Quote from @Zahmir Brooks-Smith:
Wow @Troy Sheets!
I see this big project and the "buy the block" idea fitting right in with what I imagine for West Philly. I'm an agent and investor, but I want to learn more about this kind of development. How did you go about getting the empty lots? I used to think running my property management company was the way to buy properties, but could being a General Contractor help get more investors on board?
Hi Zahmir, nice to see another Philly investor on here! These lots were on the MLS believe it or not, they were just overlooked for whatever reason. I did get one off market by cold calling the owner and have used wholesalers and marketing to secure projects in the past. I bought these about three years ago and was ahead of the curve a bit on this area but knew from experience that this area was a good bet. They're a half block off Lancaster Ave and there are multiple trolley and bus stops in several directions. There's a huge active church on the block that looks beautiful but isn't too busy so there's plenty of parking most days and there's a big elementary school on the next block so again, plenty of parking and it looks nice. There's the commercial corridor on Lancaster that will hopefully improve over time and be a benefit, and lastly, these are nice wide blocks with parking on both sides of the street and wide sidewalks so they feel nice and inviting and there's no drama on these blocks, very quiet. Lastly, I knew we were close enough to get the meds and eds from Penn, CHOP, Drexel, etc. and that's mostly who we leased to. That's why I was comfortable going a bit ahead of where development was when I bought these. I would look outside of current development areas but not too far, and look for blocks that feel good to walk down. Wide blocks, wide sidewalks, not too desolate, not scary feeling, no drama, etc. Go there at 6pm on a nice Friday afternoon and see what it's like too.
As far as being a GC, I ended up becoming a GC because the GC's in Philly are terrible. I hired out my first couple projects and realized I couldn't do worse blindfolded, now 60 projects later it turned out to be a great move for several reasons. First, I control quality, cost, speed, etc. Second, becoming a GC allowed me to quit my day job and go full time building my own projects as I charge my investors to GC the projects, and that allowed me to find more deals and investors much faster as being in/around RE all day every day is very helpful to scale quickly. Last thoughts on being a GC, if you have a track record, it's very encouraging for investors to partner with you as you have skin in the game and can show them previous projects you completed successfully. As I'm sure you know, finding a good GC is hard and that's taking one variable out of the development equation and puts investors at ease a bit.
If you have a day job in RE, I wouldn't say being a GC is necessary. It's a lot of work, you have to be on the projects every day looking for issues, watching your subs, etc. You really can't trust any of them to complete the work correctly, unfortunately, as the owners of the sub companies are rarely on site and you have to babysit their guys to make sure things are done correctly. Being a GC will take a lot of your time if you're doing it right and if you can't afford the time and already make good money elsewhere, I wouldn't go down that path unless you're passionate about construction and becoming a GC and can afford the time away from your current businesses or job.
