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Show Summary
In this conversation, Edward Carrick, an engineering expert, discusses the intricacies of ground-up construction, particularly in Louisiana. He emphasizes the importance of foundation design, the challenges faced by newcomers in the construction industry, and the ongoing urban sprawl in the region. Edward also highlights investment opportunities, especially in mobile home parks, and the emerging use of drone technology in construction engineering.
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Investor Fuel Show Transcript:
Edward Carrick (00:00)
they decided to diversify and develop real estatewhen you come from a completely different industry and you try to just jump into construction, it’s certainly a pretty steep curve.
Dylan Silver (01:41)
Hey folks, welcome back to the show. Today’s guest, Edward Carrick, out of Covington, Louisiana, is the co-owner of Charlie Rick Engineering and the owner of Performance Analysis. He’s an Army veteran and a graduate of the University of New Orleans with a degree in engineering. Edward, thanks for taking the time today.Edward Carrick (01:59)
Hey man, thanks so much for having me. I’m excited about it.Dylan Silver (02:03)
Now, when we talk specifically about the immense amount of ground-up construction that we’re seeing in Louisiana, I’m licensed in Texas, a lot of ground-up construction in Texas, one of the things that I haven’t talked about on this show before is the engineering portion of it that goes into ⁓ ground-up construction in general. And so for folks, including myself, who are not familiar with what that entails, walk us through on a base level, the engineering component of new construction.Edward Carrick (02:34)
thing, it is quite different in residential versus commercial. We’re a little heavier in the residential side, but we do both. ⁓ One thing that I noticed is I did live in Texas for a little while and I still do some work there with other engineers. I’ve noticed that 10 years ago, Texas, especially with residential started getting more strict and requiring more. And I said, Ooh, man, that’s coming. That’s coming to Louisiana. Louisiana is always last to adopt in many things. And now it’s starting to come. We’re seeing it.Like for instance, ⁓ when you build a house, say a 2000 square foot house, a lot of times contractors say, I’m going to put in a three ton air conditioner. Bam, done deal. And that works most of the time. But if you oversize, really bad things can happen. 10 years ago, I saw that Texas was requiring for houses that cooling load calculations be done. And those are pretty extensive detailed calculations. Now we’re starting to see that hit here now as well. ⁓
We have to do that. Sometimes we have to do drainage calculations to make sure that whatever’s built is not going to impact any upstream waterways and cause other people to flood. We have to do foundation designs, electrical designs, things like that. But it’s pretty light duty on residential.
Dylan Silver (03:51)
Now, when we talk specifically about foundation, this is something that is super, I mean, you can’t overstate it, I feel like, because, you know, this can be a huge area of concern on any real estate project. And ground up construction specifically, you never want to be in a position where this foundation issue after things have settled. What type of ⁓ work goes into identifying, you know, not just, hey, this is how we’re going to do, you know, ⁓do the foundation, but also too, we have to make sure that the soil is ready for this type of construction.
Edward Carrick (04:26)
Yeah, absolutely. ⁓ Every time that we do any foundation design, we have pretty strict guidelines on the drawings that say it must be compacted to such and such a requirement, ⁓ X amount of PSI, ⁓ things like that. ⁓ We size the foundations, especially the slab on grade, concrete on the ground. ⁓ We size it so that it’s going to hold. If there’s a weightbearing walls load bearing walls we make sure that there’s extra footings under there all those things have to be uh… take no account and it’s emissive mundane and not so sexy or not so uh… critical but uh… you do a bunch of these and it gets to be kind of run of the mill but if you don’t do it right obviously a lot of things can can go wrong
Dylan Silver (06:05)
And absolutely. And I’ve seen it happen in, you know, the fix and flip space where you don’t see that there is a foundation issue until you start taking, you know, up the subfloor and so forth. But then also I’ve seen it happen in new construction where, you know, someone does, you know, not maybe the full due diligence. Now you’ve got a foundation crack running upside the home on your new build. You never want to be in that position.I would like to ask you specifically, you know, we’re seeing an influx of people, I can speak certainly for Texas, I imagine it’s a similar thing happening in Louisiana, from other segments of real estate get into ground up new construction, whether that be from fix and flip or, you know, buy and hold into a new construction and getting themselves into being a developer of sorts. Are you seeing any common errors that people are making when they’re
they’re going about that transition from one asset class to another.
Edward Carrick (07:04)
Are you talking about commercial and residential either or?Dylan Silver (07:07)
⁓ Yeah,construction in general, yeah.
Edward Carrick (07:11)
I a good commercial and I won’t name ⁓ any names, but a big company that was ground up in IT company, global IT company, ⁓ the owner is, ⁓ I’ll just leave it at that, butthey decided to diversify and develop real estate and they’re doing a good job. They’re putting a lot of stuff up, but.
And we work with them. They’ve had a few challenges because they’re IT people, right? And now they’ve formed their own construction company. And ⁓ I got involved and I said, wow, this is going to be fun. This is going to be fun trying to lasso these wild horses and pull it together. I wouldn’t say there were errors that I noticed, but there’s ⁓ definitely like when you come from a completely different industry and you try to just jump into construction, it’s certainly a pretty steep curve.
Dylan Silver (08:04)
Yeah.Edward Carrick (08:04)
and we were able todo this.
Dylan Silver (08:07)
noticed that that as well. mean, not not just from not just from, you know, tech into real estate, but also from another segment of real estate into ground up construction. There just seems to be another element that comes with that ground up element that that is, you know, for a lot of people and unknown and there is ⁓ a steep learning curve, I would say there there for most folks. I would like to pivot there. ⁓ Pivot here, though, Edward and ask you specifically aboutreal estate in Louisiana. I’m a little bit of a fish out of water in this space, but I know that there is, of course, a lot of ground up construction happening. Are you also seeing there being, you know, more of a push towards ⁓ almost an urban sprawl of these cities, that all of these cities tend to be expanding and adding subdivisions around the outer limits of where the current city ends?
Edward Carrick (09:01)
Yeah, we’re in a really unique situation where we are. 30 miles north of New Orleans on the southeast part of Louisiana. New Orleans has its own, let’s just say political and cost issues and swamp issues and things like that. you know, it’s always been to say that, you know, there’s not much more you can do in New Orleans. It’s not ideal. So I live across this lake. It’s actually a 24 mile bridge that you cross to get from where I live in Covington to New Orleans.And this area has traditionally been like a bed and breakfast, or not bed and breakfast, but like a, what do call it? a breakfast. ⁓ People, people live here and commute to New Orleans is what I’m trying to say. ⁓ It’s a lot more rural ⁓ and it doesn’t have the low lying, flooding, marshy areas like New Orleans. So things are starting to come here. ⁓ Industry, especially along the interstates is starting to occur. And for the last.
Dylan Silver (09:41)
Okay. Okay. yeah.Edward Carrick (09:59)
20 plus years, know, they’ve been popping up subdivisions everywhere to the point that the infrastructure is not able to handle it as well as it could. But I see that continuing on. I think our area, what we call the North Shore or St. Tammany Parish, is probably going to continue to flourish and grow both commercially and residentially for a long, long time. That’s what we hope.Dylan Silver (10:57)
Now for investors who are looking at that urban sprawl of New Orleans, you mentioned being 30 minutes outside. Are there any specific obstacles that they might face, whether it be having to find the right type of tenants, for instance, when you’re going further out, there might not be as many options, or even something on the level of, hey, if you’re working with contractors in a certain area,They might be having to send teams from New Orleans. That could be trickier. Are investors dealing with any level of that?
Edward Carrick (11:32)
think the infrastructure on available services and construction firms over here is good. I think that’s not going to be a problem. What I do see as things to consider is that St. Tammany, ⁓ it’s the parish that we live in, same thing as a county elsewhere, ⁓ tends to be very, very, very conservative and not wanting to grow real fast. So they are a little strict, I think, in some regards, as far as permitting and what they require to get things off the ground.⁓ I think that’s fading away. It has to because we have almost unlimited land here and the desire to be here seems to be growing. So I think they’re working through some of that, trying keep it at bay with the infrastructure and kind of keep all things moving along together.
Dylan Silver (12:23)
I would like to ask you about, and I know probably a lot of people are thinking about this when they’re thinking about investing in the greater New Orleans area, which is insurance costs, right? And so I’ve seen in areas like Houston, Texas, for instance, that you might have, you know, the insurance portion of your mortgage may actually be more than just the debt service on the mortgage. Is this an issue that’s happening, you know, in the greater New Orleans area as well?Edward Carrick (12:50)
Yeah. ⁓ I hate to always go back to it, but we always go back to that one point in time, Hurricane Katrina back in 2005. And that was, that was a doozy. We had a big one, a pretty big one, not nearly as big Hurricane Ida back about four years ago. ⁓ and they kind of really shook up the insurance industry for a while. We lost our insurance on our own, own house because, ⁓ they were just pulled out. were pulling out, pulling up. And at one point they use the interstate 12, ⁓ which is just, ⁓500 yards north of me. They use that as a line of demarcation and said we’re not going to ensure anybody south of I-12. ⁓ know that insurance became more available and we were able to regain our insurance. I’m going back 10 years ago, but ⁓ I think it’s probably expensive. I did live outside of Houston for about five years and it was amazing how much more affordable things were over there because you Houston can expand forever. We’re we’re more locked in.
Dylan Silver (13:46)
Yeah, yeah.Edward Carrick (13:49)
by waterways and things like that. And hurricane.Dylan Silver (13:52)
Are you seeingthere being an influx of investors from outer state in Texas or in the neighboring states who are looking at investing in, again, that urban sprawl of New Orleans? Or is it a lot of people who are based in New Orleans investing out
Edward Carrick (14:12)
From what I can tell ⁓ Baton Rouge is about an hour west of us. That’s our capital. ⁓ We have some developers from there and a lot of local developers here in St. Tammany, Covington, Mandeville. Excuse me. There’s probably some in New Orleans, but it really is ⁓ where I live, North Shore, we call it St. Tammany. ⁓ It’s different than New Orleans. It’s almost like the New Orleans people stay there and the North Shore people stay here. ⁓Dylan Silver (14:40)
Hmm.Edward Carrick (14:41)
But as far as New Orleans itself, I don’t have as much of a pulse on that. But ⁓ I’m seeing things go up here and there. I just feel like there’s a lot more, and I met with a big developer yesterday, commercial. They all seem to be a little more tentative about New Orleans proper.Dylan Silver (15:42)
That’s interesting. That’s interesting. And it could be a number of different reasons, but when we think in general about development, typically development in the center of the city is gonna take more permitting, it’s gonna take a deeper level of trust and rapport with the people in charge in that city versus developing maybe in an area where there’s less going on. ⁓ For folks who are looking at… ⁓getting into, let’s say, single family ground up construction in Louisiana. Are there any markets that you specifically really like or ⁓ are bullish on in particular?
Edward Carrick (16:23)
So.Oddly enough, know, we do and we see a lot of activity in the mobile home park ⁓ space. Not particularly in St. Tammany where I live, but other counties or other parishes that are surrounding. We actually do a lot of wastewater work there and we see a lot of investing and a lot of people who are in that space, you know, buying up other people’s mobile home parks and things like that. I never would have thought I would have said that, but that seems to be something that’s just.
hot right now, maybe just because it’s in my face and on my radar. But there’s that. there’s, uh, as we get farther and farther from where I am, I’m in a subdivision of 200, 300, uh, homes, um, right near the interstate and a major highway. But as you get five, 10 miles north of me, there’s a lot of big houses going up on big parcels. Um,
You know, not in neighborhoods and that’s. I just see that happening. We actually do some work for some developers in that space as well. That seems to be ⁓ up and coming, you know, along with the.
Dylan Silver (17:36)
Would thatbe the level of like farm and ranch or not quite that big?
Edward Carrick (17:41)
⁓ most of are not used for that purpose that I’m seeing. Most of them are used for, you know, single family residences, but they are surrounded by farms and ranches. ⁓ it’s kind of the place I want to end up, you know, we just developed, or helping a guy, a guy develop a 10 acre, ⁓ fully wooded plot of land for a house that he wants to live in for five years and then flip it. ⁓ so we had to do some, drainage studies because there’s an intermittent stream going through it. has to build a driveway over it and different things like that.Dylan Silver (18:12)
Yeah, I mean, when we when we talk about the different types of products that people are doing right now, it does seem to be in places like Louisiana. ⁓ There’s more and more interest in any type of land deals, whether that be, you know, farm and ranch or, you know, mobile home communities. I’ve heard RV parks and self storage and so forth. We are actually coming up on time here, though, Edward, any new projects that you’re working on and then also to what’s the best way for folks to get in contact with you or your team?Edward Carrick (18:41)
We have a couple of websites. ⁓ My primary company is Performance Analysis. So that’s performance analysis, LLC.com. And then ⁓ with Charlie Rick, there’s charlierick.com. ⁓ Both spelled like they sound. As far as the other question was, ⁓ what other projects, ⁓ up and coming projects are we looking at? One thing that we’re getting into a lot, and we thought it was going to be its own little ⁓profit center, it’s own little product, but we’re doing a lot of drone surveying, ⁓ RTK drones at that, ⁓ real-time kinematics, which are centimeter level precision. ⁓ We’re using that a lot as tools on our existing projects rather than their own projects. ⁓ We’re getting to do more than we could do without them, and we’re getting to be better at it with them. ⁓ that’s something that I think is probably going to continue to grow.
⁓ in support of ongoing engineering and construction projects.
Dylan Silver (19:45)
Well, Edward, thank you so much for coming on the show today.
