June 14, 2022
Joe Fairless

JF2842: How to Thrive as a Developer in California ft. Bryan Underwood


San Diego native Bryan Underwood grew up learning the ins and outs of self-storage from his family. After honing his acquisitions, entitlements, and property due diligence skills, he went on the start Responsible Real Estate, which develops residential projects in both the single-family and multifamily asset classes. In this episode, Bryan discusses his biggest learning curve in residential development, what he looks for in a project manager, and what it takes to thrive in the San Diego market.

 

1. His Biggest Learning Curve

For a recent townhome project, Bryan set out to hire a contractor who would invest alongside him in the deal. However, he ended up hiring a contractor who didn’t invest. The contract had a guaranteed maximum price, and it had an outside date. The project that should have taken no more than 12 months is now on month 16. It is costing him $5K per day to continue to carry out, but Bryan says, on the bright side, he’s learned what to do in the future: “I would go out and pay a really big salary to the best project manager, the best superintendent that has this hybrid skillset,” he says. “I could pay them $250K a year, and I would have saved hundreds of thousands of dollars on my project.”

 

2. What He Looks for in a Project Manager

So, what does Bryan look for in a project manager? “There’s this sort of attitude on the construction site that everybody points fingers, and I want to change that,” he says. “ I want to bring the person on my team that can change that attitude.” He says his priority is to find someone who can admit when they have made a mistake, take ownership of it,  and correct it immediately. 

 

3. What It Takes to Thrive in California

Although many investors say it’s more difficult to invest in California due to lack of cash flow and heavy regulation, Bryan embraces the challenges. “The regulation is an extreme challenge, which … if you can understand it and navigate it, that’s where I can get in and create some massive value for our investors,” he says. While the barrier to entry in the market is high, there are profitable opportunities available to those with the expertise to surpass it. 

 

Bryan Underwood | Real Estate Background

  • President of Responsible Real Estate, Inc., which sources investment opportunities, entitles land, raises capital, performs property due diligence, and develops residential projects.
  • Portfolio:
    • GP of:
      • 109 units between two development properties and one value-add property
      • 10 townhomes
    • LP of:
      • 15 self-storage facilities
  • Based in: San Diego, CA
  • Say hi to him at:
  • Best Ever Book: The Bible
  • Greatest lesson: Surround yourself with great people.

 

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