A General Contractor’s Guide to Successful Projects with Jack Davis

Christian (00:01.26)

Hey everybody, welcome back to the show. Today we have a guest here, Jack Davis. We’re gonna be diving into the world of real estate contracting that he’s doing, that he’s actually a general contractor. So we’re gonna be discussing everything from budgeting, timelines, avoiding costing mistakes, and just maximizing your property value. So if you ever wonder what it takes to manage a successful construction projects or just how to work effectively with your contractor, this episode is definitely for you. So without further ado, Jack, my friend, welcome to the show.

Jack Davis (00:30.05)

Thanks for having me.

Christian (00:30.124)

How about you just introduce to the audience who you are, your background, and what you’re working on right now.

Jack Davis (00:33.027)

Yes.

So I’m a general contractor here. I service both San Diego and LA County. I have been in the industry since I was 14 years old, which is longer than I’d like to admit. And mostly I focus on ADUs, new construction homes. New construction’s not going on a ton here in San Diego and LA because of the lack of real estate, blank real estate. But I get a couple of custom homes here and there.

I love doing backyards, love outdoor living, pools, retaining walls, that kind of stuff. So I kind of, I do almost anything as long as it’s profitable, I guess.

Christian (01:14.422)

I know that’s right. That’s awesome, man. Well, cool. How about we talk about maybe just some common mistakes that maybe investors are doing right now or homeowners, right, that are making when hiring a contractor.

Jack Davis (01:26.818)

Yeah, mostly the homeowners, you know, the biggest mistake they make is a lot of them will price shop. obviously budget is a concern. But if you’re just strictly price shopping, you’re going to end up running into trouble. Now, if you enjoy fighting and going to court and that kind of stuff, then yes, that’s fine. You might get lucky. Who knows? But in general, you know,

If you’re doing let’s say an ADU or a kitchen or something’s gonna take a couple of months, you and I are gonna be hanging out for three to six months minimum. If you don’t like me, that’s a problem. And I’m not for everybody, you know? So in that regard, make sure that you, obviously reputation’s important, money’s important too, but make sure that you’re getting with somebody that you connect with and that you feel like you can work with over the next three to six months, because we’re gonna be hanging out.

Christian (02:08.105)

Yeah.

Jack Davis (02:28.302)

And then I would say, are you still there?

Jack Davis (02:34.51)

think I lost it. there you are. And then for investors, investors are looking just for the almighty dollar. Some of them are smart enough to get quality, but usually it’s gonna be dollars and cents, which is why I typically don’t work a lot with investors because I like the personal touch. I enjoy what I do and I’m into my craft. And when it just comes down to a business transaction, that’s…

I don’t like how that feels in business. I like to help people out and kind of make, I guess, dreams come true for lack of a better word.

Christian (03:11.913)

Right, absolutely, that’s the best way to be, right? Awesome, well, let’s transition maybe talking about budgeting and cost, right? That’s always a big thing, that’s very important. maybe let’s say how, can your clients specifically, how do you get them to avoid cost overruns, stay within budget, just on their projects that you’re doing?

Jack Davis (03:33.038)

And that’s a tough one sometimes. If you have an honest contractor, he’s going to be straightforward with you and just let you know, hey, this is what I see. I tell my customers to always plan for a 10 % contingency. So I’m going to give you a price for an ADU. Let’s say it’s $100,000 just for using arbitrary numbers. You’re then going to, we’re going to dig into it. And if we’re breaking into the existing home,

A lot of times we’re going to come across surprises that I don’t see what’s inside the wall. We could be in half a termites. There could be a, you could have cast iron pipes that we can’t work with. So we need to re pipe your house. There’s, there’s little things like that that can, that can come up and not be so little sometimes if we have to replumb your home, the cast iron piping, like that could be 20 or 30 grand. So it’s just knowing ahead of time. And if you have somebody like me, my job is just to educate the customer. And then I like

them make the decision because I’m not trying to sell you anything I’m here to help I follow a business plan and I make 10 % but I would always add in that’s not in the contract always make sure there’s at least a 10 % contingency and most contractors who are above board are going to tell you that the other hard part is a lot of contractors are going to lowball you to get in and I can’t tell you I literally have probably

three to five calls a month where people where I didn’t get the project for whatever reason, they call me up and they say, hey, you said I could call you if I get into trouble. And they’ve given them 90 % of their money and they’re not even half done. And so it’s like, well, that’s a tough one. You do have recourse, but now you have to go a legal route sometimes in order to get them to do what they need to do. And a lot of times too,

They don’t have they get the project done. They don’t know that it was done improperly They’ve paid in full and then they have a bunch of problems. I had one guy did like a basement style and The contractor quoted him $150 a square foot, which is literally half like that. That’s gonna be my material cost almost $150 a square foot and of course the next season when it rained the whole downstairs flooded and he had to redo it

Jack Davis (05:57.006)

He spent another $150,000, which is what he spent on the build, just to fix it. You know what I mean? So if it’s too good to be true, it usually is. The general rule of thumb right now is about $300 $400 a square foot for a granny flat. That doesn’t include tearing into walls or modifying the existing structure. That’s just to build it. Doesn’t include permits. Doesn’t include engineering, all that kind of stuff. Doesn’t include architectural drawings. So you just want to make sure that

You know, three estimates is like the cliche. I would say that’s pretty close. I would just do two. I would weed them out based off of what I maybe feel comfortable with when I spoke with them on the phone, how professional they were. And then I would get two, maybe three people out there. And then educate yourself. We’re in the world of Google. You can go on Google any time and just do some Google magic and put a couple of guesses in.

Christian (06:30.485)

Mm-hmm.

Christian (06:51.178)

out.

Jack Davis (06:55.499)

And then keep in mind too, sometimes their numbers are a little skewed because we’re in a microclimate in San Diego and LA where things are super expensive. If you do the same project in, let’s say, Arizona, it’s going to be half the price just because of our economy.

Christian (07:11.135)

Wow, wow, man, that is some valuable information right there. Let’s talk about maybe permits and regulations, right? I mean, what should people know maybe about today’s permits? You know, there’s building codes. I mean, there’s local regulations. There’s all types of stuff that comes to that. So why don’t you speak on that?

Jack Davis (07:29.602)

So the permit process is cumbersome and it’s its own animal. The best way I can describe it is you wouldn’t have a cardiovascular doctor do brain surgery or even work on your knee because they don’t know. And so even though I’m a general contractor and I know a lot of the code, I always recommend going through a company that does that. And are a very specific company that focuses just on that.

Most of the time, you’re gonna have a contractor, when you meet a contractor, you want to use whoever they have. And the reason why is because that relationship between the architect and the contractor is super important because there’s a lot of times I rely on them for information. And so if I need information and they take two or three weeks to get back to me for some crucial information and then project is on hold.

Now the project is on hold for two or three weeks or a month or whatever. And so typically for me at least, I won’t even get involved with a project unless my guys do all the plans and permitting and that kind of stuff. Because I know that if I call it Sunday at midnight, they’re gonna be there and pick up their phone, you know? And just like the relationship between you and me is really important, or between the customer and I is super important, that relationship between that is super important too because of that fact. And if you want to be a happy customer,

You want to make sure that that I have that relationship so I can get really have control over the project That really helps out and I’ll tell you this one little last thing if for whatever reason they don’t have a relationship with an architectural firm that is not the company you want to do business with because if it’s like a doctor not knowing a nurse that would make any sense

Christian (09:16.363)

Yeah, right. That doesn’t add up, right? Absolutely not. No, so you definitely have to make sure you’re looking out for that one. Absolutely. Let’s talk about maybe just some key clauses, right? That should be included in a contract to protect, you know, both you and the client.

Jack Davis (09:20.022)

Nope.

Jack Davis (09:33.09)

So I am very simple with how I write up my contracts. One of the things, it’s one of the secrets that a lot of people who don’t know, unless you’ve gone through the contractor’s licensing process, is that one of the things, the first things they teach you is you do not want to go to court. Going to court is very detrimental to a business.

Christian (09:38.656)

Mm-hmm.

Jack Davis (10:02.018)

the smart contractors avoid that at all costs. And so I’ve had situations where I’ve had to literally replace an entire floor just because the customer didn’t like the color. It cost me like 15 to $20,000. But just because I’m right doesn’t mean that that $15,000 wasn’t well spent because I might win in court, but it’s going to take so much of my time in order to

get involved with something like that, it’s just not worth it. And so I try to do my best to apply logic. I’m also very fortunate because I’ve come to a time in my career where I get to pick and choose my customers just as much as they choose me. So because of that, I have enough experience to try to avoid people where I don’t think it’s gonna be a good fit. In particularly, people that just want discounts right up front or they want the best price or anything like that. And don’t get me wrong, I’m not gonna overcharge you.

Christian (10:55.776)

Yup.

Jack Davis (11:00.554)

I follow a business plan. There’s a lot of people that will overcharge you, but for me personally, you know, I do straightforward business.

Christian (11:02.567)

I’ll

Christian (11:07.669)

love that. That’s the best way to be right? Let’s, I’m curious, man, you know, what was one of maybe your toughest projects you’ve ever worked on and how did you handle it?

Jack Davis (11:10.22)

Well, yeah.

Jack Davis (11:18.126)

So what makes projects tough are customers. Whenever the customer’s not there, projects are as easy as it gets. And I’ll give you a couple of examples. One of the examples is I used to flip homes in 2008 when everything crashed. And so those projects went really smooth. I can show up any time I want. If my guys were late or early, it didn’t matter.

Christian (11:22.538)

Yeah.

Jack Davis (11:46.926)

And so it makes it very easy and things go very quickly. And so I can get a construction project like that done very quickly. I’ve also done a home where only, it was just a single fire on a home where only half of it burnt down. And so that’s a very unique and it requires a person with the right skills to be able to do that. And I like to always reference, I would like to reference doctors because most people understand doctors.

You could have an ER doctor that can do amputation, no problem. And that is like building a new home. If we tore it down and started over, no problem. Any real contractor can do that as long as they have home building experience. But you require, if you want to do orthoscopic surgery or open heart surgery, if half the house is burnt down, we’re dealing with the existing structure. It’s way more technical and there’s a lot more pitfalls and a lot more things that you have to do in order to be able to achieve that.

So that particular project, that half-burned down one, the gentleman there, was very difficult. And I’m sorry I took on the project because of who he was, but I was able to get it done. We were able to get him back in a timely manner. But that’s the most challenging. Those are the fun ones. And I was able to make it very nice and meet his expectations.

At the end, he was able to calm down, but he was also got to take consideration. When half your house burns down, man, it’s a stressful time. And again, that’s where that relationship comes into effect. If you and I don’t get along well, you know? So the customers are the most challenging part. Fortunately for me, I’m really good at that, and I know how to, I guess, lubricate the process to make sure it’s as easy as possible.

Christian (13:23.253)

Right.

Jack Davis (13:35.436)

My job as a contractor is to take the stress off of you and I take that on. That’s what you’re paying me for. Because if you didn’t use me and you were to go and shop every subcontractor and all that kind of stuff, you can do it for cheaper, maybe 15, 20 % cheaper. Which in a large, in a million dollar project, that’s a lot of money, you know. But what stress, what anxiety, what is that gonna put on your plate to take you away from your day to day work and what you do to make money, you know.

Christian (14:03.113)

on top of the quality as well, right? I mean, that’s the thing. It’s like, what are you looking for as far as premium or are you looking for average quality, right? So there’s a big difference.

Jack Davis (14:08.167)

Exactly.

Yeah, and my apologies.

Christian (14:16.361)

No, go ahead, Jack. You’re fine. Go ahead.

Jack Davis (14:18.67)

Oh, the hard part is too, is when you shop for a subcontractor, let’s say you were to general the whole thing yourself to save the money, right? You would go and shop for a subcontractor and that subcontractor is a one-time customer to you. My subs that I use, some of them, I put 80 to 90 % of the food on their table and I’ve been working with them for 10 plus years. So like I said, if it’s Sunday at midnight, they’re gonna be like, yes sir, what can I do? You know what I mean?

So those are some of the things that are really important, just like with the relationship with the architect, the relationship with my subs is super important because that gives me lot of leverage with making sure the project runs smoothly. If I need to crack the whip, if it’s just a one-time customer to me, he doesn’t care. He’s be like, you ain’t gonna use me again anyway. So if I wait two weeks, so what? You know, who cares?

Christian (15:03.307)

Yup. Yup.

Yeah, that’s awesome. I was gonna ask you about how your subs work. So that answered my question. So I’ll ask you another one. So let’s say, you know, how are you managing multiple, you know, projects at once? You know, you got a lot, you got multiple houses, you know, projects going on. What is your strategy? What is your process for a prior toy prioritizing those?

Jack Davis (15:27.49)

Yeah, so my main purpose in my business is to get more business so that I can put food on the table and then just put out fires if there’s any issues or stuff like that. I usually try to do my rounds on a weekly basis to projects I have going on. And there are some customers that are demand to have me on the project on a regular basis or every day or something like that.

And I’m usually honest with them, I ain’t going to be there because that’s not how my business works. And so one of the concerns that always pops up with those type of customers is how do know they’re doing a good job? Well, a couple of things. Number one, I’m not using people off of Craigslist that I’ve never met before coming to do your project. So I have relations with these people. Number two, I’ve burned through a ton of subs over the last 20 years and I’ll go through more now. So you’re not doing business with any of them. You’re only doing business with me.

And then lastly, I lost my train of thought.

We were talking about yeah, so lastly if If I have to babysit my subs, I can’t work with them So when I first bring a sub on I’m going to vet him. I’m gonna put him on a really small project I’m gonna see how he is. I’m gonna see some of his other I’m gonna you know research him see what his license make sure his license is good and all that kind of stuff see some of his projects

you know, look at his reputation elsewhere if he has one. A lot of times the subs are, they just focus on the work and have relationships with generals. They don’t really advertise or anything, which is fine. But I’ll put them on a small project, maybe a bathroom or a kitchen, and just see how they do. And then from there, if they’re good, then they’ll graduate to some of the bigger things, you know. So that’s how I manage the quality control. And if they do a bad job and I need to bring in my trusted guys, then that’s just what I’m gonna do and I’ll…

Jack Davis (17:31.598)

redo your kitchen if I have to, it doesn’t matter. You know what mean? We have to focus on making sure that the end quality is good.

Christian (17:41.708)

Absolutely. No, I love that process that you have, you know, as far as just giving them a test trial almost, right? You’re vetting them out because what I’m seeing is a huge problem is, and you already know this, I mean, a lot of them just throw subs in just to fill the slot, right? Just to fill in the seat. And I just think that’s a terrible thing to do because you’re taking a huge risk by doing that. And that can really, really hurt your business. know, whether there’s, you know, general contractors listening to this, you got to do the right thing. You definitely got to make sure you’re vetting your subs out, you know?

Jack Davis (18:11.724)

Yep, and it’s also my job to make sure that I’m not taking on too much work and giving realistic expectation to the customer of when I can start. A lot of guys will promise stuff and then just push them out, be thinking they’re going to be okay, it’s not a big deal because they knew they couldn’t have started it at that time anyways, but they didn’t want to lose the business. I’ll pass on business all day long. I have plenty of business. I can always want more. There’s no…

Christian (18:16.938)

Right.

Christian (18:26.261)

Mm-hmm.

Christian (18:32.187)

Mm, yeah.

Christian (18:40.96)

Yeah.

Jack Davis (18:41.569)

It’s always great to be busy, but I’m super open and honest with my customers and I just let them know this is where I’m at. This is how the project will go. We can push it out. We can start later and I’ll dedicate a whole team to you or we can start it now, but there’s going to be gaps in between guys that are going to be there. Open communication is important and as a customer,

You have that sixth sense inside where you have that trust or not that trust or somebody being honest with you. If you get an uneasy feeling, trust that. Most people know, I can tell you seem like a straightforward guy. You didn’t lie to me. You know what I mean? Like we’ve had some dialogue. You seem like an honest person and I just get that from you. If you’re not getting that from your contractor, then that’s, you know, trust that, you know.

Christian (19:14.047)

Mm-mm.

Christian (19:18.699)

Yeah.

Christian (19:33.259)

Absolutely, your intuition does not lie, right? And as soon as your gut tells you something, it’s important to listen to it. That’s all from it. That’s it. Exactly. You move on, right? Life’s way too short. Well, Jack, man, I wish we honestly had a lot more time, our friend. I feel like we could go on for an hour on the subject, but anything you want to tell the audience and just how they can find your company, right? How can they work with you? Where do they need to reach out to?

Jack Davis (19:37.389)

Yeah.

And even if it’s wrong, who cares? Just, you didn’t do business with him. well. You bet.

Jack Davis (20:00.108)

Yeah, so I’m on Yelp, Google, Facebook, Powerhouse Green Construction is the name of my company. you Google that, I’m out of La Mesa. And I focus on ADUs and that kind of stuff. I don’t do really small projects, but if it’s profitable and it’s something in my wheelhouse, I’ll come out and do it.

But just to do your homework, guess, is the big thing I would leave you with. Make sure to do your homework, vet these people well, and trust your sense, and you’ll be all right.

Christian (20:35.403)

Jack, it’s a pleasure having you on my friend. Guys, if you’re listening to this, definitely be sure to reach out to Jack. We will also list all of where to find him inside of our description on our YouTube as well. But Jack, thank you for coming on my friend.

Jack Davis (20:38.659)

Yes.

Jack Davis (20:48.046)

See you guys later, thank you.

Christian (20:49.386)

All right guys, hope everyone enjoyed the episode and as always, we’ll see you on the next one. Take care everybody.