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Show Summary
In this episode of the Real Estate Pros podcast, host Q Edmonds speaks with Sergey Kesel, a structural engineer with over 30 years of experience in the construction industry. Sergey shares his insights on the current state of the construction industry in North Carolina, highlighting the challenges faced by builders, investors, and homeowners. He discusses the need for reforms in building regulations, the quality of materials used in construction, and the lack of hands-on experience among builders. Sergey emphasizes the importance of addressing these issues to ensure safe and affordable housing for all.
Resources and Links from this show:
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- Investor Fuel Real Estate Mastermind
- Investor Machine Real Estate Lead Generation
- Mike on Facebook
- Mike on Instagram
- Mike on LinkedIn
- Sergey Kesel’s Phone Number: (919) 295-4160
Listen to the Audio Version of this Episode
Investor Fuel Show Transcript:
Sergey Kesel (00:00)
Right now, I worry about my industry because everybody is pulling on agenda and my industry goes south.For example, a years ago, when real estate agents sell ⁓ homes overpriced and everybody paying about $50,000, nobody complained. Now, now homes hit like a crisis because if you see quality very bad, and what it is, if you’re talking about our value, ⁓ and between you and our side, it’s only…
R13 or R15 insulation, half inch OSB or plywood, moisture barrier and vinyl siding and maybe hardy planks. And and everybody worry about mold and other problems. You know, we supposed to create reforms and change whole industry. Look at Western North Carolina, also out of bank, you know, houses swimming away, houses just destroyed.
Quentin (02:37)
Hello everyone. Welcome to the Real Estate Pros podcast. I am your host, Q Edmonds. excited today, excited to have someone on today that has 30 years of experience when it comes to being a construction and a builder. This guy is a structural engineer. He knows what he’s doing. He knows how to build. He know how to build things to make it safe. And I’m just excited for you guys to get a chance to just listen tohow he does what he do, of course, peeking through his lens, through his experience. And so I want to introduce you to Mr. Sergey Kesel Mr. Sergey, how you doing today?
Sergey Kesel (03:17)
Okay, fine. Thank you for having me.Quentin (03:18)
Absolutely, man. Thank you for being on, man. And so listen, like I said, you know, I want you to take us into your world. I want to see things through your lens. And so tell us, you know, what is your mainly focus on these days? And you want to tell us a quick origin story about how you got started. I’ll leave that up to you. We love origin stories. And so if you want to tell a little bit of how you got started here in United States and then also where you’re located. So.Listen, the floor is yours, Mr. Sergey. Take us into the construction and the building work.
Sergey Kesel (03:51)
I’m located in Raleigh, North Carolina. Before I moved to Raleigh, North Carolina about 18 years ago, I used to be a custom home builder in the of Michigan. And it’s a huge difference between Midwestern South. And wellRight now, I worry about my industry because everybody is pulling on agenda and my industry goes south.
For example, a years ago, when real estate agents sell homes overpriced and everybody paying about $50,000, nobody complained. Now, now homes hit like a crisis because if you see quality very bad, and what it is, if you’re talking about our value, and between you and our side, it’s only…
R13 or R15 insulation, half inch OSB or plywood, moisture barrier and vinyl siding and maybe hardy planks. And and everybody worry about mold and other problems. You know, we supposed to create reforms and change whole industry. Look at Western North Carolina, also out of bank, you know, houses swimming away, houses just destroyed.
And and
When I talk to legislators, they don’t want to do nothing about it. They even block my phone number and threaten to arrest me. If I show up in the legislature and try to bring some concern about my industry. And also, somehow in North Carolina, used to be governor appointed people managing my industry because they represent the government. Right now, Builder Association and Real Estate Association took over.
and they go straight to legislator, and by the way, they sponsor the same legislators, and create the problems, and people like me with individual license can’t even have a voice. It’s supposed to be stopped. Licensing board, if I talk to licensing board about problem, because I have a couple of speeches over there, and they shifted to legislator. Legislator don’t want to answer any questions, they call security. If I have a…
Quentin (06:59)
Hmm.Sergey Kesel (07:00)
If I have a building committee, it’s my right as a licensed builder to talk to my committee and solve any problem if I have some input. No chance in North Carolina. If you compare at the same time Midwest, Michigan, I used to live in Kigaharbor, Michigan. And what it is, used to have a structural engineer. If you have any questions, homeowner, builder, investor, anybody can come in and have any ideas.you working on design also ideas and structure engineer help you out and no question ask if somebody wanna build something no problem he have appointment with a structural engineer structural engineer give some inputs give some ideas and no problem on inspection and you move forward with your project right now no structural engineer nobody to talk to
Quentin (07:55)
Yeah.Sergey Kesel (07:59)
It’s a big changes because looklike structural engineering very expensive and I worry about my industry. Also, I’m a small investor. I have a few properties and sometime I discovered so many problems. If we want to fix it right way, it cost you money. And also, ⁓ city try to give a hardship to builder, homeowner and investors big time because
Quentin (08:09)
Mm-hmm.Yeah.
Sergey Kesel (08:28)
because inspector, inspector, what he can do, he can stop your project without any reason. If you ask him questions, if you questions, he don’t have enough knowledge to explain to you, but he have a lot of power to go after you. And well, I guess, you know, for money used to be very balanced. Houses used to be affordable. When I moved to North Carolina long time ago, you can buy a house for…Quentin (08:35)
Yeah.Yeah. Yeah.
Sergey Kesel (08:57)
maybe like 20, 25,000. If you’re calculating, you can do return on investment during three, five years because houses are cheap, you invest some money. and after after you finish your, for example, after your investment, you have return on investment and your house can be paid off. Your investment can be paid off during five years. After five years, you can have a clear profit. Right now, house is so expensive.Quentin (09:00)
Yeah.Yeah.
Yeah.
Sergey Kesel (09:25)
Same junkie houses, so expensive you can’t even afford, which is like a… ⁓ I don’t even know how these houses can be appraised for value up. Because right now houses go down, depreciate and rotten, material very bad, and the city appraisal appraised houses so high and bring costs up, which makes difficult for homeowners, investors and builders to move forward.Quentin (09:34)
Yeah.Yeah.
Yeah,
yeah, yeah. No, I hear you, man. I know things are not like they used to be. ⁓ The materials that people used to build is not like how it used to be. And so I hear you and I’m glad that you’re talking about this and giving a voice to it. I want you to take us deeper into the mind of a builder. You you have 30 years of experience, so I know you’ve built a lot of different things.
I want to know, there moments when things got real? Maybe when things went sideways, maybe when the building wasn’t going the way you expected it to go. Are there stories like that in your your experience of times when something went sideways and you had to fast?
Sergey Kesel (11:13)
I can tell you what is the problem right now. In North Carolina used to be $30,000 no license, no knowledge, no continued education. While, for example, state of Michigan, they have a maintenance alteration license. Without license you can do it project in Michigan, $600 material included. If you want to be a macho man, you’re supposed to pass maintenance alteration license. In North Carolina…$30,000, no license, no knowledge, nothing, no continued education. And a couple years ago, know, legislators upgrade up to $40,000. Same time, they make it continued education for builders every year, while code and regulation change every six years. Pretty much they’re builders for five years.
Why is it? And also, also, licensed board for general contractor, they told me they’re not lobbying any law. But guess what? During COVID time, they’re lobbying law, they’re lobbying law because they want to have extra income, that’s why continue education on the spot. For example, if I sit on continue education, I have a 30 plus years experience with the beginners. What do you can tell me?
You know, look, nothing new, it’s a wasting time. If you want a real law and same time people work under $40,000, no continued education, no liability, no knowledge, nothing. It creates like a big, big, big problem. Also, I can tell you, in North Carolina, builders don’t have any hands-on experience. They have a seminar only one day, one day seminar and also…
Quentin (12:46)
Yeah, yeah.Yeah.
Sergey Kesel (13:02)
Builders supposed to study on his own. It’s not McDonald’s drive by. In one day, you can be just genius and know construction. I can tell you that one. In Soviet Union, spent ⁓ four years study construction. also, when they moved to United States in 1987, 88, because I left 87. And what it is, ⁓ first I started with a field. ⁓Quentin (13:07)
That’s me.Yeah.
Mm-hmm.
Sergey Kesel (13:31)
hands-on experience on the field. I supposed to spend couple thousand hours before application for exam, have a field experience. In North Carolina, it’s zero. And right now, we have two type of scammers. A scammer who work under $40,000 and legal scammer who represent a builder who only have a one-day seminar, no hands-on experience, and state gives them a license scamming people.Quentin (13:40)
Yeah.Wow.
Sergey Kesel (14:00)
How far we can go on this? And nobody want to listen to the problem. Nobody want to create reforms, you know, because North Carolina is ruined right now. Western North Carolina have a problem. No houses swimming away. Out of bank on the shore, houses just fall apart. For one month, we actually lose 17 houses. Just fall down, that’s it. You know, like, and when I talk to…Quentin (14:00)
Yeah.Yeah.
Sergey Kesel (14:28)
When I try to visit the legislator, I don’t want to mention name and everybody knows him. And by the way, he only have a limited residential license, which is expired in 2014. And all legislator pray on him, only residential, by the way. I have a commercial, residential and industrial unlimited license. He have a limited license. And everybody pray on him. And he told me, we need something major in North Carolina before we consider moving forward.Western North Carolina come, a lot of people die, a lot of people lost houses and nothing happened. Do you know why? Because they don’t know what to do. Because I already have like a reform list, I try to submit it to lot of legislators, try to set up appointments. They block my phone number, try to arrest me and also nothing done for people.
Quentin (15:05)
Yeah.Bro.
Yeah, yeah. Now I hear you, man. And again, I’m so glad you’re bringing light to this. So Mr. Sergey let me ask you, what’s next? Like, what’s the next real goal for you? What are you looking to accomplish,
Sergey Kesel (16:11)
I’m looking for accomplish. I hope we will have a reform in North Carolina. And what it is, I was lucky because I bought my property, investment property, reasonable chip. Since I don’t need any inspections, I don’t need any structural engineer, I don’t need any extra expert like another investor supposed to have. I can give an offer on the spot and moving forward.But a lot of people just can’t do that. And I hope like a real estate and builder association lobbyist pushing regulation which is blocking investors, builders and homeowners. Because homeowners are responsible for everything, and investors as well, and builders as well as well. And we need some reforms. And I can tell a couple years ago, a legislator approved new grow lumber.
It means a long time ago they harvesting lumber supposed to be 50 years old and lumber is mature and strong. Right now they harvesting lumber only 20 years old and ring inside the lumber not strong enough to hold even nails. It’s a junk lumber and you can’t even offer quality service if you don’t have a good material to work with.
Quentin (17:22)
Yeah.Yeah, yeah. No, I definitely hear you. You’re right. The material is everything. If you don’t got good material to work with, and especially you as a builder, I know you don’t want to build with no crappy materials. So I definitely hear you. Let me ask you this. What kind of relationships have you formed? Do you have any allies that is fighting with you when they’re going against a legislation and the different things that you’re going against? Do you have any kind of allies that’s fighting with you?
Sergey Kesel (18:03)
I can find nobody. The problem is, I already told you before, builders only study one day in North Carolina. Inspectors are pretty much in the same boat. Only builders whom I can talk about, problem and issue, who come over from another state, have a license from North Carolina and another state, they study, they discipline, they have a hands-on experience, completely different program, because some state like Florida, Michigan, New York,Quentin (18:12)
Yeah.Sergey Kesel (18:33)
have own building exam and programs. In North Carolina, under umbrella, and actually North Carolina exams built in California. California, what have to do with North Carolina? We supposed to make a reform like Florida. For Florida, only took months and a half for reforms after hurricane. North Carolina, we have like a…Quentin (18:36)
Yeah, yeah.Sergey Kesel (19:03)
Hurricane Helen and a lot of homes destroyed and still no reform. Do know why? Because no knowledge. Legislators don’t know what to do and builders’ knowledge is so limited, they don’t even know how to solve the problem and moving forward. Well, when I talk to some local builders, they turn around and go away. Same with inspectors because they can’t keep up on professional level communication. This is the biggest problem.Quentin (19:29)
Yeah.Sergey Kesel (19:30)
And we stillQuentin (19:31)
Yeah.Sergey Kesel (19:31)
build this 2×4 and OSB junk material and save for top dollars. Now houses so high, it’s unaffordable. I believe it’s a scam. It’s supposed to be under control. We have alternative material, but problem is builder never study all of this. Builder don’t know how to design. And also if you want affordable houses, I can give you advice from experience. You’re supposed to include cheap alternative material in the code book.and builders supposed to study this material and after that, yes, houses can be affordable, not 2×4 and OSB which is cost right now, stick build framing, about $300 per square foot. It can be like $30 per square foot, $40 per square foot. Only problem is builder never study, they don’t know how to use it, that why we can move with the progress because actually lobbyists hold the progress.
Quentin (20:16)
Well.Yeah, yeah. ⁓
Sergey Kesel (20:29)
because they only pushingfor example junk material for example OSB is not even structural component but everybody sell it if you go to Home Depot and Loaves you can even find sometime even problem to find plywood everybody sell OSB but it is not structural component if you want to change for something good for example masonry ICF blocks M2 system Vero system
Quentin (20:44)
Mmm.Yeah.
Sergey Kesel (20:57)
You know, talking about like ICF blocks and concrete. It’s a good system and everything. But the problem is some company who sell junk supposed to be out of business. And for a company who sell a junk, better to bribe a lobbyist and move on with the product than, you know, give up and admit it. Yes, we sell a junk we have to do something about. It’s just from my honest opinion, we’re stuck in because people lazy moving.Quentin (21:07)
Yeah.Yeah.
Yeah.
Sergey Kesel (21:27)
moving and fight for own rights.Quentin (21:30)
Absolutely. Absolutely. Now I hear you, man. Again, I’m so glad you’re here talking about this. Thank you for coming through and giving voice to the issues and the concerns. Listen, before we wrap, if someone wanted to reach out to you, connect with you, maybe learn more about what you’re doing, how can they reach out to you, Mr. SergeySergey Kesel (21:48)
Yes, my phone number is 919-295-4160. I’m not a lobbyist. I try to fight for homeowner rights and for kids’ future. Make sure home prices can be under control and when you pay for something, if you want actually a leather bag, nobody sells you garbage bag for the same price as a leather bag. You know, it’s supposed to be…Quentin (22:15)
Yeah.Sergey Kesel (22:17)
Take under control, supposed to be reform, supposed to be quality building materials. If you pay for something, make sure it’s worth it. And price is supposed to be under control. And we desperately need construction reform and give it to my industry, to governor appointed people who have on the board structural engineer, have a architect, commercial and residential builder. Right now, legislator.Quentin (22:22)
Yeah.Yeah.
Sergey Kesel (22:46)
Maybe somebody have a residential license, but they’re not structural engineers. If you bring like a topic, professional topic, they don’t even know how to solve a problem. That’s we can move on the progress because lack of knowledge. And yeah, absolutely, it’s a lot of issues, I can tell you, and we have to solve it.Quentin (23:01)
Yeah. Yep.Yeah. Yeah.
Yeah. Well, listen again, Mr. Sergey. Thank you, sir. Thank you for coming through. Thank you for sharing. Thank you for your perspective. I’m sure someone that’s listening to this is going to take value from it and maybe even reach out to see what, what the difference that they can make and kind of help join in with the fight. so Mr. Sergey, man, I thank you. Thank you so much for being here today. Okay.
Sergey Kesel (23:29)
Any time if somebody want to reach me, you know, I have a lot of information I have I investigated this issue for three years And I can be input. It’s affect all United States not only Michigan or North Carolina because everybody live somewhere It doesn’t matter your political view. It doesn’t be because everybody live somewhere. We need like a take homes and quality under controlQuentin (23:55)
Absolutely, absolutely. Well, listen, there he is, Mr. Sergey. Thank you so much again for being here. And listen, everyone else, listen, you’ve heard it. You got valued out of this conversation. And if you have, just go ahead and subscribe. That way you will not miss people that we bring on. just giving us great value, great content. So again, thank you, Mr. Sergey. Really appreciate you. And to everyone else, we will see you on the next time. -
