How To Become Go-To General Contractor
So this is a question for those who are in the actual real estate development game and have contact with the general contractors who build the projects.
How does your shop go about finding general contractors for project? Is it normally word of mouth, or is it the guys who 'wine and dine' to get access to what you're building or just a hand select view which have done work before and just keep going back.
I know at the RE/GC level its not only about price (as it is for subs/general) but what does this process look like in general for you guys. Do you just ship over the engineer plans to the GC and take it from there or do you assess a price ceiling or what?
Curious to see how it all operates at the RE Developer and GC level.
Depending on the product you are building (multi family, industrial, office etc.), there will be known guys for the most part that operate in any given market. A lot of guys are national firms anyway with local operations. Other than that, it is the project delivery method that will dictate how you lock in a GC. If you go design build, you will seek an RFP that relies on qualifications as well as price. If you plan on stewarding the design 100%, then you get your design docs done first then shop it out to 3 - 4 guys to give you a fixed price. Personally, I like to have a group of 7 - 8 guys I like to bid to, but I only bid to 3 - 4 of them on any given project. You have to keep them honest. If you have more than 4 or so guys bidding, you lose the competitiveness somewhat. I also like to lock in a GMP (maximum price) and reconcile the budget at the end.
Do you handle development for a large firm or a local firm?
We are about 100 m sf but I handle one geographic location that covers multiple markets. I personally like to go with a GC who is responsive in the pre award phase, as long as their price aligns with what the market corroborates
Thanks. I assume there are parallels to the smaller projects down stream locally. Currently have a startup that does 3rd party estimation/takeoffs/project management for sub-contractors but really opening up to the idea of going in with a buddy to start a GC, so that's why I'm curious.
I have worked on tiny projects in the past and large ones. I use the same standards and approach on both. Where are you in the country? I think as a GC you could find a niche working with developers closely to get an in. Curious as to how popular your service is for subs.Makes sense. Most small sub contractors get stuck / lack of estimating capacity once they have a few projects going so I could totally see them using that service.
I'm in North Texas (think Dallas, TX) but more north near Frisco, McKinney, Denton which are huge hubs at the moment for construction.
It's actually been really easy to find work. Some of it revolves around the fact that these smaller contractors either don't have an estimator on staff and the CEO has to do it all, or they have just one that's half project manager and he's working 60 hours. It's a lot easier to outsource the takeoffs of private jobs than doing it by hand.
Blows my mind how many of these guys just won't buy take-off software and do it all by hand or when sourcing product just use ONE specific supplier even when they charge 30% more than the next costliest. But hey, if they did that they probably wouldn't need me.
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