Friday, October 11, 2013

Chapter 8 Questions



1)      The two main attitudes of developers are to spend money and to take as much risk as possible.
a.       True
b.      False

2)      The difference between productivity analysis and highest and best use is that productivity analysis determines a site’s suitability for a proposed use; whereas highest and best use of a site is the use that results in the greatest productivity.
a.       True
b.      False

3)      Relationships in real estate are not important, especially for developers.
a.       True
b.      False

4)      If a project seems viable to a developer, they should gain control of the site by purchasing it.
a.       True
b.      False

5)      A project’s compatibility with the immediate environment and its impact on neighborhood attractiveness and property values are public concerns that could damage a project’s public support and endanger its feasibility.
a.       True
b.      False

6)      A document issued by the appropriate local government allowing a newly constructed or renovated building is ready for human occupancy is called a ______.
a.       Permit
b.      Certificate of occupancy
c.       Construction loan
d.      Market

7)      An assurance made by a third party stating that the original party will perform according the terms of the contract is a ______.
a.       Bridge loan
b.      Permanent loan
c.       Performance bond
d.      Takeout loan

8)      Ordinances that are instituted by local governments designed to protect the health, safety, and welfare of the public are ______.
a.       Building codes
b.      Asset management
c.       Exclusive options
d.      Permits

 

 

Answers: 1)F   2)T   3)F   4)F   5)T   6)B   7)C   8)A

Chapter 8 Entrepreneurial Activity



1)                                 What are the dynamic process of real estate development? 
A.      Commitment Stages
B.      Precommitment
C.      A & B
D.      None of the above


2)                                    Competitive market:
A.      The economic and location environment in which a particular property competes and trades.
B.      The process of obtaining the necessary government permits to begin and sustain a construction project.
C.      All of the above
D.      None of the above

3)                                        Permitting is a:
A.      The process of obtaining the necessary government permits to begin and sustain a construction project.
B.      C &A
C.      Freehold estates
D.      None of the above




T/F Question:
4)      The management challenge for the construction lender is to make sure that the money released for construction doesn’t run a head of the actual construction.
·         T
·         F

5)      The term “Construction loan” is a short-term loan issued to a developer to fund the construction stage of a project.
.        T
·         F

6)      The final “deal books” for both lender and investor is also called the financing package and the investor package.
·         T
·         F
7)       The purpose of the pre-commitment stage of the development process is to steadily confirm a concept’s likelihood for success.
·         T
·         F
8)      A general contractor is a construction expert who contracts with a developer to construct or to manage the process of construction in real estate improvements.
·         T
·         F

 1C, 2A, 3A, 4T, 5T, 6T, 7T, 8T

Diane Ray – Chapter 8 M/C and T/F Questions


1. The stage of development that occurs before the developer assigns significant funds to the project is referred to what stage?
a. Phase 1
b. Productivity analysis
c. Precommitment
d. Binder

2. What term refers to the type of analysis done to estimate the total demand in a competitive market by a particular property?

a. Marketability study
b. Market analysis
c. Highest and best use analysis

3. The highest and best use analysis is primarily used
a. to evaluate the marketable capacity of a site
b. to find the use resulting in the greatest productivity of the site
c. to determine how many structures can reasonably fit on lot
4. An exclusion option is used for the what purpose?

a. Refine the design and the pro forma
b. Gain control of the site
c. Determine the marketability of a site
d. Perform due diligence

5. Developers take on a high level of risk in pursuit of a low return
a. True
b. False

6. Due diligence is the period in which a developer determines the legal and practical suitability

a. True
b. False


Answers: 1) c, 2) a, 3) b, 4) b, 5) a, 6) a

Wednesday, October 9, 2013

Blog Post 1

I chose to interview my father, who is the President of a commercial contracting corporation. He has experience in buying and developing commercial property as well as building numerous commercial properties. 

How did you get started in this field? 

My father owned a construction company similar to mine but also dealt with residential construction as well. I did not really enjoy working in the residential field because of the difficulty of working with homeowners. They are very passionate about their homes and dealing with their emotional attachment becomes very tedious, so I decided to concentrate on commercial construction.

What was your educational background?

I served my apprenticeship as a plasterer. We would make moldings by hand using plaster. That trade has pretty much died off and is only used when remodeling very old buildings. Eventually I started out on my own and have been ever since.

What is a “typical” day like for you?

A typical day for me consists of responding to emails, talking with material suppliers and organizing and communicating with job foreman to make sure they have everything they need for the day. There is a lot of front end work that  goes into a project that many people do not realize. 

What are some common entry-level positions in the field?

There are two ways to enter the administrative/managerial field of construction. You can go through the trades and learn how to work the tools and eventually make the transition to the office, or you can go to school and get a degree in construction management usually, and then start in the office. 

What kind of salary range and benefits are typical of an entry-level position in this field?

A junior estimator or project administrator can expect to be paid $12-$18/hour starting out, depending on experience.

What are the most important factors used when hiring?

I look at the experience that a potential employee has as well as how aggressive and hard working they are. The construction industry is not easy and you have to be able to deal with some very strong personalities.

How do people usually find out about full-time openings in this field?

Many CM programs have an email list to notify students when a job opportunity is available. Also word of mouth is still a very good way to find a job in this industry. It is all about making connections and networking with other contractors/architects and potential clients.

How do you see jobs changing in the future?

The construction industry is notorious for being old fashioned. There is a big push to use new technology to plan and track projects. I have not had a paper set of plans come across my desk in years. Everything we use is not electronic. This has really sped up the process of bidding jobs.

Blog Post 1

I decided to interview my grandfather Richard Mcpherson an entrepreneur in the tire business in 1981. Growing up in Stockton with a family that promoted working hard for a living will get you far, he started as a tire man just before graduating High school. He bought the company name South Bay tire in Stockton CA. along with the property the company had started at. He faced many struggles that he had to overcome. During his retirement he's been able to enjoy his time with his family and passion for rebuilding classic cars.


1How did you get started in this field?  What was your educational background?  What are your major responsibilities?
In 1959 I worked for Montgomery wards as a tire changer and a seat changer for 2 years. I then became a service manager from 1961- 1964. After hearing how Sako tire was doing i decided that i wanted to work for Chris Percedus (spelling), but that only lasted for about a year and a half. My partner and I decided to opened a tire shop on main street in 1967. After a year and a half in business i decided to sell my partner my part of the company. I decided to return to Montgomery Wards as an outside salesman from 1968- 1978. There was a lot of talk about Doherty tire starting up a forklift shop. I was able to work fo Doherty tire for 3 yrs until they weren't able to make ends meet. South bay tire decided to open up the shop and hired me along with them. After being 6 months in business the pay roll was to high and wasn’t making it. I decided to take over the company in 1981-2003. I bought the property from the Hope Brothers payed it off in about 10 years. Out front of my tire shop I rented out the gas station to a company called CFN.

How did you choose your location?
Montgomery awards, Doherty and South Bay tire were all in the same location, off the 99 freeway on charter way.  Being in that location for so long i was able to meet a lot of customers were i was able to build a strong foundation that would eventually last until my retirement. I was also surrounded by major tractor companies, when their customers needed parts they would also stop in get new tires on occasions.

Were you scared of opening up the shop in the same location? Did you have a new strategy than the other tire companies in that location? Why do you think you made it compared to the other companies in that same location that didn’t?
The customers at Dicks South Bay Tier were the same customers I been doing business with since 1959. I called my customers everyday to make sure they were satisfied and if their was anything else I could help them with. No I didn't feel like I had a different plan or strategy than the other tire companies. I made it because I didn’t need much help, I didn’t need salesmen because I knew all my customers for 20-30 years and was able to make new ones along the way. I was also in a prime location, farmers would dropped off tires or tractors in the am and I was able to fix the problem by the end of the day for the most part. I mentioned before how I was surrounded by all types of tractor companies, the farmers that would come into town for parts, would occasionally stop in for quotes.  Those farmers and tuckers coming off the 99 freeway was how i was able to gain new customers. I did Off road tires, repairing truck tires, tractors, and also went out for service calls.
4
What is the most rewarding aspect of your job, least rewarding?  Would you choose this career again?  
The most rewarding aspect of my job was that it was my way to make a living. Dick’s South Bay Tire got me through life and getting me through retirement. I cant say anything was least rewarding because it was work,maybe the fact that I only had Sundays off and had 6 1-week vacations in 21 years of business.  Healthy or sick I was at the shop working.  In business you have to work, you can’t just trust someone look over the company for you. Being a business owner you have to be there everyday day in and day out. The busy time for me was during tomato season farms working all night long and i would have to go on service calls between the hours of 2 am- 4 am sometimes and this would happen more than once during the year. I didn’t mind my career and I would do it all over again if i had to because in the end it payed off.

What was a “typical” day like for you?
A typical work day would be opening the shop up at 6:30 am and the phones would start ringing and customers coming in. During my lunch break I would eat in my office everyday and sometimes even eat a late lunch because I was so busy. We would typically close up shop at 5:00 pm unless we had work that needed to be finished for our customer.

What obligations does your work put on you outside of the actual job?  What are some lifestyle considerations for this career?
Take care of business you have to be their day in and day out. A business is something that you have to take care of. Some owner may have the freedom to get away with not having to be involved as much such as large corporations, but as a small company business owner only having a maximum of 4 employees  and a minimum of 2 employees at times I couldn’t get away with it. I had to be their to guide and manage them.

What kind of an individual (skills and personality) is best suited for a entry level position?  What are the most important factors used when hiring?
The skillset i looked for in an employee was if they can change tires, if they couldn’t I had to train them. As long as they came into work everyday on time, did their job efficiently, and good to customers then they were a great asset to the company. The #1 factor when hiring was that they had to be good to customers, because customers pay the way.

What have you found to be a major weakness of new hires in this field?
A major weakness that i found in some of the employees that i had hired were some of them couldn’t catch on, they couldn’t change tires or they were to slow and inefficient.

 What is the future outlook for this career?  What are the areas of potential growth and decline?  How do you see jobs changing in the future?
The future for tire companies are being taken over by big corporations coming in and also doing wheel alignments, brakes, and mechanical work. The effect on this is more labor therefore more income. Companies cant make money on tires anymore it’s too competitive. For example a wheel alignment only takes about 15 minutes to do but takes a company to do the job in a hr as well as finding minor parts that need to be replaced. These corporations are making more money on parts and labor than they do on tires.  In Order for me to do this or to compete with these corporation more employees are needed.
1
 Can you recommend other types of organizations in this field that I might investigate or contact?  Can you recommend any specific person for me to talk with and may I have permission to use your name?

1Brandon tire has 2 locations in stockton and they have been in business longer than I have. Brandon started out sweeping the floors at the age of 16 for Doherty tire. Around 1980 i believe he started his own business. Wilson Way tire started 1941 and has a few shops around the state about 5 or 6 in total different name same owner, Madiolly (spelling).

Tuesday, October 8, 2013

Blog Post 1


·   For my interview I chose to interview a Luis Deltoro. He along with his father recently opened an auto body shop, B&M Collision in Oakland CA. They have been successfully running their shop since 2006. Luis is 26 years old and has a vision of building and developing his shop to be as profitable as possible. Currently he has closed escrow on a shop alongside his. He plans on expanding his shop floor increasing the amount of business he currently gets. In the interview he explains the importance of real estate. Personally I think I can learn a lot from him, not only proper office upkeep, but proper business techniques as well.

How did you get started in this field?  What was your educational background?  What are your major responsibilities? 
o   I got in this business, through my father. Through him I was to make great decision, learn from his decisions, and put me in the positions I ma now. My education is real life experience and though my father’s mentorship I was able to start my on auto body shop. My major responsibilities, all paper work, all bills are paid, work on tax’s, customers, negotiations, estimating, and insurance claims.
·      What is the most rewarding aspect of your job, least rewarding?
o   The most rewarding is getting the recognition form a customer of our great customer. To see our customer near tears to see their car restored to better condition is the absolute best feeling that I can explain. The least would have to be a disappointed customer. Knowing that they tare unsatisfied really brings me down.
·      Would you choose this career again?
o   I would. Please me that I am not only successful but benefit other people.
·      In choosing the location of your shop, what did you take into consideration?
o   At our current shop, space was a huge factor; in addition to the prices place a big factor.
·      I know that you are expanding your shop. How do you see the new real estate that you are investing in is going to improving your business?
o   Tremendously! It will change virtually our whole shop attitude. We have added space that has improved our perception. We have noted that our customers feel more relaxed, and with that are more willing to recommend our shop to others. Customers really do enjoy clean, and enjoyable scenery.   
·      What is a “typical” day like for you?
o   I generally walk in and check voice mail messages, speak with father to see what needs to get done throughout the day. We walk through the shop and see where all our employees are with their task, and see where everything is. I then return to the office and handle all my accounting paper work, reviewing what parts were ordered and their statuses. I then work on any insurance claims and estimates and schedule meetings with both customers and insurance angence. Unless I have cars being completed I review all the task and made sure they are moving along, and order parts for the next day.
·      What obligations does your work put on you outside of the actual job?  What are some lifestyle considerations for this career?
o   Being a Business owner, my day rarely ends when the shop doors close. I try to leave the paper work all in the office, but I constantly have the grind of planning my next day; thinking about scheduling appointments with insurance agents, clients, and how to improve my shops functionality. I would say that I have a good relation ship with my customers, so I often have to walk them through the whole claim process, and what the steps are going to be to get their cars fixed. In addition I sometimes have to head to the shop at random hours of the night or weekends when we are close to receive customers cars who have been in an accident.
·      If I were to join your company with the expectation of owning my own shop, what entry-level positions should I look into?
o   Education. I would put you in a position where you would have to do some of the “dirty work”. You have to have a hands on approach, learning how the whole process. Actually learning how long and what is needed for the shop to run. Once you have an idea of the work that is needed, you also have to learn how to interact with customers, and properly do paper work. I would say you have to work your way up from the bottom to trolley understand the business.
·      What kind of salary range and benefits are typical of an entry-level position in this field?
o   It would trolley depend on your experience, but roughly $16-25 an hour.
·      What kind of an individual (skills and personality) is best suited for these entry-level positions?  What are the most important factors used when hiring?   
o   I can’t stress the importance of customer service in this business.  He cant be shy, talkative, confident not necessary energetic, but charismatic. In addition well organized. You also need to be mentally strong, because not everyone you are going to be dealing with is going to agree with you, and not everyone is going to express it in a productive manor.
·      What is the best educational preparation for a career in this filed?  Which classes and experiences would be most helpful to obtain while still in college?
o   The classes I would recommend would be communication classes. In addition any type of phycology class that will help you more or less read body language, which will help ques from customers. This will help greatly in negotiations with both customers and insurance agents. In addition management classes, will help orcistarating a company. Proper writing is also very important. Generally all your business classes will benefit you.
·      How high is the turnover?
o   Profit will be high if you manage your shop correctly. If you are able to run your shop efficiently you will come up. New shops come and go, but the ones that are managed correctly you succeed. Also the better customer service you provide the better recognition you will get, improving your profit.
·      What are typical policies about promotions from within?  How are employees evaluated? 
o   The main way that I evaluate my employees are through there attendance, efficiency, and ability to complete the job properly. Also the ability to interact with customers. Attitude is also very important, coming to work with a good attitude and is ready to go to work. 
·      If I were to looking to start my own auto body shop where would you recommend.
o   Reading a book is only going to get you so far. I recommend working with a shop, learning everything. Diving in, and getting yourself involved in the whole aspect.
·      What is the future outlook for this career?  What are the areas of potential growth and decline?  How do you see jobs changing in the future?
o   The whole industry is constantly changing. Through technology advances we have to develop with them and learn how to follow trends in the auto market. People are always going to be in accidents, and ideally the business should strive.