In our early days we dedicated ourselves to building single family, duplexes, and other properties for investors who were looking for buy and hold rental properties. Market conditions change and investors seek different real estate opportunities from new construction to foreclosures and from buy and hold rentals to quick cash out flips. Our specialty is new construction and occasional remodels but we also understand market conditions change so we adapt to an investors objectives. We let everyone know that if the deal makes sense to both parties then we are interested in discussing opportunities with investors and investment groups.
The easiest way to understand the 2 typical styles of builder models is by understanding the Private Label, Wholesale Construction model employed by Investor Construction.
In a nutshell, we build private label for you either under your own name or a joint name between both parties. This allows the investor to actually build community recognition of a name whereas the traditional builder method that publicly known builder will build and sell under their name. In that model the investor is hands off but that comes at a HUGE RISK for the investor - the investor LOSES CONTROL of the sales process. If the house is built and sold under the builders name then the builder controls the sales price and can liquidate a house to ZERO PROFIT and leave the investor to make no profit. In that circumstance the investor took the financial risk and would make no money. That is why most investors want some type of control or say in the entire process.
With regards to Wholesale Construction we typically work on a flat fee basis agreed upon by both investor and Investor Construction. As compared to the traditional builder method of cost plus the builder makes far more money because as costs go up, so does their pay. That is a retail strategy used for build jobs for individual home owners and should never be used by investors except under special circumstances. Building wholesale keeps the costs down and we do this typically in volume across multiple investors at a time. It is just a completely different business model than what is used by typical retail builders.
One simple question to ask another builder is whether that builder has a system to allow investors to keep track of construction with photos and updates of the process. What you will find out is practically all the builders will NOT have that type of system.
Well ..........we do. In fact this system was the foundation of starting Investor Construction. Knowing many investors are either out of state or travel these investors need some type of method to see photos and get updates on construction. Our system is built so investors can see updates on our website along with photos and completion updates of various aspects of construction. While not live videos the photos are updated often and give an investor knowledge of what phase the construction project is in. With just 1 log in ID an investor can track every project being built for that investor. For more information please see the Investor Web Updates section for more information.
Since we build for builders, contractors, lenders, and other real estate industry professionals we understand to make it financially possible for us to build for these companies we know we have to make it as cost effective as possible. We require the hiring company to be responsible for the financial obligations of construction and pay all the bills and we understand the hiring party is taking all the financial risk so we greatly discount our fee in order to be a part of the construction project. Our fee is based on our determination of the scope and timeline of the project but we base our fee on a low cost, flat fee basis and we do NOT ask for any benefits. In comparison to a hired employee who is providing construction management many of our clients we build for realize our pricing model is actually more cost effective than hiring a full time construction manager who is going to want a salary and benefits. Our model eliminates that when the hiring company combines the low cost, flat fee pay structure along with our short or long term independent contractor model.
We know investors and investment groups all have different goals in mind so we keep our business model flexible. If it makes sense for both parties then we are interested in discussing the projects an investor or group may want to develop.