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Show Summary
In this episode of the Investor Fuel podcast, host Michelle Kesil interviews Robert Carmona, a general contractor and owner of XRB Construction Services. Robert shares insights into his approach to construction management, emphasizing the importance of honesty and education in working with investors. He discusses current projects focused on maximizing property value and zoning, as well as strategies for helping investors understand the construction process. The conversation also touches on Robert’s expansion plans and how he aims to create livable spaces that generate income for property owners.
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Investor Fuel Show Transcript:
Robert (00:00)
I tell people to double down onwhat they have. Take the projects that they already have in hand, properties that they already have, and try to capitalize on what you’ve got going or try to take advantage of the capabilities that your property has. Look a little bit deeper at your property, how it sits in the area. Like for example, had a client who had a very nice property, it’s just sitting there, it’s a two unit making some money. ⁓
But we renovated, a little bit more square footage because it was a smaller property on a larger lot. We were able to calculate the maximum floor area ratio for the zoning and we were able to add on creating a larger space and opening it up for.
a higher rental yield.
Michelle Kesil (02:24)
Hey everybody, welcome to the Investor Fuel podcast. I’m your host, Michelle Kesil And today I’m joined by someone I’m looking forward to chatting with, Robert Carmona, who has been making serious moves in the contractor and renovation construction space. So excited to have you on the show, Robert.Robert (02:43)
Thank you very much, I appreciate you having me.Michelle Kesil (02:46)
Ofcourse, think our listeners are really going to take something away from how you’re approaching helping investors with fix and flips and all the projects and renovations that you have accomplished over the years. So yeah, let’s begin to dive in. First off for the people that are not familiar with you yet, can you give the short version of what your main focus is?
Robert (03:11)
Yes, so the name of my company is XRB Construction Services. I’m a general contractor and my main focus is construction, construction management. We’re licensed in, for example, in the federal field ⁓ and also in roofing nationwide, except for California. ⁓ But we are…specialists and experts in construction, construction assessment and estimating, construction management, general construction, demolition, roofing, concrete and brick. And we try to become experts in those fields to include property assessment, zoning, ⁓ and conversion and deconversions as we talked about earlier.
So that way we can help our investors and our partners evolve the properties and make them more efficient and create livable spaces that make money.
Michelle Kesil (04:05)
Amazing. I love that.So what is one of the main keys or multiple of the main keys to keeping this business to run smoothly?
Robert (05:04)
I think it’s honesty. I’ve been in this space for 22 plus years and even though it’s been painful sometimes, especially because of the markets and the industry, it is just being incredibly honest and direct with my investors, my partners and my clients and my customers has been my number one superpower.because in this industry, know, everybody likes to hear, ⁓ you know, the niceties and the positives, but they don’t want to hear the truths about where we’re at and where we’re going. And we pride ourselves in being as honest as we can with our customers about the true value of the job and what is needed in order for us to succeed. And I think that that has been my…
My strength is honesty. Of course, there’s always been opportunities to take advantage of situations and investors and I’ve chosen the high road. One of my mentors when I was younger always told me that it’s always best to take the high road because the view is better ⁓ from above. And I always try to take the high road with my projects and ensure that all my customers know exactly where we’re.
and how we’re going to get there together. And I also try to take the initiative of being a partner on a project, not an employee or not a contractor, because I know that if we succeed together, ⁓ it benefits everybody. And I do respect the fact that people have to put up the money.
and put themselves in a position where they do hire us. as long as I participate as a partner and I’m honest, I think everything goes the way it’s supposed to.
Michelle Kesil (06:57)
Yeah, I think that is such an important component and definitely something that’s really needed in this world to share our truth and be honest and upfront. So thank you for that. So what are some of the things that you’re currently working on? Maybe something that you’re solving in your business right now?Robert (07:18)
Right now ⁓ we are working with some government funded projects for repair and renovation of commercial spaces and we’re also working with some investors ⁓ to multiply their properties and maximize zoning.Because we’re experts in zoning and building code, we take the opportunity to take our knowledge to increase capabilities of the property. So turning a single family home into a two flat or a three flat, trying to maximize the zoning so that way they could have.
multi-units, also ⁓ converting mixed-use properties with commercial space because the commercial lending has taken such a hit and is probably going to stay like that for a long time. Taking those opportunities to help real estate property owners and property management companies take their commercial real estate and mixed-use properties and maximize the number of units in a legal fashion. ⁓
not trying to cram a bunch of single families and a bunch of single units into a big space, but trying to make it livable so that way people can have affordable housing and at the same time. ⁓
and be able to maximize that real estate investment so that way they can capitalize on the space that they have. There are a lot of real estate property owners right now, especially after the pandemic, that have been left out to dry with empty spaces that need to be utilized in order for them to regain some of that value. And we’re trying to help those people get through that.
and figure out the best possible ⁓ method to do that legally and professionally and also be able to offer some affordable housing to the community.
Michelle Kesil (09:47)
Amazing sounds like some really powerful and profitable projects that you’ve got going on. So yeah, a lot of the listeners are investors in this space. What are some of the main ways that you are collaborating and supporting the investor community?Robert (09:54)
Yes, ma’am.⁓ Education is key. So ⁓ I do my best to ⁓ help my investors learn about the process, taking the value of construction seriously, not always going out there and looking for the cheapest route.
and understanding that trying to find the cheapest person or the cheapest contractor to do the work ⁓ is not the cheapest way because you won’t save money if the work is not done right. So I try to educate my investors and understanding the numbers and why the numbers exist the way they do and what it takes to do a job. ⁓ A lot of investors, which I don’t blame them, ⁓ don’t know construction and I don’t expect them to. It’s just like, you know, when you go to restaurant, you don’t know how they’re cooking the food.
You just expect the food to come out right and that’s what I try to express to my investors is Let me help you understand where I’m coming from where my numbers come from and where the price and value comes from and How I can help you manage the project more efficiently One of the biggest things that I started doing and I started actually doing this about 13 years ago I’ve been in the industry 22 plus years, but I learned about
percent of the way is that I separate the cost of materials and labor. So my investors have the opportunity to manage ⁓ two separate type of money streams. During COVID, it actually I ended up becoming a champion because of supply chain and cost of materials. It actually worked out. And since I already established myself as a person who does that and my company does that, everybody was pretty shocked and impressed.
that I had already been doing it for years. Most contractors don’t do that. And by most, I mean like 90 plus percent. ⁓ I started doing it 13 years ago where I let my investors manage the cash flow and the money stream with supplies and materials, and then also separately manage the manpower and labor costs ⁓ so that way they have… ⁓
at least some flexibility in ensuring that we meet our project requirements and deadlines. Not trying to ball everything up into one, which also helps going back to what I said earlier, it helps them understand the overall budget of the project by seeing both streams. So.
That’s how we’ve been doing it it’s been working and effectively. And I think my investors are happy, ⁓ sometimes a little taken back, but they’re very happy at the end of the day because they realize that they have a little bit more control. control comes in many different facets, like earning points under Home Depot credit, for example, or their American Express care credit. ⁓
help investors understand that the warranties too, if you’re a buy and hold and you have a property that you’re going to be owning for a while, it’s probably best for a property owner to purchase equipment like furnaces and water heaters on an American Express card or Home Depot card so that way they manage those warranties too in case the equipment fails down the line and they’re able to capitalize on those warranties and probably save a lot of money. In most cases they do.
By giving them those incentives and helping them understand the layers that it takes to get a project moving forward and being successful at it, it does help them evolve a little bit better. Not every investor wants to get their hands and roll up their sleeves and get their hands in that pot about all those different little facets. But…
what it does do, it gives them opportunities to make those decisions. ⁓ At least if they know and it’s in writing and they understand what they’re going, they’re gonna be getting out of that relationship. They’re making better decisions.
Michelle Kesil (14:58)
Yeah, amazing. I love that collaboration and that education piece. It’s so valuable for investors on all levels. Do you work with investors nationwide or just in the Chicago area?Robert (15:12)
⁓ Right now we are in the Chicago land area, which is the Cook County, Chicago and the surrounding areas. We’re in Indianapolis, Indiana, and we are in Florida, ⁓ which that market is a little challenging right now. ⁓And that’s what we’re focused on right now. We may be going into ⁓ North Carolina and Georgia. So we are looking at those markets. We have partners that are in all those spaces. We also don’t try to take any or end.
venture out into areas that we don’t have relationships in because I definitely am not in the mood to explore, especially with the fact that the bootstraps and the money is a little tight right now. So with everybody. So we try to go out to areas where we have partners and we have…
relationships with people who already have knowledge and history. So Georgia, North Carolina, Florida, Indiana, ⁓ Indianapolis primarily, and Chicagoland.
Michelle Kesil (16:24)
Amazing. Yeah, you’ve got many zones that people can use your support in.Robert (16:30)
I am federally registered and ⁓ licensed roofer mostly nationwide. So I do have about 10 to 15 states that I can do work in. Except for California and New York. Those are the only two. Can’t do any work in New York. New York and California are, I consulted on New York project ⁓ earlier this year, but New York is… ⁓Michelle Kesil (16:40)
Yeah.Yeah, those are usually the exceptions.
Robert (16:56)
Yeah, it is true what the song says. If you can make it there, you can definitely make it anywhere. It is incredibly expensive. ⁓ Insurance is about almost 10 times what it is here. ⁓And whenever you’re doing a project, that’s another thing too, is that people have to understand, especially with a lot of the natural disasters, is that when you’re doing a project, you’ve got to have builder’s risk. You’ve got to have good liability insurance on construction project in order for you to be covered. And if it’s affordable and effective, then it’s a good thing to have. if…
If you go into a space like New York or California and you don’t have deep pockets for the insurance or you don’t have a budget for that, then it becomes incredibly untouchable. ⁓
Michelle Kesil (17:45)
Yeah,makes sense. So what are some goals that you’re focused on right now?
Robert (17:53)
⁓ Right now, think because the industry ⁓ is experiencing fiscal challenges ⁓ with interest rates and lending ⁓ chokeholds, think ⁓ being flexible on helping people with their existing projects. SoI tell people to double down on
what they have. Take the projects that they already have in hand, properties that they already have, and try to capitalize on what you’ve got going or try to take advantage of the capabilities that your property has. Look a little bit deeper at your property, how it sits in the area. Like for example, had a client who had a very nice property, it’s just sitting there, it’s a two unit making some money. ⁓
But we renovated, a little bit more square footage because it was a smaller property on a larger lot. We were able to calculate the maximum floor area ratio for the zoning and we were able to add on creating a larger space and opening it up for.
a higher rental yield.
And at the same time, ⁓ she had an empty lot next door. ⁓ We asked her about it. She didn’t really know. So we went ahead and found out that the taxes were behind on the vacant property. She was able to get that property. And now we’re setting up to build ⁓ almost the same size home right next door. So she’ll have two unit ⁓ house.
right next to each other that she can have as a buy and hold and be able to rent out and and maximize her amount that she can retrieve receive on rent And again, it was right next door. It was literally the lot next door. So ⁓ a perfect example of What I tell investors double down, you know
Look at your existing portfolios and try to see what you currently have. The grass may be greener on the other side, but it’s probably very green right where you’re at. So just look at your property and talk to somebody like me. in the 22 plus years that I have, and my partners will tell you the same thing, there’s not many guys like me out there that take the zoning and the building code for your property and figure out how to maximize it.
And if you do that, I promise you, you’ll probably be pretty surprised. It doesn’t work all the time. I mean, there are some people who find out bad news like, you know, it looks like I may be over the size limits and may have to cut down. But at the same time, it gives you the potential to be able to see the opportunities around you. ⁓
And even just looking at properties near you, another client we had a few months back. The client next, we were doing some renovations. The property owner next door came over, knocked on his door and asked a question, hey, you guys are renovating? Hey, I’d like to get out of my house. I own a free and clear. And the property owner or investor was able to buy the next door property and take it over because the guy wanted to get out of it.
The
only reason he even thought to talk to us or talk to the investor, the property owner, was because he saw work being done. And now he’s got two properties next to each other, which is easier to manage. And he’s able to, again, capitalize on his current situation. So I tell people to double down. Look at what they currently have in their portfolios and double down. And if they do get an opportunity where they have…
a property that they’re going to attract or they’re going to purchase, look around that block, look around that area and see what other opportunities they may be able to jump on because there could be an empty lot that a city or the village is looking to get rid of and take advantage of that. All it’s going to do is beef up the portfolio, increase value and put them in a better situation where they can capitalize.
Michelle Kesil (22:16)
Yeah, I think that’s some good advice to just look at what’s already in the vicinity in proximity and I’m sure there’s a lot of value around you. I love that.Awesome. So before we wrap up here, if someone wants to reach out, connect, there are more from you. Where can people find you?
Robert (22:34)
⁓ Our website is the easiest thing. We are going to be publishing some apps to help out with estimating. We own an estimating algorithm called O &P estimating that’s going to help investors estimate construction projects. ⁓But xrbconstruction.com, reach out to me. There’s a contact information they can go ahead and add. And I’m available on the internet. I’m also available on LinkedIn and social media, xrbconstruction. By the way, I get a lot of people saying, you copy XRP crypto? And I did not. XRB has been around since 2006. It used to be X and R. We deviate it to XRB 2006.
P crypto came out 2012. So they copied me. So but yes, ⁓ and my name is in parentheses. So that way I’m at the top of every list. ⁓ So I did that in order to be, you know, to be at the top of most construction lists. I’m a certified federal contractor. I’m on the same dot gov federal registration. I’m also a certified ⁓ solar panel installation ⁓ for most states. ⁓
and also a national roofer with NHRA and I’m also ⁓ registered with most subsidized government grants in construction and renovation. So I’m on most lists and so they can find me. ⁓ It’s not hard to find XRB with the parentheses.
Michelle Kesil (24:06)
Perfect. Well, I appreciate your time, your story and your perspective. So thank you for being here.Robert (24:11)
Thank you, I appreciate the time too.Michelle Kesil (24:14)
Of course, and for those tuning in, you got value, make sure you’ve subscribed. We’ve got more conversations with operators just like Robert, who are building real businesses and we’ll see you on our next episode. ⁓
