From Defects to Deals: Michael Gentile’s Multifamily Construction Secrets

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In this conversation, Michael Gentile shares his journey from growing up in a construction family to becoming a successful professional in the multifamily renovation and construction defect testing industry. He discusses his move to Dallas, the importance of networking, and the challenges of navigating client expectations in construction projects. Michael emphasizes the emotional impact of construction defects on clients and the need for effective communication and empathy. He also highlights the significance of proper inspections and aims to be a resource for clients facing construction issues.

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Michael Gentile (00:00)
one of those things through experience, it’s like an onion. You just start peeling back the layers. And typically, the more layers that you start to pull back, the worse it gets.

honestly, it’s heartbreaking for me because I’ve built my business from scratch. I went from zero to 25 million. I’ve had a partner that just wiped it all off the board and had to start from scratch again. And so I understand the pain of

of receiving bad news. so when I sit with somebody like that couple and I’m talking with them and you can just see in their face the expression of concern They saved money. They invested in their own facility versus renting from somebody else. They thought they were doing the smart thing.

and all of sudden you have a bad GC doing shoddy work And now they’re looking at this investment where they’ve already dumped a million dollars into the building. And they’re looking at potentially another 600,000 to 700,000 of all the corrections because you have to tear it all off and then go back.

Dylan Silver (02:37)
Hey folks, welcome back to the show. Today’s guest is based in Argyle, Texas, lifelong professional in the construction industry with a focus on multifamily renovations and construction defect testing. Please welcome Michael Gentile. Michael, welcome to the show.

Michael Gentile (02:55)
Dylan, thank you. Pleasure to be on the show. Thank you for having me.

Dylan Silver (02:58)
Absolutely. I always like to start off really at the top by asking folks how they got into real estate, the construction space. How’d you get started?

Michael Gentile (03:07)
So I have been in the construction world the majority of my life. My father owns a landscape construction company in Westchester, New York, Salgentia Landscaping, and he’s owned and operated that for the last 43 years. So it’s kind of something I just grew up around. My uncle owns a tile company. My godfather owns a large paving and hardscape and foundation company.

So that’s something I just grew up around. And then when I graduated from high school, I wasn’t huge into school. And I just started working for my father, ended up working for him for about eight years. realized that I loved the construction space, but I was also looking to make a move. And then I eventually moved down to Dallas in 2014 with my wife and got back into construction in the multifamily world and absolutely fell in love.

Dylan Silver (03:59)
Walk me through the move. I’ve done a similar move. I’ve moved from Massachusetts down to San Antonio and I didn’t know I was gonna be a real estate guy when I did that. So that was really a leap of faith. But walk me through the move. How did you end up getting down to Dallas? DFW.

Michael Gentile (04:16)
So the standard answer I always tell everyone, which is usually a good indicator of whether I’m going to be friends with somebody, is I always tell people guns and Republicans. And I either get a chuckle or a scowl, and I find out real quick. But ⁓ in actuality, I was in my mid-20s, newly married, and my wife and I, she had grown up in Frisco for a couple of years. She had her grandparents down here, and we had…

Dylan Silver (04:28)
That’s it.

Michael Gentile (04:42)
traveled back and forth and I just had always loved the North Dallas area and It actually just happened more by happenstance anything else. So my wife was actually like hey, let’s let’s maybe think about it and then so she put a job posting out her job in New York saw that she was looking for jobs in Texas and fired her and So I said, hey, why don’t you just go visit your grandparents?

Dylan Silver (04:50)
Yeah.

Michael Gentile (05:09)
put your resume out there, do a few interviews and see what happens.

And so she went down there, she didn’t make it to the parking lot of the second interview and they had checked off every single box that we said, if they hit these categories, I’ll pack up our life and we’ll move. And so the categories were, you’re gonna make more money than you would New York, you’re gonna, you know, it’s gonna be great. And there’s all this stuff that we, and then literally.

happened like that and I called her up I said great so you’re gonna come back we’re gonna move and she’s like no I start Monday so two months later

Dylan Silver (06:28)
⁓ my gosh, Ethan,

I gotta get down there.

Michael Gentile (06:31)
Yeah, two months later I moved down. She was already here. We got our apartment and haven’t looked back since.

Dylan Silver (06:37)
I want to ask you about getting into ⁓ construction in an area of the country where you have limited familiarity. You mentioned your wife’s family and she’s originally from there, but your ties and all your connections were East Coast. And so going down, starting really fresh, we talked a little bit about this before hopping on here. What was that like that first year in business in DFW?

Michael Gentile (07:03)
So I was fortunate to wear where I moved down here. ⁓ The simple thing is you don’t have anyone and you just have to continuously meet a great mentor of mine, Edvis Ananze. He taught me this thing called the three foot rule. And basically it’s, hey, if someone’s within three feet of you, you just say hello. How are you? What do you do? And honestly, a lot of my friends, connections,

have come from something similar to that where I’m just living life and I’m having a conversation. I don’t know if it’s going to go anywhere. I don’t know if it’s not going to go anywhere. It could just be a conversation where I’m just being nice to somebody for the three minutes that we’re in a Kroger checkout line. And so a lot of contacts and connections have come that way. Actually, one of my largest customers ⁓ actually came from, I had this person I was trying to meet, not going say his name, but

And I couldn’t get a hold of him. Like, there was a director of construction for a specific company. And I had called him. I visited his office. I had cold called. had not. I had visited every property he was the director of. And I actually ended up getting a chance to meet him. I was at a Home Depot in a checkout line, working for another GC at the time. And I just saw this guy had the logo on the back of his vest. And I just said, hey, you must be.

And I just said the guy’s name and he turned around with this giant grin on his face. And he’s like, no, but he’s going to be in my construction trailer in an hour. You should come meet him. Now. I didn’t realize it. This guy was notorious for practical jokes. And so he was setting me up to just embarrass the guy I was trying to meet. Cause the guy hates meeting new people, but I showed up to the meeting. There was 50 people for a new construction build meeting and the guy’s just chuckling in the corner.

And that was the relationship to what eventually ended up being nearly $15 million in construction work over the course of six or seven years. So a lot of connections just from, yeah, just, just, Hey, I’m Mike or Hey, who are you? know, so a lot of it was just that.

Dylan Silver (09:01)
That ended up working out.

I want to ask you about ⁓ construction defect testing. Again, talk a little bit about this before hopping on the podcast here. You explained to me a little bit about it really coming in to builds where things didn’t go quite as investors would have liked. There may be some issues. And then them having to reach out to someone like yourself and say, hey, we have this issue. Can you come take a look at this?

Michael Gentile (10:07)
Yeah, so I got my first taste in construction defect work when I was working for another general contractor and ⁓ actually working hand in hand with a ⁓ consultant, Brent Fuller actually, great construction consultant if you’re in the DFW area. He does a lot of new build stuff to help prevent it on the front end. But we were working on a project together and it was ⁓ balconies, doors, and windows. And as we were

uncovering this work that was not very old. was, was a eight year old build. It should not be leaking at the way it was the rot, the deterioration we were finding in the balconies was crazy. I mean, things to where it was ready to collapse. And so I became fascinated with, Hey, why is this happening? What are the proper ways to do it? And so being immersed inside of that process and learning from really skilled

consultants, engineers, architects, I was able to find a niche in the market to where I can now be an expert and come in and go, OK, hey, this is leaking because when they did this balcony to stucco transition, they reverse flashed the corners, right? Or they didn’t do the proper system for a polyguard system. And so a lot of times I’ll get called in, and a lot of times where construction defects happen is,

⁓ Typically around windows, around doors, but it happens just because there’s so much construction happening at such a fast pace that it’s almost impossible for superintendents to go and properly inspect everything that’s happening while it’s happening. And then in addition to that, you have a number of unskilled trades, right? Like guys that were, like if you really think about over the last decade, they say for every seven people that exit,

Dylan Silver (11:47)
Yeah.

Michael Gentile (11:59)
seven skilled people that exit the construction industry, one person enters. You have this shift of new people that are not properly trained, they’re not getting educated, and the construction’s happening at such a fast pace that all that construction companies can do is, hey, go do that balcony. You saw, you know, George do it two weeks ago. That means you can fully waterproof a balcony today.

And that’s not the case. A mistake’s going to happen if you’re not inspecting what you expect. And so a lot of times I’ll get brought in on those aspects.

Dylan Silver (12:32)
I want to pivot a bit here, Michael, and ask you about what it’s like to walk into some of these projects and what are the expectations of folks who may really not know what they’re dealing with? Or do they always know like, we’ve got this issue over here. You know, we kind of understand how much it’s going to cost to fix. Or is it very much like, hey, we think there’s something going wrong here potentially, but we don’t know the damage and exactly how much it’s going to cost to fix.

Can you tell us exactly the ballpark that we’re in? What’s the variance of situations that you encounter?

Michael Gentile (13:04)
Yeah, the chasm is wide. ⁓ I can give you one instance. I’m working with a gentleman, actually a family there, a business here in Denton County. And ⁓ they bought a building from a gentleman, or really they actually developed a building with a GC. throughout construction, everything seemed fine. Communication was a little off. Schedule wasn’t that great.

Ultimately, they got to the end, got fed up, and they’re like, hey, we just need our CEO. Got the CEO and then called my company up and said, hey, I have $200,000 to finish out the punch list. At the time, I was so busy, I just sent one of my salespeople up there to go do it. And this guy was just, he was like, hey, we need an arc fault protector. We have ⁓ leaking around our baseboards.

Our coping is kind of coming off. The AC is not really cooling. And so my salesperson and estimator put this bid together. They put it in front of me and I’m reading the notes from the, CRM and I’m looking at the bid and I’m like, this just isn’t matching. Something’s wrong. So I called the guy up and I go, Hey, I’m your notes say that you got your CEO in October. We’re in February of like

Five months later, why are you putting $225,000 into your building?

Dylan Silver (14:27)
Yeah.

Michael Gentile (15:10)
And so he starts to tell me the story of what happened. And as I got to the building, it’s just

one of those things through experience, it’s like an onion. You just start peeling back the layers. And typically, the more layers that you start to pull back, the worse it gets. And so in that instance there, it was very much like,

This guy had no idea. He was hoping he could spend $225 and be done with it. And as I pulled it back, I’m like, hey, your roof is not done properly. Your coping cap on your roof doesn’t have a cleat system. It’s actually just gutter material that they just bent over your coping. Your sticky stone was installed in properly. You have no weep screens, which is why it’s leaking on the inside of your building.

Your storefront glass system isn’t storefront glass. It’s welded steel with glass panels. So you have almost zero heat barrier, which is why your building is so hard to cool, because it’s 105 outside in August. In addition to that, you don’t have a return air system that’s properly sucking from 70 % of your open space. You have no return air in your two.

farthest offices and then your system isn’t large enough for your air conditioned space. And that’s just what I gathered in my first hour.

And so as we went through it, we start to, yeah.

Dylan Silver (16:27)
I’ve seen some situations like this as a distressed wholesaler where I’ve walked into and you see you peel back one layer and you’re thinking, well, this is only going to be this much and renovations and rehab estimate. You take up the subfloor, there’s an issue with the foundation, massive crack, now you need to float the foundation. mean, you like you compared it to the onion. I can only imagine in some of these commercial deals in a situation like that.

Michael Gentile (16:35)
Yeah.

Dylan Silver (16:54)
That’s gotta be a difficult conversation to have. You must have the conversation quite often. ⁓ When you’re going through that with them, right, I mean, they have to be a little bit shocked, but also a little bit, you know, like, well, what do I do now? Like, can I even hold onto this asset type of thing?

Michael Gentile (16:59)
Mm-hmm.

That comp, honestly, it’s heartbreaking for me because I’ve built my business from scratch. I went from zero to 25 million. I’ve had a partner that just wiped it all off the board and had to start from scratch again. And so I understand the pain of

of receiving bad news. so when I sit with somebody like that couple and I’m talking with them and you can just see in their face the expression of concern of, hey, like, I think like this is, this is a family that took 30 years to grow a business. They saved money. They invested in their own facility versus renting from somebody else. They thought they were doing the smart thing.

and all of sudden you have a bad GC doing shoddy work or unsupervised work. I don’t know what the situation was there because I never met the guy. And now they’re looking at this investment where they’ve already dumped a million dollars into the building. And they’re looking at potentially another 600,000 to 700,000 of all the corrections because you have to tear it all off and then go back. And

so

It’s immensely distressing for those people because they just don’t know. Like, hey, what am I going to do?

Dylan Silver (18:25)
Yeah.

Michael Gentile (18:27)
about that. ⁓ They’re just like, hey, what am I going to do ⁓ in this situation? So a lot of times I’m having to coach them through it of like, hey, I’ve done this, here are the next steps. And there’s obviously the litigation route, you can go down that road. And if it’s large enough, there are times where I recommend it, but I’ve also been through litigation. And so it’s one of those things where like, I know that the outcome isn’t always there.

Dylan Silver (18:28)
That’s alright.

Yeah.

Michael Gentile (18:50)
And so it’s one of those things of you’re trying to get them in front of as many professionals to get the best advice possible, getting them in front of engineers first. Hey, is the building structurally sound or do we have a structural defect where this place isn’t safe? Right? So that’s number one, life safety first. Two, comfortability, right? Clean, safe, functional. Is it functional? Can you operate in it or are there cosmetic things that we need to do?

to enhance the living situation. ⁓ And so as we go through the series of people, sometimes it does end up in litigation and sometimes they’re just like, you know what, this guy’s out of business, they’re bankrupt, I’m just gonna put the 200 grand I have into the building and I wanna make it the best I can from what you believe. And then from there we start to dissect, okay, hey, we can do these five things to make the building the best that it could possibly be right now. And then maybe you…

to save for the future for the next five things.

Dylan Silver (19:46)
man, I’m sitting here having not done one of these deals and thinking about the conversations that need to be had. It’s interesting because I like in real estate to book knowledge, but also really more so, especially in my job as a realtor and someone who works with investors and distressed sellers. It’s more so about the connections where you’re at because it’s so technical. A lot of it is.

Michael Gentile (19:48)
It’s hard.

Dylan Silver (20:10)
the knowledge of course, but then also I’m thinking about this conversation and how truly, I mean, difficult it is on all sides. Delivering the news, receiving the news, also kind of walking in and being aware that, this wasn’t added up, so I gotta keep a keen eye on two things and ⁓ definitely needed, because you can imagine if they’ve already put in so much money into it, and then.

Michael Gentile (20:20)
Mm-hmm.

Dylan Silver (20:34)
they’re not getting the results that they need. Now they’re having holding costs which are incurring just keeping the place, you know, upright and active. And now they got to find out what we got to basically double our investment. It’s not good on all sides, but ⁓ it’s interesting for me to hear about because of course I’m looking at, you know, my role is in the distress space and we deal with this all the time on a much smaller level on a bigger level. The problem is multiply, right? So

Michael Gentile (20:41)
Yep.

Dylan Silver (21:03)
You have a bigger build, you have more money, there’s more leverage, but there’s also more risk. ⁓ Michael, are coming up on time here though. Where can folks go if maybe they have a difficult ⁓ construction that they’ve been dealing with and maybe they’re in the greater DFW area they’d like to reach out to you? Or maybe if they’ve ⁓ just like to reach out to you, get in contact with you and they may be in another part of the country.

Michael Gentile (21:05)
Mm-hmm.

Yeah, so fortunately we operate obviously throughout the state of Texas and I’ve done construction for multifamily across 13 different states with different JV partners. You could always reach us at www.exaltedcg.com. X-A-L-T-E-D C-G.com. You can reach out to us via social media. It’s at Exalted Construction Group, whether it’s TikTok, Instagram or LinkedIn, Facebook. It’s the same handle across all platforms. So

You can reach out to us there. My hope is this, and the reason why I’m talking on so many podcasts and really trying to get out there is my hope is that you call us the first time. The reality is by the time I show up on the latter part, I’m the greatest advocate you could possibly have. But we do a lot of stuff on the front end where we’re actually the builder or we’re actually getting into development now to do things in a proper fashion. ⁓

rather than on the back end. So for us, the biggest thing is say we want to be a resource. We don’t want be able to reach out to people, walk them through the problem, and then do it with professionalism, but also with empathy, because they’re going through something immensely difficult.

Dylan Silver (22:41)
Yeah, Michael, congrats on your success and to your continued success and what you’re doing really is an incredible niche to be in. ⁓ And as a Texas licensed realtor myself, I can say that it’s truly amazing to be able to connect with folks like yourself. Thank you for coming on the show here today.

Michael Gentile (23:02)
Thank you for your time and I’ll say I appreciate you having me on the show.

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From Defects to Deals: Michael Gentile’s Multifamily Construction Secrets

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