Latest / Big Talk About Small Business / Ep. 30 - Mastering the Dance of Development and Investment in Real Estate

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Ep. 30 - Mastering the Dance of Development and Investment in Real Estate · Big Talk About Small Business

0:04
Mark Zweig: Welcome back everybody to another episode of Big Talk About Small Business.
0:10
Mark Zweig: I'm here with my partner in crime, Eric Howerton.
0:15
Mark Zweig: What's up, Mark?
0:18
Eric Howerton: Everything's up.
0:18
Eric Howerton: Man, You've been dealing with some stuff, haven't you?
0:22
Mark Zweig: I don't deal with half the stuff that you deal with.
0:25
Mark Zweig: These things, no dude.
0:26
Eric Howerton: I really didn't.
0:26
Eric Howerton: No, there's no way.
0:27
Eric Howerton: There's no way.
0:28
Eric Howerton: I'm the first person I've ever met in my life.
0:30
Mark Zweig: Well then, I'm busy with a lot of small stuff that doesn't make the kind of money your stuff does.
0:36
Mark Zweig: I think that's the.
0:38
Eric Howerton: I'm just spending money man, I'm just spending money in town.
0:42
Mark Zweig: I spend so much money.
0:43
Mark Zweig: I closed on this house that Sonia and I are going to move into in like eight weeks.
0:49
Mark Zweig: Close on on Wednesday, thursday, I had about 15 guys working.
0:53
Mark Zweig: I added it up.
0:54
Mark Zweig: We've already spent $58,000 in a week.
0:56
Mark Zweig: Okay, I mean, I think that's a lot, don't you know?
1:03
Mark Zweig: That's a lot of money.
1:06
Eric Howerton: I mean a lot done though, have you, yeah, so I want to talk about that, because I think that what I actually was thinking about this just yesterday, when you said that before that, the very next day, you had all your subcontractors out at the property in one fell swoop.
1:21
Eric Howerton: One day yes, I did.
1:22
Eric Howerton: How do you get everybody there at the same time?
1:26
Mark Zweig: Well, you know, I used to be in that business.
1:27
Mark Zweig: Yeah, it certainly helps.
1:29
Eric Howerton: So you already have people in the role of that.
1:32
Eric Howerton: You know who to call for a certain thing.
1:34
Mark Zweig: Yeah, although some of our providers have changed since we got out of it.
1:38
Mark Zweig: We're just doing our own projects, but basically that's what it is, and you know, my experience as a contractor is that if you give people work steadily, yeah, you just keep them busy on one job from one job to the next.
1:54
Mark Zweig: If you don't make them hard dollar bid and if you pay the bill, what do you mean hard dollar bid?
1:59
Mark Zweig: Hard dollar bid means, like, I want you to do A, b and C.
2:02
Mark Zweig: What's that going to cost me?
2:03
Mark Zweig: Okay, instead of just letting them go to work and then give you a bill.
2:06
Mark Zweig: Oh, that's the goal that way.
2:09
Eric Howerton: That's the way I generally work.
2:10
Eric Howerton: Wouldn't that put you in a situation where you're like I mean, they might overcharge you, or?
2:15
Mark Zweig: It could, but then you never work with them again.
2:16
Mark Zweig: Ah, yeah, okay.
2:17
Mark Zweig: The secret is they all hate bidding.
2:19
Mark Zweig: Okay, and they're.
2:21
Mark Zweig: Either they're going to overbid it because they're all super busy Sure, the only way to protect themselves is to overbid it.
2:28
Mark Zweig: I mean renovations.
2:29
Mark Zweig: You never know what you're going to encounter.
2:30
Mark Zweig: Things change Every time my wife walks in or I walk in and change something.
2:35
Mark Zweig: You know what I mean, because there's stuff along the way and so I never make them hard dollar bid.
2:41
Mark Zweig: I give them work constantly, and the other thing is they want to get paid immediately.
2:46
Mark Zweig: So, like yesterday, my painter's like you think I can get $13,000 from you.
2:54
Mark Zweig: I'm like dude, you're getting ahead of yourself, okay, right.
2:57
Mark Zweig: But he's like yeah, well, I got to buy all you know, buy the paint.
3:01
Mark Zweig: Come on, we all had you know accounts with the paint company.
3:06
Mark Zweig: You go over there, you get the paint.
3:08
Mark Zweig: They give you a bill at the beginning of the next month for the prior month and then you got like 30 days to pay it.
3:14
Mark Zweig: So they didn't have to give me the bullshit about you.
3:15
Mark Zweig: You're not writing a check for the paint, I know that.
3:18
Mark Zweig: But I gave him the 13 grad anyway Because I trust the guy.
3:22
Mark Zweig: Yeah, and he will finish.
3:23
Mark Zweig: Yeah, you know, just trying to help him out Like maybe keep it going.
3:28
Mark Zweig: Yeah, I just.
3:29
Mark Zweig: But I want this is how I get fast service.
3:31
Mark Zweig: Okay, that's the point of it.
3:33
Mark Zweig: If you want people to jump through hoops, then you need to jump through hoops for them and recognize what they're going through, and so you already had all these people on Rolodex though.
3:43
Eric Howerton: Oh, absolutely yeah.
3:44
Eric Howerton: So like that, you Nobody knew that I've never worked with when you're.
3:48
Eric Howerton: When you were closing the house, you already had these folks and you said hey, on Thursday I'm with Exactly.
3:54
Mark Zweig: They were all lined up weeks in advance.
3:56
Mark Zweig: As soon as I had a contract, I started calling them, saying Get ready, this is the day we close.
4:01
Mark Zweig: I need you to be there.
4:02
Eric Howerton: Got it, and so everybody shows up.
4:03
Eric Howerton: Yeah, that's such a time saver right there, because part of the problem with this stuff is the suck of time.
4:11
Mark Zweig: You cannot manage these jobs closely enough.
4:15
Mark Zweig: I mean, that's the problem, like one of the reasons I got out of the business, aside from the fact that my wife hated it, which is a good enough reason, okay, and it's self.
4:25
Mark Zweig: Let's face it.
4:26
Mark Zweig: You know her.
4:27
Mark Zweig: Yeah, I mean you don't want her to be unhappy.
4:29
Mark Zweig: It's not going to forget what she told you yesterday.
4:31
Mark Zweig: No, she won't forget what she told you like six years ago, right, right, 10 years ago, understood, but it's you know just the amount of supervision and detail and how things go wrong.
4:49
Mark Zweig: I mean it just amazes me the way people can mess up.
4:53
Mark Zweig: And so if you really want to get a good job and nobody's got really super detailed construction plans around here for anything that we do.
5:02
Mark Zweig: I mean commercial jobs.
5:03
Mark Zweig: Yeah, you generally have a better set of plans because you got registered architects and to do them you get a permit and generally have better subcontractors.
5:13
Mark Zweig: So it's a little different world.
5:14
Mark Zweig: But residential it's like filled with incompetent thieves, Okay.
5:20
Mark Zweig: And so you don't have good plans and that we don't necessarily have the best tradespeople either here, because this is not an old city where you've got like third generation carpenters and the hummers and stuff.
5:35
Mark Zweig: You know what I mean.
5:36
Eric Howerton: Yeah, it's been passed through families.
5:37
Eric Howerton: Yeah, it grows up lard in it.
5:39
Eric Howerton: All the bells and whistles, they're just starting a business.
5:42
Mark Zweig: Yeah, exactly, and so I decided I'd make more money as an HVAC technician than I did working at the superior wheel plant, you know, and so they don't really know a lot some of them Right, and anyway it just takes this amount of time to supervise.
5:59
Mark Zweig: I mean, before, when we had our business, my carpenters told Sonia well, mark should come by three times a day.
6:06
Mark Zweig: I'm like, first off, I'm traveling.
6:08
Mark Zweig: I can't even go there every day.
6:10
Mark Zweig: Secondly, I was like three-quarter time at the U of A and I've got this other business that's doing five to $10 million a year in revenue.
6:20
Mark Zweig: I mean.
6:21
Mark Zweig: I just can't.
6:21
Mark Zweig: Yeah, there's only so much you can do you can't full-time project.
6:25
Eric Howerton: Manage your jobs.
6:26
Mark Zweig: Yeah.
6:27
Mark Zweig: So it just takes an unbelievable amount of supervision.
6:30
Mark Zweig: And I could just tell you story after story, and even the simplest things.
6:35
Mark Zweig: Like, we decided the shelf spacing in the pantry, okay.
6:41
Mark Zweig: And then you come back and the guy is putting a three-inch band on the front of each shelf.
6:46
Mark Zweig: No other shelf has a three-inch band, but a three-inch band, which?
6:50
Mark Zweig: What does that do to the shelf?
6:51
Mark Zweig: It reduces the capacity of the shelves, so nothing's going to fit in the shelves.
6:57
Mark Zweig: You'll have nine inches instead of 12 inches, right?
6:59
Mark Zweig: So your cereal boxes don't fit in there, you're right.
7:03
Mark Zweig: Okay, so you're going to have your pop and lucky charms and all that, and so you will.
7:09
Eric Howerton: Unless you go by and you're managing this like you're not going to see the mistakes, it's going to get too far down the road.
7:15
Eric Howerton: They're going to be painting it Now.
7:17
Eric Howerton: You got to get the painters back over.
7:18
Mark Zweig: I mean, it's just Exactly, and then they get pissed because they don't want to rip anything out.
7:23
Mark Zweig: Yeah, and it's just, it's horrible.
7:26
Mark Zweig: So be there all the time, which means all your other shit is being compromised In a way because you're not devoting the time to it that you really need to.
7:37
Mark Zweig: You know, I know you've got a bunch of construction projects and stuff.
7:41
Mark Zweig: Yeah, they have stuff going on.
7:43
Eric Howerton: Yeah.
7:43
Eric Howerton: I mean, it's been brutal, I'm sure and it's good just to hear this from me, though, because I mean somebody like you that's been doing it for so many years, like I feel like here's the problem and I think that this would be good for listeners is that if you do start these projects and you're just trying to get something done, like you might have a good idea hey, I'm going to own my own business building.
8:03
Eric Howerton: Yes, you know, great might make good sense, great wealth builder long term.
8:07
Mark Zweig: Yeah, absolutely yeah.
8:10
Eric Howerton: But you don't realize, like when you start getting into that, like just the amount of just questions, and then you have to go get permits pulled for this and right and something, and those final inspections from the fire marshal.
8:23
Mark Zweig: So who's holding you up?
8:24
Mark Zweig: Oh bro.
8:25
Eric Howerton: And then the city stamps the fire marshal stamp Right, and then they let you know you're finally in business.
8:30
Eric Howerton: And that's been kind of my experience lately about the new studio we're doing, yeah, like I mean three months past what I thought that we should have been in the building and that's costing a fortune.
8:41
Mark Zweig: Of course it is.
8:41
Mark Zweig: You're paying rent on the building all that time, and then your productivity is compromised.
8:46
Eric Howerton: And then you're losing business opportunities.
8:48
Eric Howerton: What's the biggest thing?
8:50
Eric Howerton: Sure Right, All the excitement starts dripping you know going down.
8:53
Eric Howerton: Yes, and I just felt like I was an incompetent person, because of that.
8:59
Mark Zweig: You know you're not incompetent.
9:01
Mark Zweig: They feel that way though.
9:02
Mark Zweig: Well, it's just.
9:03
Mark Zweig: The problem is that most of your contractors are incompetent when you come down to it, because they're not anticipating things.
9:11
Mark Zweig: They go there, they do what they're going to do that day and they're not looking ahead, going okay, I'm going to need this material, I better order it now.
9:19
Mark Zweig: And because I need it in three weeks and the last time I went there to get it they told me it would be three weeks.
9:25
Mark Zweig: Okay, they wait till the three weeks go by and they need it, and then they're like, oh, we don't have the material, it'll be three weeks.
9:31
Eric Howerton: Yeah.
9:32
Mark Zweig: I mean, it's just bad planning, not anticipating problems.
9:36
Mark Zweig: Same thing with the fire marshal Get all that scheduled, yeah, so you know in advance.
9:41
Mark Zweig: So who's responsible for that?
9:43
Mark Zweig: Like that's what I'm talking about.
9:44
Mark Zweig: Do you have a general contractor?
9:45
Mark Zweig: Like no, Okay, You're the general contractor, I guess.
9:50
Eric Howerton: I guess I would just think, but I mean, I think that that's the thing is right, Like, I mean, like, like who is like in my business, right?
9:59
Eric Howerton: And then in what I've been doing, we have project managers that are somebody is laying out the timeline.
10:04
Eric Howerton: It's like a freaking Gantt chart.
10:06
Eric Howerton: Yes, but I have yet to see a single Gantt chart from anybody in this industry.
10:11
Eric Howerton: Nobody wants to own that, do they?
10:13
Mark Zweig: Well, I mean, if you moved up the food chain to get commercial jobs, let's say you and I were going to go build a $10 million office building which, if we were doing anything, we should look at, because there you can actually get a good general contractor Well, first off you'll have better architects and engineers Okay, because it's a bigger job.
10:32
Mark Zweig: Then you get better contractors because it's a bigger job.
10:36
Mark Zweig: They have professional management Okay.
10:39
Mark Zweig: So you'll have a really good set of plans and specs, and then you'll have a project manager.
10:43
Mark Zweig: And then you know, if you pay your design professionals to do construction administration, then they are also looking out for your quality and so when you say design professionals is your architect, that's your engineer, architects and engineers.
10:55
Eric Howerton: Yeah, so you're a soft, what you call the soft part of the whole construction thing.
11:01
Mark Zweig: Yeah, which you know.
11:03
Mark Zweig: I was in that business for years, of course as an owner and some firms and everything.
11:07
Mark Zweig: But then when I'm a developer I hate to get paid out of time for soft cars.
11:15
Eric Howerton: That's the other part, right.
11:16
Mark Zweig: I'm sure you're the same, but if you don't have competent help there, then you end up paying for everything twice over anyway.
11:25
Eric Howerton: So in that situation, even in that situation like who's this general contractor?
11:29
Eric Howerton: Like if I Google right now general contractor Northwest Arkansas yeah, we got to find somebody that does office buildouts.
11:36
Mark Zweig: That's what you did there.
11:38
Mark Zweig: You're in an existing building, you're doing an office buildout and there will be firms that should pop up based on that.
11:45
Mark Zweig: General contractor.
11:48
Eric Howerton: Yep Office buildout Rogers, arkansas.
11:50
Eric Howerton: I'm going to do that.
11:51
Eric Howerton: Here's my results.
11:54
Eric Howerton: I'm a general contractor Cross-Land.
11:56
Mark Zweig: Mark's Construction Cross-Land?
11:57
Mark Zweig: Yeah, they could do it.
11:58
Mark Zweig: I don't know Mark's Construction, it's not me.
12:04
Eric Howerton: The Yelp.
12:04
Eric Howerton: Well, that Angie List.
12:07
Eric Howerton: No Clark contractors, and so the Mr Cleans home, no.
12:10
Eric Howerton: Is that like a general contract.
12:12
Mark Zweig: It sounds like they need some help with their Google.
12:18
Eric Howerton: The Google results yeah, Search engine optimization yeah, SEO needed that For GCs.
12:22
Eric Howerton: And I mean but like.
12:24
Eric Howerton: But is the GC like a cross, like when these is cross-lane a general contractor?
12:30
Eric Howerton: Yes, they're a general.
12:31
Mark Zweig: They would do the managers.
12:33
Eric Howerton: All kinds of other stuff.
12:34
Mark Zweig: Yeah, they would be the managers of your job.
12:36
Mark Zweig: They would and they would hire the subs and they would coordinate the job, gotcha.
12:42
Eric Howerton: So that's what I'm kind of figuring out is like a GC is actually baked in to the.
12:47
Eric Howerton: They want to own the entire project.
12:49
Eric Howerton: Yes, then they're the GC.
12:50
Eric Howerton: So they're subcontracting all the tradespeople, even the engineering and the architecture as well.
12:56
Mark Zweig: No, that's if you go design bill, then they would Generally that'd be like contractor led design build, where they hire the architects and engineers too.
13:03
Mark Zweig: Is that, is that a great deal?
13:04
Mark Zweig: Or you could have architect led design build where they hire the GC, it depends.
13:11
Mark Zweig: I mean, the problem is, you know, with design build, if you don't really know what the design details are, then it's up to them and they can cut corners.
13:22
Mark Zweig: That's the deficiency of design build.
13:25
Mark Zweig: It's like well, we thought you wanted this.
13:27
Mark Zweig: If you have it designed, you've got a set of plans and specifications the contractor has to build according to those.
13:33
Eric Howerton: So it's almost best.
13:34
Eric Howerton: Would you, if we had a raw piece of land and we wanted to build even just a house or even a course building?
13:41
Eric Howerton: Would it be best to go to architect day one?
13:46
Mark Zweig: Probably.
13:46
Mark Zweig: I mean, I'm not necessarily going to say for a house.
13:49
Mark Zweig: That depends on the quality of the house you're going to build.
13:51
Mark Zweig: You can't afford design professionals on a $250 a square foot subdivision house, probably Okay.
13:59
Mark Zweig: Why?
14:00
Mark Zweig: Because they're going to be too expensive and they're going to design it in such a way that it costs more than that to build.
14:07
Mark Zweig: Okay.
14:08
Mark Zweig: That's why you would probably just go get a builder quote, unquote which is basically a design build contractor.
14:16
Eric Howerton: So the builder that already has that's your spec.
14:18
Eric Howerton: They'd have a spec.
14:20
Mark Zweig: Right, they generally would have like a spec and a budget.
14:23
Mark Zweig: Yeah, like they go.
14:24
Mark Zweig: Okay, well, the kitchen on this house.
14:26
Mark Zweig: We're going to allot $35,000 for cabinets.
14:28
Mark Zweig: Okay, here's a preliminary design for the layout of it, not detailed, it's like a schematic design.
14:36
Eric Howerton: That's what drives me crazy.
14:37
Eric Howerton: There's no spreadsheet for anything Like as a as anybody that's going to build something.
14:43
Eric Howerton: You cannot get your hands on anything that's got detailed spreadsheets of costs.
14:48
Mark Zweig: Well, they're, yeah.
14:51
Mark Zweig: Well, the GC doesn't want to give you a breakdown.
14:53
Mark Zweig: That's part of the problem.
14:55
Eric Howerton: Yeah, I mean they really don't because they want mystery in there, because that's what their lifestyle is, right.
15:02
Eric Howerton: I mean, it's their business.
15:03
Mark Zweig: Right, and they want to have some latitude.
15:05
Mark Zweig: Okay, to move the money around.
15:07
Mark Zweig: They would rather give you a quote based on a price per square foot and then budget it, or a hard dollar bid to build your house.
15:16
Mark Zweig: But let's go back to the office for a minute, okay, because I do think an office building if you have a business whether it's a manufacturing business, or it's a business that needs warehouse space, or it's a business that needs office space or retail, depending on the business and what your growth trajectory is owning your own building or buildings can be a really great way for the small business owner to build wealth over time.
15:51
Mark Zweig: Yeah, okay.
15:52
Mark Zweig: So instead of paying, let's say you've got a business that needs 30,000 square feet of office space.
15:58
Mark Zweig: Yeah, you can go out there right now.
16:00
Mark Zweig: In the market that we're in, you'd pay $25 to $30 a square foot for that for good space per year.
16:06
Mark Zweig: So if it was 30,000 square feet and you're paying $25, that would be $75,750,000, is that right?
16:17
Mark Zweig: Yeah, 30,000 square feet.
16:19
Mark Zweig: You'd be paying $750,000 a year for rent.
16:26
Mark Zweig: All right, okay.
16:29
Mark Zweig: So that's a lot of money, right, mm-hmm?
16:31
Mark Zweig: And you get nothing at the end, right?
16:34
Mark Zweig: You're giving somebody else?
16:36
Mark Zweig: Yeah, you're just giving it to them.
16:37
Mark Zweig: Just make sure I did my math right on that 30,000 times 25 is yeah.
16:43
Mark Zweig: Is that 75,000?
16:46
Mark Zweig: No, that's 750,000.
16:51
Eric Howerton: Did you say 35,000?
16:54
Mark Zweig: 30,000.
16:54
Eric Howerton: 30,000.
16:55
Eric Howerton: Times 25.
16:56
Eric Howerton: 750,000.
17:00
Eric Howerton: Right.
17:01
Mark Zweig: So $750,000 a year you're paying out.
17:04
Mark Zweig: You get nothing to show for it, right?
17:06
Mark Zweig: So let's say you decided we're gonna take a clean sheet of paper out, we're gonna go build ourselves a 30,000 square foot building, or better yet we're still growing.
17:17
Mark Zweig: We don't wanna build what we need right now.
17:19
Mark Zweig: Right now we need 30,000, but we might need 50,000 in five years.
17:23
Mark Zweig: So we're gonna go build a 50,000 square foot building.
17:27
Mark Zweig: We'll plan on occupying 30,000 of it or 35 by the time we get it done and move in, and we'll rent out the 15 or 20,000, all right.
17:37
Mark Zweig: So that's your basic problem, all right.
17:42
Mark Zweig: So let's say you go out and find a piece of land you can buy for $2 million, okay.
17:49
Mark Zweig: And then you design a 50,000,.
17:52
Mark Zweig: You have your architects design a 50,000 square foot office building.
17:58
Mark Zweig: You find architects who specialize in new office construction.
18:04
Mark Zweig: It's a specialty.
18:05
Mark Zweig: It's like any other professional service provider and a lot of small businesses don't understand this, right, but I know you've experienced it.
18:14
Mark Zweig: You wanna go to tourney for M&A?
18:17
Mark Zweig: You hire somebody that only does that.
18:19
Mark Zweig: You want somebody for real estate.
18:21
Mark Zweig: You get an attorney who only does real estate.
18:24
Mark Zweig: Same thing with architects and engineers, okay.
18:27
Mark Zweig: Okay, I mean sure, some of the biggest companies do pretty much everything, but they'll have a whole group that is dedicated to new office construction.
18:37
Mark Zweig: All right.
18:38
Mark Zweig: So we find those architects and engineers.
18:40
Mark Zweig: We give them our basic program on what we want.
18:44
Mark Zweig: We want 50,000 square feet.
18:45
Mark Zweig: We wanna occupy 30,000 of it initially and 20,000 of it's gonna be rented space.
18:51
Mark Zweig: That impacts the design.
18:53
Mark Zweig: Obviously, right, let's say we don't want more than two floors, cause we know if we go too many floors each one develops its own personality.
19:04
Mark Zweig: Yeah, All right.
19:05
Mark Zweig: So we're gonna do 50,000 square feet.
19:07
Mark Zweig: We're gonna get 25,000 of our feet on the first floor and 5,000 the second floor.
19:13
Mark Zweig: The rest of the second floor will be lease space.
19:15
Mark Zweig: Or we do it the opposite way, right, mm-hmm.
19:18
Mark Zweig: So we get with our architects and engineers and they, well, we take first, we've got our site we pay $2 million for.
19:29
Mark Zweig: We've consulted them along the way.
19:31
Mark Zweig: So they say, yeah, we think this site would be good for a 30,000, 50,000 square foot building.
19:37
Mark Zweig: All right.
19:38
Mark Zweig: So it's not like we just bought the land before we consulted them.
19:41
Mark Zweig: That's step number one.
19:43
Mark Zweig: Yeah, I mean the zoning's gotta be right.
19:45
Mark Zweig: It's gotta be have a buildable area that's sufficient for this building, because so can we hang out there for a second?
19:52
Eric Howerton: Yeah, because that's really who do you consult with that, like I mean, so you need to engage, you really need to engage your architect and your engineer, right, you can find your team, yes, and, to your point, that's specialized in this type of stuff.
20:08
Mark Zweig: Yes, like the engineer would be somebody that just does like new commercial development projects.
20:13
Eric Howerton: Yeah, so you go find them and you meet with them, yep, and tell them all your ideas and stuff and they're gonna charge you a retainer.
20:21
Mark Zweig: It depends.
20:21
Mark Zweig: They might charge you by the hour initially, or maybe they're willing to, you know, roll that all into their fee.
20:28
Mark Zweig: Just to give you some quick advice.
20:30
Mark Zweig: If they're gonna do any real work, they're gonna charge you.
20:33
Eric Howerton: Yeah, and so, okay, you get together that basic plan and then you need to go find you a real estate agent that goes and looks for the property that you're.
20:40
Mark Zweig: That you're wanting.
20:41
Mark Zweig: Oh well, I was assuming in this case we already found some property.
20:44
Mark Zweig: We thought, yeah, if we're talking about buying the property in the first place, yeah, absolutely.
20:49
Mark Zweig: We get a good commercial real estate agent to find us a site that would support a 50,000 square foot building.
20:55
Eric Howerton: Yeah, because reason I was asking that is because there's zoning restrictions or all that kind of stuff, and if you're just somebody that's wanting to do this like you don't know all this stuff Right.
21:05
Mark Zweig: The architects and engineers do know that, though.
21:07
Eric Howerton: But then you gotta find somebody that's gonna actually go look for the property, because otherwise you're gonna be spending all your time looking for property.
21:13
Mark Zweig: Right, I was assuming in this example that we had a piece of property that we thought we wanted.
21:18
Mark Zweig: Yeah, yeah, yeah.
21:19
Mark Zweig: But yeah, you're right, I mean the first place is a really good commercial real estate agent who understands your goal and what you're trying to do.
21:27
Mark Zweig: Before we actually commit, though, we're gonna get our AE team involved right To make sure it's feasible there.
21:34
Mark Zweig: They would do a feasibility study, basically, yeah, to determine whether or not we can put that building on that site with the adequate parking, meeting all the requirements of lot coverage ratio.
21:46
Mark Zweig: So all this stuff.
21:48
Eric Howerton: So I could go talk to the AE.
21:50
Eric Howerton: We partner up.
21:51
Eric Howerton: I tell them the vision I'm paying them per hour.
21:53
Eric Howerton: We develop up some preliminary vision Right.
21:56
Eric Howerton: Go to the real estate person.
21:58
Mark Zweig: No, no, I'm not gonna design the building before I have the site.
22:02
Mark Zweig: The first thing is the site.
22:05
Eric Howerton: But how are you gonna know what site you want if you don't know what you're gonna be building?
22:09
Mark Zweig: Well, I'm gonna have a general idea.
22:11
Mark Zweig: I see what you're saying.
22:13
Mark Zweig: Yeah, yeah, yeah.
22:13
Mark Zweig: But the last thing you wanna do is have a concept designed for a building and then look for a place to put it.
22:19
Mark Zweig: You go the other way around you get your site, okay, and then you start to work on the concept for the building.
22:25
Eric Howerton: So if you find your site, though, and then you start talking with your AE's and you're paying them, but then they find out that that's not gonna work, Then you're not gonna close on it and you're out the money.
22:34
Eric Howerton: But that's what agents?
22:36
Eric Howerton: That's the reason they're built on a more commission-based.
22:39
Eric Howerton: They get that right Like they're always the Well, the agents do they get that?
22:44
Mark Zweig: Do they always know what's feasible there?
22:46
Mark Zweig: No, but a good one's gonna have a really good idea.
22:50
Eric Howerton: Yeah.
22:51
Mark Zweig: Okay, but yeah, I'm glad you you pointed that out.
22:54
Mark Zweig: In the flaw, in what?
22:55
Mark Zweig: I'm saying Start with the site, finding the site and getting your AE team involved with a basic program for what you're trying to do.
23:05
Mark Zweig: 50,000 square foot building on two floors Okay, okay.
23:10
Eric Howerton: How do you know?
23:10
Eric Howerton: So okay, so I don't almost say like the first thing to do is to find you a good commercial agent.
23:16
Eric Howerton: If, like, in all honesty, if I'm starting from a blank slate and I got, so, I got myself and a few other folks that were wanting to put money in this.
23:25
Eric Howerton: You know, my business is going Right and I'm trying to find a new place for a studio and I just got this idea.
23:31
Eric Howerton: That's the most the motion I wanna go because I wanna build wealth and I don't wanna pay somebody else, right, and you know, to this concept of talking about, I would go kinda have that idea.
23:41
Eric Howerton: Go talk to find a good commercial agent.
23:43
Eric Howerton: Commercial agents like yeah, yeah, they seem to know that crap and then at the same time, when they start looking, I might go find my AE, right.
23:50
Eric Howerton: And then they have a bring a meeting together with all of them Exactly.
23:53
Eric Howerton: Okay, cool and then now your agents out looking and talking with some AE's.
23:57
Eric Howerton: So you kinda got your team Right, but you're gonna be paying your AE's a little bit, or a monthly or hourly payment, but not your agent.
24:05
Mark Zweig: Right.
24:05
Mark Zweig: I mean you can find AE's that actually do site selection, okay.
24:10
Mark Zweig: Okay, so they help.
24:11
Mark Zweig: They'll go out and find all the sites that meet the criteria for what you wanna do.
24:15
Mark Zweig: If you have good planners, okay.
24:18
Mark Zweig: Are the planners part of the?
24:20
Eric Howerton: AE's.
24:20
Eric Howerton: Yeah, they're part of the AE's.
24:21
Eric Howerton: Which ones do they belong to?
24:22
Eric Howerton: The architecture of the engineers.
24:24
Mark Zweig: They fit into both categories and landscape architects A lot of them are actually landscape architects.
24:31
Mark Zweig: That are the planners.
24:32
Mark Zweig: That are the planners.
24:32
Mark Zweig: Those are the highly paid landscape architects.
24:35
Mark Zweig: They don't do planting, they don't put shrubs around the building, they actually figure out what can be built somewhere.
24:43
Mark Zweig: Really, yeah, those are the planners.
24:45
Mark Zweig: Where are those planning at?
24:46
Mark Zweig: Well, I had some of those as clients.
24:48
Mark Zweig: They make a lot of money.
24:49
Mark Zweig: Are they at the engineers?
24:50
Mark Zweig: They were for developers.
24:51
Mark Zweig: Sometimes they're in engineering firms, sometimes they're out on their own, entirely.
24:55
Mark Zweig: Okay.
24:57
Mark Zweig: So, yeah, the good ones are entirely on their own.
25:01
Mark Zweig: They don't wanna work under the domain of engineers.
25:03
Mark Zweig: How would you search the top of them?
25:04
Mark Zweig: Landscape planner, you would say landscape architect, slash planners.
25:09
Mark Zweig: Again, you're probably gonna find a problem there, okay?
25:14
Eric Howerton: And see this is.
25:15
Eric Howerton: But this too, this whole conversation, is a problem.
25:19
Eric Howerton: Yeah, that which I think stumbles growth right, because you've got some folks that are doing I'm doing a podcast studio.
25:27
Mark Zweig: Right, it's not what you know.
25:28
Mark Zweig: It's not what I know.
25:29
Mark Zweig: You gotta business, but what?
25:31
Eric Howerton: I do know is in everything else on the planet.
25:34
Eric Howerton: If I'm looking for something, I go to the Googles.
25:37
Eric Howerton: I understand, oh, I'm hard to find.
25:39
Mark Zweig: Yeah.
25:40
Eric Howerton: And people are gonna be going to the AIS and the chat GPTs and saying and asking these questions you're rest nothing there.
25:49
Mark Zweig: It looks to me.
25:50
Mark Zweig: Well, ignorance is a huge part of the problem.
25:52
Mark Zweig: Are the AESide, and they don't do a good job educating people.
25:57
Mark Zweig: No, no, about how everything works.
25:59
Mark Zweig: But I mean, you have yet another option.
26:02
Mark Zweig: You could find a development consultant.
26:05
Mark Zweig: Okay, what are those people?
26:08
Mark Zweig: There's one in Fayetteville, for example.
26:12
Eric Howerton: That guy would help you with all this, I wanna show you what I got for landscape architects and planners Tree in scapes and limited Nope.
26:22
Mark Zweig: Not gonna be the right people.
26:24
Eric Howerton: Here we go in this PJ architects.
26:26
Mark Zweig: I don't know, zatar.
26:31
Mark Zweig: There are firms like CEI, which is predominantly engineers, but they would do that, okay, you'd locally, yeah, okay, okay, um, even, um, like Harris and French AFA they would do.
26:45
Mark Zweig: My son-in-law works over there as a development guy for site planning and he's a landscape architect.
26:52
Eric Howerton: So if a, if a small business person they'll walks in there and calls them, are they going to even entertain that Cause?
26:58
Eric Howerton: Most of these folks in our area we have an unenabled.
27:00
Eric Howerton: You got the Walmart JV right, it's like you're a one-off.
27:04
Mark Zweig: Yeah, I think there's an end here, bro, there is no you're right there is.
27:10
Mark Zweig: You got to find some smaller firms.
27:11
Mark Zweig: But anyway, let's get past that part, which is a big part of this.
27:16
Mark Zweig: It's going to come out right.
27:18
Mark Zweig: That's the other frustration.
27:19
Mark Zweig: Okay, so once we get our site and we get it under contract and we know that we can build what we want to build there, okay, then the architects and engineers are going to design that fully Right, and they're going to prepare a set of plans and specifications.
27:32
Mark Zweig: If we're paying them a full fee for this job, which let's say, that's six to 8% of construction cost just to throw a number out of estimated construction cost, and let's say estimated construction cost for our building is 10 million, okay, 50,000 square feet, 200 bucks a foot, $10 million budget, 6% is going to be $600,000, 8% to be 800.
28:01
Mark Zweig: Okay, that's a lot of soft costs, admittedly, yes, but a good set of plans and specifications now allows us to put the job out for competitive bid, which means we can then get general contractors.
28:18
Mark Zweig: Normally the AEs would do this for you.
28:19
Mark Zweig: They put the job out to bid to GCs who make a hard dollar bid on it.
28:26
Mark Zweig: All right, you know they're all bidding on the same thing.
28:29
Mark Zweig: Put the bid out to GCs.
28:31
Mark Zweig: Yeah, they would put the set of plans and specs out.
28:33
Mark Zweig: They'd advertise they're taking bids.
28:35
Mark Zweig: So the GC general bid, they're taking bids.
28:38
Eric Howerton: So the GC general contractor, but that's a different type of GC than.
28:44
Mark Zweig: That's a general contractor who specializes in doing office buildings.
28:48
Eric Howerton: Because that general contractor knows all the subs is a general Okay.
28:54
Eric Howerton: So that's the but.
28:55
Eric Howerton: They're going off the spec, they're going after off the AE plans Correct.
28:59
Mark Zweig: The plans and specifications are designed by the AEs, so they're all bidding on the same thing.
29:03
Mark Zweig: You know you're going to get the exact same product in theory from all of them.
29:09
Mark Zweig: Okay, okay, yeah.
29:10
Mark Zweig: Like it would say, like, use this doorknob and it's got the part number there.
29:15
Mark Zweig: They can't just suddenly go get a different doorknob without your authorization.
29:19
Mark Zweig: All right, I mean, it's down to that level of detail.
29:23
Mark Zweig: Okay, yeah, so they put it out for.
29:27
Mark Zweig: So your good plans and specifications allow you to hire a contractor and know what you're going to get in the end and hopefully then, because you can put it out for competitive bids, you're going to save some money.
29:41
Mark Zweig: You're going to recoup some of that six or eight hundred thousand you spent.
29:44
Eric Howerton: Because that's going to drive down the overall cost per square foot for that GC.
29:48
Eric Howerton: Yeah, but why?
29:50
Eric Howerton: How?
29:51
Eric Howerton: The AE's are not going to be incentivized by that dropping?
29:55
Mark Zweig: The AE's have no incentive to do anything.
29:59
Eric Howerton: If I was an architect or engineer, I'd be like this is going to be $250 a square foot.
30:04
Mark Zweig: Right.
30:05
Eric Howerton: And then I'm going to send it out to bid and they're going to be once collecting those bids.
30:08
Eric Howerton: Right, right, on my behalf as an emote owner, right, I would argue all day long to go with a guy that came back at $230 a square foot versus the one at 150, because this one at 150 is incompetent from my perspective.
30:22
Mark Zweig: Well, yeah, and you do that sometimes, a lot of times they'll throw out the low bid, automatically, the lowest bid, especially if there's a big gap.
30:30
Mark Zweig: Yeah, because you don't trust that.
30:32
Mark Zweig: Right, like the one guy comes in at the one company comes in at $8 million and the next one is $9,800,000.
30:40
Mark Zweig: You'd probably throw the $8 million out or figure out.
30:43
Mark Zweig: Certainly want to talk with them, yeah, make sure they understood what they were bidding on, but don't they just get a little hurt.
30:50
Eric Howerton: The fact that I mean, if you did go with a lower bid, like I mean.
30:54
Mark Zweig: Well, it depends why the AE is getting paid.
30:57
Mark Zweig: I mean, one way the AE gets paid is on a percentage of construction cost, right.
31:02
Mark Zweig: Other way is a fixed fee.
31:04
Mark Zweig: They say we're going to charge you $800,000 for this job Period.
31:09
Mark Zweig: The construction cost doesn't matter.
31:12
Mark Zweig: Yeah, you see what I mean.
31:13
Mark Zweig: Yeah, so that's, that's a fixed fee AE contract.
31:18
Mark Zweig: So that does happen like that.
31:22
Eric Howerton: Because I've just think about your typical behavior of anybody that's in business.
31:26
Eric Howerton: I would much rather have.
31:29
Eric Howerton: I mean, if the construction cost is higher, I gain from that Like it's better worth my time.
31:34
Mark Zweig: Well, there are some firms that work like that.
31:36
Mark Zweig: Mm-hmm One of the firms I work with, we call it the Bump.
31:39
Mark Zweig: At the end of the job, the actual construction cost was compared to the budget, the fee they've been billed the client based on the budget.
31:48
Mark Zweig: Okay, mm-hmm, the cost, but the actual cost?
31:53
Mark Zweig: Then they just gross it up by their percentage and send them a bill, all right.
31:58
Mark Zweig: So yeah, there are some firms that work like that.
32:00
Mark Zweig: All depends on the type of contract you have with the AE.
32:04
Eric Howerton: So all right, so we were at the general contract.
32:06
Eric Howerton: They send back the bid, but they're not sitting back any detail out of my bids, Like that's where I they may.
32:12
Mark Zweig: No, they may.
32:12
Mark Zweig: They may have, they're a wide item.
32:14
Mark Zweig: They may do it that way, yeah, but they may not.
32:20
Mark Zweig: They may just give you a hard dollar price $9.8 million to build this based on these plans and specs.
32:26
Mark Zweig: So they're detailed.
32:28
Mark Zweig: So what's the?
32:29
Mark Zweig: control being scope-create A lot crazy, a lot crazy, okay, well then, if you're going to change things along the way as the owner, then the GC is going to say change order, all right, and they're going to gig you for that In their contract.
32:45
Mark Zweig: If you make any deviation from the plans and specs, then they want to be able to charge you a change order.
32:53
Eric Howerton: What do you do about, let's say, they stuck.
32:56
Eric Howerton: So I'm thinking of this driveway.
32:58
Eric Howerton: I'm trying to freaking build this whole mystery of how much labor it's going to cost, because we don't know until we start digging if we're going to be hitting rocks and all this other kind of stuff, and so I can't get my hands around a true cost of this thing.
33:12
Eric Howerton: Well, no, you can't.
33:15
Mark Zweig: Nobody's going to hard dollar bit that I mean.
33:18
Mark Zweig: Having a really good set of plans from the engineer would be a good start, yeah.
33:24
Eric Howerton: I have that.
33:25
Mark Zweig: That's going to be a good start, but I think what you're finding is developing anything on a hillside is very expensive.
33:35
Mark Zweig: So if I was out building new houses, why do you think the subdivision developers love all these flat lots, those hillside lots I did behind Common Go?
33:46
Mark Zweig: Those were so expensive to build.
33:50
Mark Zweig: I mean we couldn't put a.
33:52
Mark Zweig: If you were going to build a $350,000 house, you'd have $200,000 in the foundation because of all the site engineering and requirements of the city.
34:02
Mark Zweig: The road controls yes, the drainage planned by a professional engineer.
34:06
Mark Zweig: The foundation is designed by a structural engineer.
34:09
Mark Zweig: Geo tech boardings in order to make sure the foundation engineer can decide it right.
34:15
Mark Zweig: Then all the work to make the foundation.
34:17
Eric Howerton: That was a brutal project for you, wasn't it?
34:19
Mark Zweig: Yep, I lost money on every house I did there.
34:22
Mark Zweig: But anyway, let's go back to our example.
34:25
Mark Zweig: We got bits on this building.
34:28
Mark Zweig: Now let's say they came in at $10 million.
34:31
Mark Zweig: We then build the damn building, all right.
34:36
Mark Zweig: So how are we going to pay for that?
34:39
Mark Zweig: Well, the first thing is we're going to get a construction loan based on our preliminary plans and specs and our construction cost estimate.
34:48
Mark Zweig: Let's say that we gave those plans and specs to our bank.
34:53
Mark Zweig: We haven't got a hard dollar bid on it yet.
34:55
Mark Zweig: We give them to our bank and our bank has an appraiser say okay, what would this thing be worth?
35:04
Mark Zweig: Okay, based on your lease that you're going to give yourself, let's say you decide we're going to pay ourselves 30 bucks a foot.
35:12
Mark Zweig: This is really going to be great space, all right.
35:15
Mark Zweig: So we're paying ourselves $90,000 or, excuse me, $900,000 a year in rent, okay.
35:21
Mark Zweig: And we're going to rent the other 20,000 square feet for 30 bucks a foot, okay.
35:29
Mark Zweig: So we're going to pick up another.
35:31
Mark Zweig: Let's see 600,000.
35:36
Mark Zweig: So our total rent income is going to be $1.5 million for this, all right.
35:41
Mark Zweig: So now that goes to the appraiser, the commercial appraiser that your bank assigns to this deal.
35:51
Mark Zweig: Okay, okay.
35:52
Mark Zweig: And so what's going to happen is now we have total income of $1.5 million, right?
36:03
Mark Zweig: So let's say this is not a triple net lease.
36:05
Mark Zweig: Let's say, for the 30 bucks a foot, we're covering all the maintenance utilities and common area property insurance, snow plowing, whatever.
36:15
Mark Zweig: All right, it's all rolled into the 30 bucks.
36:18
Mark Zweig: Just to keep this simple, okay, so we're bringing in $1.5 million a year in rent.
36:24
Mark Zweig: Okay, the bank is going to say, okay, the appraiser, let's just say we're going to give these guys 85% of that because they're going to have as loan, no, just as income.
36:37
Mark Zweig: Okay, we're going to allow this as income.
36:39
Mark Zweig: Got it, got it.
36:39
Mark Zweig: Got it 1.5 times 0.85.
36:43
Mark Zweig: They got to pay property taxes, insurance, lawn care, painting, utilities on the common areas, lights in the parking lot and yada, yada, yada.
36:54
Mark Zweig: Right, they come up with 1.275 million a year net.
36:58
Mark Zweig: That's what you're going to net after your costs.
37:01
Mark Zweig: All right.
37:03
Mark Zweig: Then how do they come up with a value?
37:05
Mark Zweig: Well, they say this will be a Class A office building in Northwest Arkansas, in a good town, rogers, arkansas.
37:15
Mark Zweig: All right, now, it's not the same as saying Siloam Springs Okay, that's 20 miles away.
37:23
Mark Zweig: It doesn't have the same economic situation we have here.
37:29
Mark Zweig: All right, it's smaller.
37:34
Mark Zweig: It's going to be riskier to build the building over there that we'd find somebody who wants a 50,000 square foot building in Siloam than Rogers, where there's all these businesses flooding to the area.
37:44
Mark Zweig: That impacts what's called the well.
37:50
Mark Zweig: That impacts the cap rate, the capitalization rate.
37:59
Mark Zweig: So if it was in Rogers today, a Class A building it's a solid market, right Growing.
38:07
Mark Zweig: Let's just say that you would have that the appraiser would allow a 6% cap rate.
38:13
Mark Zweig: I'll explain this in a minute.
38:15
Mark Zweig: Let's say, if you were doing it in Siloam, though, they would say, no, that's an 8% cap rate.
38:21
Mark Zweig: Okay, because I'm going to show you the difference in value.
38:23
Mark Zweig: So 1.275 at a 6% cap rate, 1.275 million a year in income, after all expenses and allowing for some vacancy from time to time.
38:37
Mark Zweig: Right, 85% of our million five.
38:40
Mark Zweig: Okay, that divided by 0.06.
38:43
Mark Zweig: That gives us a number of 21,250,000.
38:50
Mark Zweig: Okay, okay.
38:54
Mark Zweig: Now if it was in Siloam Springs and I'm doing my 1.275,000, and I don't know that this is what it is for Siloam, but I say, give a guess that divided by 0.08, I get a number of 15,937,000.
39:12
Mark Zweig: You see how that impacted it.
39:13
Mark Zweig: Yeah, $6 million in different value, okay, okay.
39:17
Mark Zweig: Now we know the land's going to cost more in Rogers, though that's a big chart of it.
39:22
Mark Zweig: Right, yeah, so we're going to put this $10 million building and let's just say, for the sake of our example, it's going to cost us $6 million for the site.
39:30
Mark Zweig: Okay, all right.
39:32
Mark Zweig: So we're going to have $16 million in this deal.
39:35
Mark Zweig: Right, to build it, by the way, and everything Right, all right.
39:39
Mark Zweig: Oh, and add the 800,000 for architects and engineers in there.
39:44
Mark Zweig: We're going to have 1,.
39:45
Mark Zweig: We're going to have 16,800,000 in it.
39:49
Mark Zweig: Okay, okay, is that right?
39:52
Mark Zweig: Yeah, yeah, but 1.275,000 O divided by 0.06, that gives us a 21,250 valuation.
40:04
Mark Zweig: 21 million, 250,000 valuation.
40:07
Mark Zweig: Take that minus 16,800.
40:12
Mark Zweig: 16 million, 16 million, I'm sorry, thank you, yeah, you're welcome.
40:17
Mark Zweig: 16,800.
40:18
Mark Zweig: Now we get 4,450,000 left over.
40:22
Mark Zweig: Okay, okay, so it's going to appraise at 4,450,000 more than it's going to cost us.
40:31
Mark Zweig: Okay, this is how developers make money.
40:33
Mark Zweig: Okay, all right.
40:34
Mark Zweig: What can we borrow on that?
40:36
Mark Zweig: Well, they gave us an appraisal of what.
40:39
Mark Zweig: What did I say?
40:39
Mark Zweig: 1.275?
40:41
Mark Zweig: What she's made?
40:45
Mark Zweig: 1,275,000,000, 275,000 divided by 0.06.
40:52
Mark Zweig: They're giving us $21,250 valuation.
40:56
Mark Zweig: The bank will lend us 80% of that.
40:58
Mark Zweig: 21,000?
41:00
Mark Zweig: , 21 million?
41:01
Mark Zweig: Okay, excuse me, 21 million, 250,000.
41:04
Mark Zweig: The bank will lend us 80% of that.
41:05
Mark Zweig: On a construction loan Okay, we use the construction loan to first buy the land, then to hire the architects and engineers, then build the building Okay, 21,250,.
41:15
Mark Zweig: But they'll only give us 80% of that.
41:18
Mark Zweig: Yeah, okay.
41:20
Mark Zweig: So that's $17 million is what they'll loan us for our estimated cost of 21,250, for the appraisal excuse me, not cost appraised value of the building post construction.
41:34
Eric Howerton: Okay, so would you have to come out any money against that then?
41:39
Mark Zweig: If I could build this for $16,800,000, I would have $0 in it, other than the interest carry along the way on the construction loan, which would be an interest only loan.
41:53
Mark Zweig: So for a period of maybe two years I'm paying first interest on the lot, then I'm paying interest on the construction as we draw on the line of credit.
42:04
Mark Zweig: Okay.
42:06
Eric Howerton: So, as an investor, if I was trying to, if I was trying to build this, I'd get you myself, a couple other folks and we're going to.
42:15
Eric Howerton: Basically our plan is to pay this interest and we're all committed to that.
42:20
Mark Zweig: If yeah, if we have to.
42:23
Mark Zweig: Obviously we have to, though right, because they're going to start charging the interest on it.
42:27
Mark Zweig: We're going to get 200, if we did it for 16,000, we got 200,000 left over.
42:31
Mark Zweig: It's going to help us pay our interest along the way for part of it Not a lot.
42:37
Eric Howerton: So you'd have money in the bank to pay the interest.
42:39
Mark Zweig: We'd have some money.
42:40
Mark Zweig: But yeah, ideally I mean most likely we're going to be coughing up the interest along the way.
42:46
Mark Zweig: Yeah, okay, are you following this?
42:49
Eric Howerton: example yeah, yeah, yeah.
42:50
Mark Zweig: Okay.
42:51
Mark Zweig: So when it gets done, we move in, we lease up the other 20,000 square feet.
42:58
Mark Zweig: We then convert our construction loan that was $17 million into permanent financing.
43:05
Mark Zweig: Mm-hmm, the appraiser who did the original pre-construction appraisal, the subject to improvement appraisal yeah, we'll come out there and look at it.
43:16
Mark Zweig: Go to these guys, do what they said they would.
43:18
Mark Zweig: Yeah, did they get the rents that they said they would?
43:20
Mark Zweig: Well, we know they did, because we're in control of our own lease.
43:24
Mark Zweig: Right, we leased it from ourselves, right, even if it's a separate entity, right?
43:29
Eric Howerton: Yeah.
43:31
Mark Zweig: Okay, so they go.
43:32
Mark Zweig: Yeah, they did all that.
43:34
Mark Zweig: Okay, fine.
43:35
Mark Zweig: So now we turn the $17 million construction loan into an amortizing 25-year commercial mortgage.
43:44
Eric Howerton: Which is going to lower the well you're going to be paying the principal.
43:48
Eric Howerton: Okay, go ahead.
43:50
Mark Zweig: Yeah, let's say that that's $17 million and let's say today, today's interest rates, maybe we can get that for seven and a half.
43:58
Mark Zweig: You'd be a really strong credit to get that.
44:01
Mark Zweig: But let's say you could get that for seven and a half million dollars, or 7.5%, rather interest.
44:09
Mark Zweig: Okay, now I'm going to see what I can get here, if I can find us a loan calculator, and I'll tell you what the payments would be A loan calculator we know we're bringing in 1.5 million a year in rent, less than 225.
44:26
Mark Zweig: So we're bringing in a net of a million 275, right, mm-hmm?
44:30
Mark Zweig: So let's take a look at our loan here.
44:33
Mark Zweig: So we've got a loan for $17 million and let's say we got it on a 25-year term.
44:43
Eric Howerton: Okay, which would be high for commercial?
44:46
Mark Zweig: though, wouldn't it?
44:46
Mark Zweig: No, you can get commercial for 25 years.
44:48
Mark Zweig: Most of mine, I had 25 years, sometimes 20, but mostly 25.
44:54
Mark Zweig: All right, and our interest rate is 7.5.
44:58
Mark Zweig: We're strong, the bank likes us, they're going to give us a deal, right?
45:03
Mark Zweig: My point is so we're going to have a payment, though, okay, and hopefully that payment is not greater than our lease rate after all of our expenses.
45:17
Mark Zweig: Now, at these high interest rates that we have today, it is a little harder than it was a few years ago, where you could get everything for 3.5%.
45:30
Mark Zweig: Yeah, okay, Are you understanding how people do this?
45:35
Mark Zweig: Yeah, yeah, this is how it's done.
45:37
Mark Zweig: You know everybody's like well, I don't have the 20%, you don't need the 20%, you just need the credit.
45:44
Eric Howerton: Exactly, you need the credit, you need some collateral or the bank is using the land and the property and all that value.
45:51
Mark Zweig: Yeah, that's the collateral.
45:53
Mark Zweig: That's the collateral.
45:55
Eric Howerton: But you can't just walk it Like you'd have to have some sort of esteem to the bank in order to do this, though right, I mean you Sure, right, I mean like you can't.
46:05
Eric Howerton: Just, I guess you have to build slowly and have a relationship with the bank to kind of build yourself up, to have that credibility.
46:16
Mark Zweig: Yes, to get into that.
46:17
Mark Zweig: Yes, I always had really good credit.
46:20
Mark Zweig: So even if I didn't have any cash, I always said this is really good credit.
46:24
Mark Zweig: Yeah, I could get.
46:25
Mark Zweig: I could go borrow $20 million, okay or more on a piece of property yeah, on real estate yeah, because I.
46:38
Mark Zweig: But, as you said, I did build that up over time and the banks had faith in me because I'd done this a lot.
46:45
Mark Zweig: You see, okay, now, I'm getting close now and you'll interest rates in 0.5 amortization term 25 and calculate Okay, so this comes out with payments of 125,628.
47:10
Mark Zweig: All right, a month per month.
47:13
Mark Zweig: Per month.
47:15
Eric Howerton: That includes principal and interest.
47:16
Mark Zweig: Yeah, that includes principal and it.
47:17
Mark Zweig: So basically, if we had it fully leased out and we weren't paying any maintenance expenses, I don't know we would make the.
47:28
Mark Zweig: We would be bringing in the rent that would cover the principal and interest and we'd be paying the maintenance out of our pocket.
47:38
Mark Zweig: So maybe we need to charge ourselves a little more rent.
47:41
Mark Zweig: Okay, maybe we make ourselves pay the TII or whatever whatever they call it.
47:51
Mark Zweig: That includes a factor for the insurance, property taxes, maintenance and everything else.
48:01
Eric Howerton: Maybe that's another percentage on top of our rent, like move to the triple net scenario, right, so it's on top of this, right the cover it.
48:13
Mark Zweig: So if we did that, then we would be able to pay for the whole deal and kind of have a little cash flow on it.
48:22
Eric Howerton: So you're making some income.
48:23
Mark Zweig: Right, we wouldn't really be making money, though, we'd just be covering our note.
48:28
Eric Howerton: And the reason you wanna do that is that eventually you're well, here's how this benefits us.
48:37
Mark Zweig: Let's say that you and I were the primary owners of the business that's gonna use this space, okay, right.
48:44
Mark Zweig: And you and I are the owners of the building corporation, right?
48:48
Mark Zweig: So we've got this $22,500,000 building that we can depreciate over, let's say, 27 and a half years or whatever the allotted schedule is.
48:59
Mark Zweig: I don't remember, I'm not a CPA.
49:01
Mark Zweig: Let's just say, for the sake of example, it's 27 and a half years.
49:04
Mark Zweig: That means that we are gonna shelter about $900,000 of our income annually.
49:12
Mark Zweig: So you own half the building, I own half the building.
49:16
Mark Zweig: You get a statement that says 450,000.
49:19
Mark Zweig: I get one that says 450,000 loss.
49:25
Mark Zweig: Let's say we each made a million dollars in our business for that year.
49:29
Mark Zweig: 450,000 of our income just goes away.
49:33
Mark Zweig: Yeah, you don't pay taxes, pay zero tax on it.
49:36
Mark Zweig: Meanwhile, this building is growing in value, depreciating.
49:42
Mark Zweig: So it's depreciating for tax purposes, but it's appreciating.
49:47
Mark Zweig: So let's say we're there for 25 years.
49:50
Mark Zweig: Even if we sell our business, we rent it out to the new owners, or maybe the firm we had eventually moves out.
49:56
Mark Zweig: We rent the whole thing out to different people.
49:58
Mark Zweig: Over time we escalate our rents.
50:01
Mark Zweig: Over time our value goes up based on those higher rents 25 years later.
50:08
Mark Zweig: Let's just say, for the sake of example now instead of a $22 million building, we've got a $66 million building and it's paid off.
50:18
Eric Howerton: Okay, now you're cash flowing plus, you have that.
50:22
Mark Zweig: Huge asset.
50:23
Mark Zweig: Huge asset.
50:24
Mark Zweig: That's how you get rich over time as a small business by owning the real estate.
50:31
Mark Zweig: It's a tax strategy.
50:33
Mark Zweig: It's also a wealth building strategy.
50:35
Mark Zweig: Okay, yeah.
50:37
Mark Zweig: The problem is, when you go to sell the building, you've got a huge gain, obviously Okay.
50:43
Mark Zweig: Then you got a huge tax burden.
50:44
Mark Zweig: So that's why a lot of people let's say, at the end of 25 years we got this building, it's paid off you and I both say we don't want this thing anymore.
50:53
Mark Zweig: We sell it for the 66 million or whatever we get out of it, and we then take our money and we roll it into other things that are real estate related to save our tax, that's your tax.
51:06
Mark Zweig: 31 exchange.
51:08
Mark Zweig: That's your 1031 exchange.
51:09
Mark Zweig: We don't want to show that gain, but we think apartments are great now.
51:13
Mark Zweig: So we're going to go buy 200 apartments in South Florida and have a property manager, or we're going to put our money into a read or some kind of a fund that allows us to claim a 1031 on it.
51:25
Mark Zweig: To a read, did you say read Real estate investment trust Got it.
51:29
Mark Zweig: Then we just have a portion of a bunch of properties out there Okay, that somebody's managing as a portfolio.
51:37
Eric Howerton: Maybe that can invest in other real estate Like you, basically become a minority shareholder in a bunch of other real estate.
51:42
Mark Zweig: Exactly.
51:43
Mark Zweig: There are ways, I believe and again, I'm not a CPA but to get your 1031 money by doing that, mm-hmm Okay.
51:53
Eric Howerton: Yeah, because I think that part of this too, I mean like we can start talking about getting into estate planning, right, I mean like we may not want, like I mean if we pass away and our family gets that through the trust or whatever, like they may want to be cashing out, yeah, but if you did cash out on that, you would get hit with a capital gains tax of Significant, which is 25, what 25% right?
52:15
Mark Zweig: 26?
52:16
Mark Zweig: I don't know.
52:17
Mark Zweig: It changes every year.
52:18
Mark Zweig: There's some kind of a scale, but I don't know what it is right now 20, 25%, somewhere in that domain.
52:26
Mark Zweig: Yeah, I mean this building we just sold.
52:28
Mark Zweig: We're gonna get hit with 440,000 tax bill.
52:33
Mark Zweig: It's selling for 3.5, but it's depreciated value is 1.8.
52:38
Mark Zweig: So you take a million seven.
52:41
Mark Zweig: I guess it must be over 20%, Mm-hmm.
52:44
Mark Zweig: Okay.
52:47
Eric Howerton: But in the midst of all this, I think the point of the conversation is this sounds great, right, yeah, but you have to be the one that freaking manages this whole process Like you are the one that's Driving it.
53:01
Eric Howerton: That's driving it.
53:02
Eric Howerton: I mean, and you gotta be all up in the middle of that business.
53:05
Mark Zweig: Right, and the downside of it is so, yeah, but again, if you're doing a project of this scale, you should be able to get decent architects and engineers and good general contractor that knows what they're doing.
53:17
Mark Zweig: It's not like adding on your house.
53:19
Mark Zweig: Yeah, right, where you got these guys?
53:21
Mark Zweig: I got a pickup truck and I got a license.
53:24
Mark Zweig: I'm a licensed remodeler.
53:25
Mark Zweig: Lets me do projects up to 20,000, but I'm gonna build your house.
53:29
Mark Zweig: It doesn't matter.
53:30
Mark Zweig: Okay, that's not.
53:32
Eric Howerton: So, but I mean On the big commercial side.
53:34
Eric Howerton: I mean I think there are.
53:36
Eric Howerton: It seems like what you're telling us is that from an industry, broader industry perspective, yeah, the pros are hanging out on the commercial side.
53:44
Mark Zweig: Exactly.
53:46
Eric Howerton: On the residential side.
53:47
Eric Howerton: So now we're talking about something different.
53:49
Eric Howerton: But there's a lot of folks that wanna get into residential or I mean even personal type stuff, or they're wanting to get into residential investing Right.
53:59
Eric Howerton: That seems like that.
54:00
Eric Howerton: That is the Wild West.
54:01
Eric Howerton: No one has a freaking spreadsheet.
54:03
Eric Howerton: No one's really GC in that at all.
54:07
Mark Zweig: If I'm wanting to remodel my house or if I wanna buy If they are, the cost is so high that it's hard for you to make money on it.
54:14
Mark Zweig: I mean, there are people who just hired GCs to do everything.
54:18
Mark Zweig: Yeah, but then that's gonna graduate your cost per square foot yeah, it's gonna kill your, you're probably gonna lose some money, you know, because it's gonna cost you more, because the GCs getting paid roughly 15 to 20% of the project cost On top of what they're paying On top of what they're paying.
54:38
Mark Zweig: Right.
54:38
Mark Zweig: So, like some residential builders were cost plus the way we did it.
54:42
Mark Zweig: Only way we did it was cost plus.
54:44
Mark Zweig: We never gave a hard dollar bid, so we would give you the invoice from the sub and mark it up by 20% and that was our fee.
54:52
Mark Zweig: So if it's a $500,000 job, we're getting paid $600,000.
54:56
Mark Zweig: We make $100,000.
54:58
Mark Zweig: Yeah, Okay, but that's gradually, I mean for the older, the more we spend, the more we get.
55:06
Eric Howerton: And everybody's incentivized to spend more money.
55:08
Mark Zweig: They are, but that, unless they, all are yeah, so that would.
55:12
Eric Howerton: that would cause me to go.
55:13
Eric Howerton: I'm not gonna like then I'm not gonna get the general contractor.
55:17
Mark Zweig: I'll be the general contractor.
55:18
Mark Zweig: I'll be general contractor Biggo.
55:19
Mark Zweig: Now we're back to your driveway.
55:23
Eric Howerton: But then you're.
55:23
Eric Howerton: But I think that what I'm struggling You're half a million dollar driveway Love.
55:27
Eric Howerton: What I'm struggling with, what I'm struggling with is, like I'm just so used to in business, somebody having a pro forma, some sort of spreadsheet that's automizing the cost and I can see what I'm paying for.
55:42
Mark Zweig: I always did an estimate for clients.
55:44
Mark Zweig: If I was doing it on a cost plus, it would have a breakdown in it.
55:49
Eric Howerton: Okay, but it's an estimate, but you, you're not gonna.
55:51
Eric Howerton: But you're not gonna engage in that estimate unless you got the job right.
55:54
Eric Howerton: You're not gonna go spend your time as a GC.
55:56
Eric Howerton: Well, I got paid for that we got.
55:59
Mark Zweig: We charged for design and cost estimating, Then we charged 20% on top of the construction.
56:05
Eric Howerton: We were designed so there are people that might be out there that you could pay just to have this like a pro forma Correct Done about the project.
56:13
Mark Zweig: Yes, there are yeah, we charged for that.
56:15
Mark Zweig: What did you charge?
56:17
Mark Zweig: It just depended.
56:18
Mark Zweig: It was a flat fee based on the complexity of the job.
56:21
Mark Zweig: I hated doing cost estimates, therefore they're gonna pay Okay.
56:27
Mark Zweig: We had in house architecture.
56:28
Mark Zweig: We were really a design build firm.
56:31
Eric Howerton: Okay, but how sophisticated is that estimation, though?
56:35
Eric Howerton: I mean like cause, I'm just thinking like again, like here's where my guy have understated.
56:40
Eric Howerton: Okay, that's where my, that's where my frustration lies.
56:44
Eric Howerton: It's like I can't get.
56:45
Eric Howerton: I can't seem to find any truth or accuracy in any of this.
56:50
Mark Zweig: Here's the reason why you can't because we don't know with certainty.
56:54
Mark Zweig: When we call Jose to give us a bid on your driveway, we think we know what you want for your driveway.
57:01
Mark Zweig: We don't have great plans on your residential job.
57:03
Mark Zweig: Typically, we don't know what we're gonna encounter out there.
57:07
Mark Zweig: We don't even know what the price of concrete is today, cause it's changing all the time.
57:11
Mark Zweig: Okay, we don't even know if Jose is gonna be able to get concrete.
57:15
Mark Zweig: Isn't that a freaking software for this stuff, man?
57:18
Mark Zweig: I'm sure there are people that do it.
57:21
Mark Zweig: I constantly get emails from people in India and stuff.
57:25
Mark Zweig: I wanna do my cost estimating, but I don't trust them.
57:28
Mark Zweig: Okay, and I know it's gonna be garbage, yeah, so you just have to.
57:33
Mark Zweig: A lot of it is just based on a really good experience.
57:37
Mark Zweig: Gc slash home builder is gonna have a pretty good idea of what things cost, based on certain rules of thumb.
57:45
Eric Howerton: Yeah, which then therefore puts the knowledge back in this person's head and where you have to have, as an owner and investor, you have to have a level of trust you do With that individual person Right, and that's to not freaking.
57:58
Eric Howerton: Take you to the bank or have an absolutely devastating project.
58:03
Mark Zweig: Here's the truth.
58:04
Mark Zweig: Now you do have to have trust and like you know.
58:06
Mark Zweig: So let's say, I was doing a job, I'm building a new house for you, I'm charging you 20%.
58:11
Mark Zweig: Okay, yeah, they go.
58:13
Mark Zweig: Geez, that's a lot of money, mark whatever, okay.
58:15
Mark Zweig: But then you do some research and find out that A the people that have our stuff like it, it holds up.
58:23
Mark Zweig: B if there's a problem, we're fixing it.
58:26
Mark Zweig: Mm-hmm.
58:27
Mark Zweig: C.
58:28
Mark Zweig: We're generally pretty good on our cost estimating.
58:30
Mark Zweig: Okay, this is you'd find that out by talking with people right that it used us and indeed the turn time D.
58:39
Eric Howerton: we're gonna get it done.
58:40
Eric Howerton: The turn time is what we say It'll be me and all this stuff.
58:44
Eric Howerton: Yeah, because the Because every month is more money, right, I mean like that's for me like a lot of the stuff, like just Like it gets brutal man.
58:54
Mark Zweig: In the old days we used to say price, schedule, quality, pick any two, yeah.
59:00
Mark Zweig: In other words, I can give you a good price and I could maybe hit your schedule, but the quality is gonna suck.
59:05
Mark Zweig: Or I could give you quality and schedule, but your price is gonna be high.
59:09
Mark Zweig: You see what I mean?
59:10
Mark Zweig: Yeah, man, but yes, you're absolutely right.
59:12
Mark Zweig: So you gotta have a relationship of trust.
59:15
Mark Zweig: But here's the thing I used to tell clients and this is not bullshit, it's true.
59:21
Mark Zweig: So let's say, I'm charging you 20% to do what I'm doing.
59:23
Mark Zweig: You're actually not paying 20%.
59:27
Mark Zweig: You know why?
59:27
Mark Zweig: Why?
59:28
Mark Zweig: Because I'm gonna get that plumber cheaper than you are.
59:31
Mark Zweig: Because he works for me every day.
59:33
Mark Zweig: He's gonna give me a lower price than you.
59:37
Mark Zweig: He knows I'm gonna have my site prepped, it's gonna be clean, I'm gonna take care of them.
59:43
Mark Zweig: But you're not gonna pad that though.
59:45
Mark Zweig: No, I'm not padding.
59:47
Mark Zweig: And whatever the cost of the plumber, you're gonna pay 20%.
59:50
Mark Zweig: I'm gonna give you the backup.
59:51
Mark Zweig: Okay, so I'm gonna get my painter cheaper than you are, because my painter doesn't know how to market.
1:00:01
Mark Zweig: He doesn't want.
1:00:02
Mark Zweig: He knows I pay his bills.
1:00:04
Mark Zweig: He doesn't wanna work for other builders.
1:00:07
Eric Howerton: So he's gonna hook you up Right.
1:00:09
Eric Howerton: It's everything that he does.
1:00:11
Mark Zweig: I'm just saying in theory, like my Rufor, I'm gonna get Rufing far cheaper than you can buy Rufing for, because the same guy's done 100 roofs for me and he knows I don't jerk him around.
1:00:22
Mark Zweig: Okay, so let's say, of the 20%, maybe I'm saving you 10%.
1:00:28
Mark Zweig: Now I'm only costing you 10%, yeah.
1:00:31
Mark Zweig: The other thing is I get to buy stuff cheaper.
1:00:33
Mark Zweig: Why is that?
1:00:34
Mark Zweig: I've got an account at the lumber store.
1:00:36
Mark Zweig: If I pay him in 10 days, I get 2% off.
1:00:39
Mark Zweig: Yeah, okay, so I could save you another 2% there.
1:00:44
Mark Zweig: You're not going to get that as a homeowner.
1:00:46
Eric Howerton: You see what I mean.
1:00:47
Eric Howerton: Yeah, you go down the home depot when you're paying full retail right.
1:00:52
Mark Zweig: So I've got a commercial account at Wayfair.
1:00:54
Mark Zweig: Even if you like, order lights or plumbing, whatever, I get it cheaper.
1:00:59
Eric Howerton: So how does our audience get in touch with you for their next project?
1:01:02
Eric Howerton: Do not call me.
1:01:08
Mark Zweig: I mean the business 20 years ago.
1:01:10
Mark Zweig: It used to really be fun.
1:01:11
Mark Zweig: We did one project at a time, I had my own carpenters.
1:01:15
Eric Howerton: Everything was great when I'm met you.
1:01:18
Eric Howerton: You were rocking at Roller.
1:01:19
Eric Howerton: Yeah, we were, but that was fun for you then it was fun, do?
1:01:22
Mark Zweig: you had five, ten million bucks a year in revenue and doing really high quality.
1:01:27
Mark Zweig: What really hurt us was when I came back to Swag Group yeah, and then my lead carpenter died a couple years later.
1:01:36
Eric Howerton: Yeah, jack, jack, that hurt everything, okay that's because you had somebody as a GC.
1:01:42
Eric Howerton: You had a Carpenter, I had a superintendent jack superintendent, that was a really good carpenter dude.
1:01:50
Eric Howerton: He was.
1:01:51
Mark Zweig: I mean, he's a cool dude, anything, jack, it'd be like he was such a positive guy like you'd say jack, can we do that?
1:01:57
Mark Zweig: Oh, yeah, we can do that.
1:01:58
Mark Zweig: I mean the whole house is like Falling off its foundations Seven inches out of level.
1:02:03
Mark Zweig: We have to jack the whole thing up, dig everything out, putting and put a foundation under it, lower it back down.
1:02:09
Mark Zweig: Sure, we can do that while the house is falling apart.
1:02:11
Mark Zweig: You know, no problem.
1:02:13
Mark Zweig: I mean, he just never broke a sweat, he was a positive.
1:02:16
Mark Zweig: Yeah, can do get it done.
1:02:18
Eric Howerton: Yeah, you know, the central theme of what we're talking about today is what we talk about and value basically every episode.
1:02:24
Eric Howerton: It's about good people.
1:02:26
Eric Howerton: Man, oh man, I'm telling you all the businesses are period I had good people.
1:02:32
Mark Zweig: It's so true.
1:02:32
Mark Zweig: I saw something I linked in today that was like, as a startup, what's the most important thing?
1:02:36
Mark Zweig: You know your lender, your investors, your customers, your people.
1:02:41
Mark Zweig: I said people.
1:02:42
Mark Zweig: Yeah, I was in the minority.
1:02:43
Mark Zweig: With the good people, you can overcome anything you really can and that.
1:02:49
Eric Howerton: And that doesn't mean finding the the brightest, smartest person that's ever existed, actually that's I mean I know we can.
1:02:55
Eric Howerton: We can have an episode about that.
1:02:57
Mark Zweig: Well, we need to talk about what kind of people we really want in our businesses.
1:03:00
Mark Zweig: I can say I could answer that real quick.
1:03:03
Eric Howerton: Okay, attitude, good advice with good attitude, just like you're talking about jack positivity, can do, get her done, can do is everything.
1:03:12
Mark Zweig: It is, man, I, I'm very frustrated with somebody.
1:03:15
Mark Zweig: I'm not going to mention you, because they'll listen and then say it's them, yeah, but they'll give you every reason why you can't do something.
1:03:23
Mark Zweig: I can't, and I, I'm, I'm Absolutely at my limit.
1:03:28
Mark Zweig: They stay for, even to the point where they start forgetting whose team they're on.
1:03:33
Mark Zweig: Totally Okay, it's like a mud in the p.
1:03:37
Mark Zweig: The enemy is outside the company, that inside, that's right.
1:03:43
Eric Howerton: That's right.
1:03:44
Eric Howerton: So and folks got to.
1:03:46
Eric Howerton: You know there's.
1:03:46
Eric Howerton: I have some examples too and I won't mention too much.
1:03:49
Eric Howerton: But People can get too wrapped up into the black and white, the pressure of business and Shut their door.
1:03:59
Eric Howerton: I've seen people change like legitimately change and they get wrapped up and they lost their luster, yep of life and in in they discount that value To the other people in the organization.
1:04:14
Eric Howerton: That's the problem is their cancer.
1:04:17
Mark Zweig: They're even attitude spreads to other people.
1:04:20
Mark Zweig: It's like, well, maybe I can't do it, maybe management really is screwed up, maybe management doesn't know what they're doing, maybe Management's going the wrong way.
1:04:29
Mark Zweig: Okay, and that skepticism and I'm smarter than yes is a big problem.
1:04:37
Eric Howerton: Dude, I tell you like it is, and it's not that hard to just Laughter.
1:04:44
Mark Zweig: Yeah having fun you are the best at that.
1:04:46
Mark Zweig: Thanks, man.
1:04:47
Mark Zweig: It's always fun with you, like I'm just we're also serious as hell.
1:04:51
Eric Howerton: Yeah, but I'm I have realized like To walk in a room every circumstance possible To have a little bit of laughter and smiling is what it's all freaking about.
1:05:04
Eric Howerton: I am.
1:05:04
Eric Howerton: It keeps you things 100% percent, man.
1:05:07
Mark Zweig: I'm so with you.
1:05:08
Mark Zweig: That's why it was so much fun to work with you.
1:05:10
Eric Howerton: Yeah, man, because we only do you know freaking.
1:05:12
Eric Howerton: I mean, it didn't matter what the hell was going on.
1:05:15
Eric Howerton: The whole world's candy we owe so much to so many, right, but we still freaking laugh, right, it's just, it's it.
1:05:22
Eric Howerton: It's almost like this whole episode, like I'm sitting here dealing with this other stuff.
1:05:26
Eric Howerton: Yeah, come here to big talk and I'll actually consider it therapeutic Because we can have a real conversation and I'm feeling like a freaking human again.
1:05:35
Mark Zweig: I wish we could carry this conversation on longer.
1:05:37
Mark Zweig: We're gonna have to pick it up again, because I do want to talk about employees.
1:05:41
Mark Zweig: Okay, and and I think I think it'll be good for some people to listen- yes if they want to get ahead and maybe be a firm owner or entrepreneur someday, mm-hmm, I think we can help them.
1:05:56
Mark Zweig: I think so too.
1:05:57
Mark Zweig: You know, I think so too, but now we're out of time and I gotta go meet an electrician.
1:06:03
Mark Zweig: Damn it on my job site, yeah, so anyway.
1:06:10
Mark Zweig: Well, listen everybody um.
1:06:12
Mark Zweig: We appreciate your tuning in.
1:06:14
Mark Zweig: Yes please check us out at www.
1:06:18
Mark Zweig: Big talk about smallbusinesscom.
1:06:20
Eric Howerton: There's a dot in there after the w.
1:06:22
Eric Howerton: Oh yeah, and I'm not here to judge you.
1:06:25
Mark Zweig: Big talk about smallbusinesscom.
1:06:27
Mark Zweig: Um, we still are looking for sponsors.
1:06:33
Mark Zweig: We have an interest in In putting out some good information.
1:06:38
Mark Zweig: Um to small businesses.
1:06:40
Mark Zweig: Please help us with sponsors.
1:06:42
Mark Zweig: We'll probably keep doing it though, and it's doing anyway.
1:06:45
Mark Zweig: Right, you can ride along with the cool factor though you could, if you you know, you could tell me how I should sponsor this episode.
1:06:53
Eric Howerton: They somebody like that should um, but anyway um.
1:06:57
Mark Zweig: So we really appreciate your tuning in and we will see you next week on another episode of big talk about smallbusiness.
1:07:13
Eric Howerton: Business.
1:07:13
Eric Howerton: Thank y'all.
1:07:23
Narrator: Thanks for tuning into this episode of big talk about small business.
1:07:26
Narrator: If you have any questions or ideas for upcoming shows, be sure to head over to our website, wwwbigtalkaboutsmallbusinesscom and click on the ask the host button for the chance to have your questions Answered on the show.
1:07:40
Narrator: Stay connected with us on linkedin at big talk about small business and be sure to head over to our website to read articles, browse episodes and ask questions about upcoming shows.