find your level of communication just a breath of fresh air, as brutal and honest as it is at times. It's just um it's I think it's it's also delivered with kindness and and love and respect. And I think I believe that's really I I I I wish more general contractors Breck, even you and I were on a phone call not too long ago where that did not happen. And you know, I I have a great respect for you, Ty, and I'm looking forward to having you come on another call. And I'm looking forward to you know, new projects with you. I truly am. And I think with some of your insight, I'm hoping that people will take a listen to this. I I I hope your phone doesn't blow up. I know we're pretty protective of you, but nonetheless, I feel like um you you've done us well. Um, not just you've been a good steward, not just to us as a company, but also to the general contracting um industry. Thank you.
SPEAKER_03Thank you. So if you're interested in following up with Ty and his general contracting services, I would say follow along with the three squared at home projects that he's heavily involved with, which include the Cochrane Home, the Royal Developments in Fort Wayne, uh Steelhouse, among many others to come. Uh, so keep track on our social media pages. Uh, I know that we're going to release this with some show notes and uh and a couple of projects that Ty's collaborated with us on. And we look forward to our next episode. We'll talk to you guys soon. Thanks again.
SPEAKER_00Thank you.
SPEAKER_03Bye.
SPEAKER_00We hope you enjoyed this episode. And if you found it so valuable, you want to connect with us one-on-one, click the link in the description to tell us all about your project so we can help you get started. And to get notified on the next episode during Innovative Real Estate. Go ahead and subscribe to the podcast at iTunes. Get out there for the Python.