Episode 41 - Self-performing Construction Jobs and San Diego Building Permits with Dagan Koffler

Episode #41 Dagan Koffler | Dagan Design & Construction

Dagan Koffler discusses his journey starting multiple construction and design companies in California, detailing the challenges of permitting and building in the state. He explains how he has grown his businesses over the years through self-performing work and leveraging existing relationships. Koffler also shares insights on managing a large team, improving client service, and strategies for self-education.

Listen to the full episode:

About Dagan Koffler

Dagan Koffler established Dagan Design & Construction Inc. in 2012, focusing on luxury home renovations and custom homes in the coastal towns of North County of San Diego. DDC has established a team that all share the same passion and drive to create the highest quality homes.

Resources:

• Website:

  www.dagandesignconstruction.com

• Transcript

  .Mark D. Williams<br> 0:03

  Okay. Welcome to curious builder Podcast. I'm Mark Williams, your host today I'm joined with Dagon Koffler from dig in design out in California. Welcome to you.

  Dagan Koffler 0:14

  Thank you. Thanks for having me.

  Mark D. Williams<br> 0:16

  All right, I'm pretty excited. So the last I suppose 30 episodes, everything has basically been in Studio, you are officially the first curious builder. From out state, I think the goal is to do even odd even to be in state Minnesota and out state will be the odd ball. So you get to be my first oddball day again. Sweet. I'll take it. All right. Well, obviously in Minnesota, I'm guessing most people don't know who you are. Worldwide, you have a massive following everyone knows who you are. But why don't you tell us a little bit about your company, you're in Southern California and just give us a little brief intro on what you do and who you are. And we'll go from there. Sure.

  Dagan Koffler 0:52

  So I'm taking Koffler owner of diggin design construction. We have a couple of sister companies to DVC landscape, DDC knacks, and then DDC and Co. But the construction side is, you know, biggest following as far as Instagram and social media is and things. It's the bigger of the all the companies. Yeah, we're been transitioned into predominantly design build firms. So we have in house designers, and we have an architect that works with us, as our in house guy. We still take on projects where it's outside architect and designer. But we've sort of seen that design build, especially with our complications, as far as permitting things is the fastest way to get things done. And it seems to be a desired path that clients want. So over the years, we've sort of developed what streamlines the system, because it's a chaotic system here. And I think we can talk about that at some point, just how difficult it is to build here. So we've just sort of figured out what works best and how to get clients to the finish line fastest because we had a lot of burn out here. Yeah,

  Mark D. Williams<br> 1:56

  so maybe I'll hijack my own interview right away, because I will start with the end of the beginning. So you have three companies, right? So you have four, really, four. So you've got construction, you've got landscaping, you've got service, what's the fourth one? It's

  Dagan Koffler 2:10

  actually an import company. So we sell furniture from Columbia. And so it's an import company.

  Mark D. Williams<br> 2:16

  All right, we got a lot to unpack here. Okay, first of all, how do you balance? How big is your team? How in the world? Do you bounce four separate companies? And then let's go back to the beginning. And why did you keep adding companies? Yeah, it's all

  Dagan Koffler 2:28

  been kind of an evolution. So the first branch was the landscape side. And that was really because we were doing a lot of estates, you know, where there was a fairly substantial landscape project on the as well as the House side. And over time, I noticed that we're sort of managing that, but it was hard to get a management fee. So we just sort of were doing a lot of free work. And then I always give the example like, you know, like the landscaper would say, well, I need all these trenches dug and I'll lay the pipe. So I was like, well, I already did 80% of the job. So why don't I just do the rest of it. So that's sort of like the evolution of how it happened. And then landscapes a little more controllable, too, because we do we do almost 100% in house, so I don't have to really subcontract anything. So we fluctuate between about 10, up to 15 to 17. Guys on that side. On the upside on landscape side. Yeah, so usually when we're renting, usually two crews that are somewhere between four and six people each. And we can sell perform pretty much everything. So they're great. So we can take on large projects where it's an acre, two acre property with you know, pool and massive amounts of grass and you know, retaining walls and things. And we do a lot of these sort of compact bath backyards where it's, you know, the really cool outdoor kitchen firepit grass area, something for the kids, you know, there's little nice little spots.

  Mark D. Williams<br> 3:47

  So how did you when you started, did you you started with landscape first?

  Dagan Koffler 3:52

  No construction. Yeah, so we were always doing the house and then the landscapers would come in. Yeah. And then we would just how many?

  Mark D. Williams<br> 3:59

  How many years? Were you in construction before you added the landscaping?

  Dagan Koffler 4:04

  So I started doing some of it on site probably five years ago. And then I've had my so actually, you have to get a second license for landscape here in California. So I went and took the test again. And so I branched off the two companies so there to two different s corpse. So it's actually a full separate company now. So that was three years ago, two years ago now. It was a full separate company.

  Mark D. Williams<br> 4:27

  And you get you started what 2012? I think I read on your website. So basically your business for about 11 years already. Correct. Wow, that one real fast. Yeah. So the landscaping piece I mean, that makes sense. from at least from a cohesion standpoint. When you started your construction company. Were you immediately in design build from the very beginning? Yeah, on

  Dagan Koffler 4:50

  a much like smaller scales. I kind of went through like an evolution when I was just by myself doing little stuff. I would hand sketch and I would do little bathroom remodels and things like that. And then I kind of went The opposite where I was, you know, mainly working for outside architects and designers, those are sort of the bigger first projects I got. And then as the world of permitting here got harder and harder and harder, we've sort of seen how difficult it was to have all these parties involved. And no one was really the quarterback, all of it. So we sort of took that initiative and said, Well, what's the best way to get the client from like, you know, their initial design, thought process, whatever, to this home, to actually getting it approved by cities, which is it's very challenging thing here. So the design in house also helps our construction side, get plans quicker. So we're moving things along quicker versus getting a design package, you know, telling a client bidding it out, and it's way too much and no one's been talking. So we found that we lose a lot of projects or project never got built, because an architect designer designed something that's wasn't affordable. So we figured that there was a way to sort of help combat that.

  Mark D. Williams<br> 5:55

  When you first started, how big was your team?

  Dagan Koffler 5:59

  Me? I was I was on my own for five, six years. Yeah, I didn't have my first employee till

  Mark D. Williams<br> 6:07

  Did you have an architecture background? Then at that time? Or how did you even do your own design? No,

  Dagan Koffler 6:10

  I came from like, I've had a colleague and I used to design like furniture and build it really small scale custom furniture, high end stuff. So I would I would hand sketch I was pretty decent at drawing. And on my first handful actually would do, I used to draw, I did like, I want to say two to four, hand sketched all I actually did the whole permit set by hand. So small, little remodels. So I was able to do that at some point in time. And then you know, as you can't really do that at scale, so I you know, I had to figure out new avenues to have people that had CAD experienced or all that. So it was just, it was an evolution, you know, I started, you know, design work, so I knew what to do and how to look for it. And I buy, you know, taught myself CAD, I probably could still be doing that. But I found that my time was more valuable elsewhere. So I figured out that skill to use for those jobs.

  Mark D. Williams<br> 6:56

  So over the last, let's say, well, 11 years of construction anyway, walk me through the maturation of your team building on the construction side. So it was first you how many years till your second employee who was at what did they do? And I guess walk us through kind of, because what's your current team at right now for just the construction? The

  Dagan Koffler 7:13

  construction side, six, six back a house and we think we have fluctuates between 10 and 15. In the field. So 1516?

  Mark D. Williams<br> 7:22

  Yeah, so right now we're 30 between the two companies for those counting. That's a lot. Okay, so Alright, so what Yeah, walk me through that, how many years? I think What's always interesting to me is scale. I mean, for comparison, I mean, I'm a small custom home builder, we do, you know, for high end homes a year and a handful of remodels. And we're a team of five, and I don't think I personally have navigated scale very well. So I'm very interested in how you answer this of like, you know, I've heard before, like, we're at roughly, let's say, eight to 10, or eight to 12 million revenue, depending if we have a few big homes in there. And I'm sure it costs are less in Minnesota than they are in California. That's probably two projects for you. But anyway, the point of it is, is like I've kind of heard that between like 12 and 20 million is kind of like a graveyard of scalability. Yeah. A did you find that to be true? And how did you navigate that as you built your team over the years for the construction company only?

  Dagan Koffler 8:11

  Yeah, so we kind of pivoted, we started to do more self performing. So you know, when you're, when you're thinking of a revenue, it's not always just like a $3 million project, get you exactly whatever you want to be your margin pull percent margin, when you're doing self performing, your margins are different, because you're trying to make money off of each one of your employees, versus just a straight, you know, whatever you're charging 20% on, on cost plus, so guys that just Do you know, subcontract and 100%, their their profit and loss looks a lot different than ours. And our costs look a lot different. So we can take on a $2 million remodel and our margin should be different than a straight subcontract. Rossi taken on a lot of risk. And we're doing a lot of other things to do that. But I've, I found that I liked that control. And I liked that, you know, I've 10 guys with a bunch of trucks, we can go get stuff done immediately, really quickly. Like you need a house demo tomorrow I can get to be a human and a bunch of guys. Yeah.

  Mark D. Williams<br> 9:11

  So you like the flexibility and the risk, if you will to do what you want. When you want you feel like you can basically manage the economics of your own team and your own, let's say pipeline of work better than you could by subcontracting everything. Yeah,

  Dagan Koffler 9:27

  and part of it is, you know, goes back to like sort of our permitting we it's almost impossible to plan because we could it could be years before we get a permit. So I you know, I'm still currently I think we're with to two projects. It's been over a year and a half. And they're not started yet. So it's almost impossible like if I could say sure like one of them starting in April, one of them starting in June and one of them starting very well. It's it's impossible here. So we have to be really flexible and just keep guys moving. So we take on, we usually have like, you know, two to four, two to five bigger projects for last remodels, additions. tons. And then we take out a bunch of little stuff, you know, like we're just constantly moving because we have that big of staff, you just got it, you got to have a lot of work. So it's not as it's not as finite as some of these custom builders that get, you know, I'd love to say like, Oh, I did three, three buildings a year. And that's it. And I can keep this nice, perfect staff. And it sounds great.

  Mark D. Williams<br> 10:19

  So, I mean, that's super interesting. That was one of my questions later. I mean, I get I actually just literally walked up here, I was doing a bid presentation to a couple, let it be on record. That is the first builder who's ever basically left a contract meaning cuz he had to go host a podcast. It's like, it's like, I was like, Guys, we gotta wrap this up, you got to sign on the dotted line. I didn't tell him what I was going to do. I just said I had a meeting. But anyway, my I guess my question in here is, you know, I get bent out of shape. If a contract if a permit takes longer than 30 to 45 days and Minnesota. You know, we have really quick turnarounds. Now if I have to do like, obviously variance work, that's three months, if I have to get like, you know, our, you know, I don't know, lakes and DNR and things like that, then it takes a couple of months. But by and large, our permit process is really fast, and I get frustrated. How on earth? Are you able to even work with a process that's a year and a half to two years for a permit? How do you mentally handle something like that, or

  Dagan Koffler 11:14

  it's really challenging, and that's why we have like a burnout phase, because your clients buy a pretty expensive home, and then they want to know what they can do to it. And then it's so limited here what you can and can't do, you're like, uh, you know, I always say you have to have like a PhD and like, you know, San Diego permitting, because it's so complicated. And it's so finite what you can and can't do. So most people buy a home, and they really have no idea what they can or can't do. They may have come from a different market with like, oh, yeah, you know, I had a, we tore this down, and we're able to rebuild in six months. You won't even get an architect signed on in six months, you know, we're not submitting for 12 months here at the very earliest, and then you've probably got a year and a half and permitting after that.

  Mark D. Williams<br> 11:56

  So walk me through how does that even work? I mean, I assume you're handling some form of pre construction retainer or agreement? Because I mean, two things here. One is how do you keep the client interested and not the client themselves burning out? And then to how are you making sure that your time is being rewarded? Because I mean, you're either putting resources aside, or you obviously have some time invested? Yep,

  Dagan Koffler 12:19

  we do a pre construction now, almost on every project, we won't, we won't really go past that initial meeting unless we get to pre construction. And what

  Mark D. Williams<br> 12:29

  let's say you're doing a two or $3 million job. I mean, you haven't even done an architect at this point, you haven't designed it, you haven't bid it. I mean, how are you even knowing what to collect? How does the client even so we,

  Dagan Koffler 12:40

  we kind of, we're pretty good at numbers, because we've done this long enough. So we we take initial meeting, try to understand the scope of work, whether it's, you know, a large, you know, remodel edition, and we we can, we can give a half million dollar range. So we think it's 2.5 to $3 million project or two to 2.5, we'll give them that range. And then we usually do about roughly we call it loosely 1%, of what we think the construction cost is, that's our pre construction. So if it's 2 million, we're going to we're going to take 20,000, which is going to be you know, to cover our time to get us through to the permit to get ready for construction. And

  Mark D. Williams<br> 13:16

  then you do just Bill hourly against that, or how do you charge as a flat fee, you know,

  Dagan Koffler 13:19

  we used to try to do that, it's, the whole goal is just to like gain trust, and to really just to cover our time. So, you know, we usually do, we'll build it into two phases. So one up front, and one when whatever the receivables meant to be when we have a design package, or if we have a permit in hand, whatever that receivable is to get going. It's really just, it's not a lot of money and the scale of what the project is, it's really just like, you know, our time is valuable, we're here to get you to that finish line, tell us what, you know, this is a little bit of money to cover our management, and we put the money towards the construction costs, and we do it so it's part of our management fee. So it's not like it's wasted money. It's you know, it's, it's part it's,

  Mark D. Williams<br> 13:56

  so that's interesting. So correct me if I'm wrong. I was at a was at the contractor coalition a couple of years ago, or a year and a half ago, and I used to design all my design contracts that way, if I was doing a $2 million build, let's just use your analogy. And I would do $20,000 down. And I used to always kind of use it as a selling tool that if you sign on with me, at least for this, it's $20,000 down and I will I will give you that 20,000 towards the future build of your house, assuming we get there. I always thought I had to do that. The last year I have not I've changed my contracts, that that is essentially a flat rate. And that is you know that as for our time, because if you get the build, you have essentially done that work for free. I mean, you've done that, let's say year, year and a half, or that's how I've looked at it now and the client, I think accept that. I think it's I used to think I had to do that as sort of a loss leader or like a marketing tool, but I found that as long as I explain it, I don't know, I guess why not? I mean, would you ever consider keeping that 20,000 as separate like that? Was your pre construction it was a year and a half of your time on some of these, you should be paid for any sort of AR, but why not? Why not keep that for yourself? And then the contract when it happens is like its whole, its whole separate thing. We'll

  Dagan Koffler 15:11

  separate. Yeah, I agree, the main thought process of why we charge it and make it go towards the project has because we obviously want to do the project. I think we've had one preconstruction in the last three years that didn't actually do the project with us, which, you know, we got to keep the money that we put in time there. So it wasn't like it was lost. I think I would just feel super cheated. If I spent a year of doing this without a fee. And then they went, you know, were like, I don't really like your contract or something. And then they went to another cotton, you know, then I felt pretty cheated on that. So I think it just keeps everyone honest. And I think I like your idea, I'd love to keep it as a separate because it's a lot of work.

  Mark D. Williams<br> 15:49

  It is a lot of work. And I think it's I think it's valuating your own time, because I was like you and I still have a hard time even articulating because I still I still think I think like you it's only because I've been told like, Hey, you're doing something for free, you really should charge for your time. Because think about at least the way I do pre construction, because I don't have any of these people in house. Like you know, I'll bring on an architect, I'll bring on a designer. And my role in the company is I do most of the sales. And I'm kind of the armchair quarterback, I actually don't throw a ball, but I tell the quarterback to throw the ball sometimes American X love me. So but anyway, the point is, is like, you know, I'm kind of getting in their design space. But I mean, it's a ton of time. And, you know, obviously, if I do a variance or something like that, I'll charge more, you know, if I have to do a bunch of various, various proposals, but I mean, it's just a lot of time, and it's me, the owner of the company doing it, versus one of my people. So I feel like that is a good enough story that I can sell that like, Hey, if you want my time, especially in this planning phase over the first six months, like I need to be compensated on some portion of it. If anything, not listening to myself talk I maybe I should charge more, because I'm already thinking about all the time I have invested here. No,

  Dagan Koffler 16:50

  I honestly I always think we're under charging. And I again, it's kind of just like establishing the trust, like you need us there for that preconstruction need for feasibility you need, you know, to keep the budget in check. We're the only people that really can do that. So, yeah, I think we're pretty valuable. And were sort of, you know, we have to be there for the project, otherwise, it doesn't happen. So yeah, I think you probably could charge more again, it's, I think it's just a weighing cost benefit of if I go too high, does it feel like they would need to pay us this premium just to be there. And the whole goal is obviously to get the project and come to a budget that works for everyone. So, but I I do like because you know, it is a lot of work and we end up the hours we put in usually is not covered by the fee. And it would only really makes sense if we get the project. And like I said, we've only not done one project that we we did a pre construction on. So but you know, it probably is equates to whatever half a percent margin for the whole project. So it's not nothing, right.

  Mark D. Williams<br> 17:51

  I mean, I think that's one of the benefits of listening to other podcasts and listening to other people. It's like I only I mean, I've been building for 20 years, and I just learned that like eight, nine months ago. I'm like, Oh, man. So I've sort of 19 Do you ever get bummed out bummed out about that stuff? Like I Sure. I've talked about this on the podcast recently. And I think there's some huge benefits if you had a you know, whether you came from corporate or you came from some other business background, and I'm gonna keep sounding like an idiot because I feel like an idiot. But I only learned the difference between markup and margin like a year ago, and I am so I'm still so angry. I'm like waiting. So like, I've been leaving like 3% markup for 21 years. I don't know that's like the millions of dollars that's honestly not as I know, I'm still in a grieving I need therapy process of like, how did nobody explained this to me? So anyway?

  Dagan Koffler 18:38

  Yeah, it's an evolution week because we bill for all of our guys and it's really hard to like share information. What would you guys charge for finished carpenters? If you if you have them in house? What do you charge for design work? What do you charge for? You know, if you have a plumber in house, so it is really challenging. I'm now part of the builder 20 group. And it's been you know, super helpful, because those guys share all of their numbers and they're from different markets. So it's really interesting to see like, Oh, that guy's charging 95 an hour for Oh, well. Why don't we Why don't we do that? Sounds good. I

  Mark D. Williams<br> 19:09

  mean, you bring up a good point. I it for instance, like in I've heard we have Chris Anderson on for a month and about five, six episodes. And he's basically a bookkeeper for builders across the country. And he had just kind of said, and it actually oddly enough, his episode is one of the most popular episodes on our show. How that was all he didn't have to talk about specific builders, because some builders don't like to talk about margin markup of their own. But I think you know, obviously you and I don't compete against each other because you're in California and Minnesota, but like yeah, I guess the point is, is like his deals like across the country, he said it kind of ironed out let people should be hitting about 20% gross margin that maybe 10% overhead and 10% profit. And it was interesting to hear him talk about that because like here locally, you know, I think in everyone, this is where the numbers on the sworn construction statement gets so interesting, right? Like I might charge a client 13 Let's say 15% for it GCC, maybe its markup, maybe its margin depends on what? who you are. And then ultimately, it's like, then you have your people you know, and your haste yourself performing a lot, right? So you might have trimmers and framers and carpenters and like you might get your own, then the whole goal is can you get your aggregate back up to that 20% margin, you know, as a goal, but I talked to a builder in Atlanta, and he's like, 25 30%, I'm like, Dude, what am I doing in Minnesota? I should move to Atlanta. I guess with that framework, you know, what kind of pricing are you seeing in California? In terms of, you know, markup or margin, from your competitors? And is there a difference between new homes and remodels?

  Dagan Koffler 20:37

  Yeah, so, you know, again, our our world is kind of different, because building a new home is so challenging here, they they're far and few between. So most people do these, you tear fit 49% of the house down, because it makes the permitting faster. So if you if you leave 51% of the existing wall line, it's about a year off of the permit time, and probably a savings of 50 to 100 grand. So there's all these costs,

  Mark D. Williams<br> 21:05

  just in permit costs. No my word.

  Dagan Koffler 21:09

  So there's all these avenues that people try to do in order to not do that because we have Coastal Commission, which is another California agency. And then you have to go through like Design Review Boards, if each city has them, and then you go to your municipality just for like standard building stuff. So it's challenging. So we, it's really hard to just keep moving on that on that platform. So a lot of remodels happen. And remodels are obviously considerably more challenging to price, which is sort of the evolution of how we went to cost plus, we used to do lump sum or fixed fee for the project. And it's it just basically became impossible, they're just too complex now, we ended up just eating, you know, huge portions of the job, because it's impossible to to cost out what what things were really going to happen. But in general, you know, you get guys who just do a straight markup, you know, whatever, between 20 and 30%. And they take their fee out of that some people break it out, we break it out where it's 20% markup, and then 15% overhead, with the goal of being somewhere in that, you know, 12% range 12 to 15% margin, you know,

  Mark D. Williams<br> 22:20

  so hang on, just to make sure I understand that correctly. So you're sitting at the end of all of that. You're trying to net a 12% margin, but I'm confused. If you're 35%. markup, it should be fine at far higher margin or you're not factoring your overhead,

  Dagan Koffler 22:33

  overhead overheads, including that your costs are so high. So after after you settle all those debts. That's sort of what's what's left.

  Mark D. Williams<br> 22:42

  Okay, interesting. Okay, so that ends up being a little bit closer, actually. Yeah,

  Dagan Koffler 22:45

  I think just the margins are the same. But our costs, we probably have more overhead. And just as a company setup we have moreover, it's if you are just a paper contract, or whatever you call it, and you are charging, that your overhead is so much less

  Mark D. Williams<br> 23:01

  that. Okay, yeah, I got you, I got you. Okay, now let's make a little bit more sense. You have to get into p&l, which we won't do to really understand. Okay, so I guess we're already done the permit road. So we'll end of construction. I want to get back to other companies at some point. But let's go back to permitting. Why is it for those that aren't from California, like me? Why in the world are permits so long? And is it only because you're in the San Francisco area because you're by the ocean or is all a California that way? It's mostly

  Dagan Koffler 23:29

  California. So we're in North County, San Diego, which is our specific, we're in Encinitas. But all of these coastal cities, if you're within a certain distance of the ocean, you get Coastal Commission requirements, which is a California state agency. So before you can even submit to your local, you have to get approval from the state, basically, because you're in proximity to the ocean. So that's why tearing down a house is that approval takes a year from Coastal Commission,

  Mark D. Williams<br> 23:57

  and what is it exactly specifically that they're looking for? Or what is it what are these

  Dagan Koffler 24:01

  current environmental studies? Each, a lot of these cities have height restrictions, view ordinances, you have to do story poles. There's complaint driven from neighbors, so it just, it just takes a long time. And then we have you know, probably the most, you know, probably the strictest structural codes in the country, because of earthquake and fire. So we have that to deal with. So our structural engineers, they take probably three times as long as as the standard place rest of the country. You know, our hardware packages are, you know, four times the size of what yours are probably the moment so funny.

  Mark D. Williams<br> 24:38

  I had mentioned I was actually we were in Huntington Beach for the contractor Coalition, which isn't too far away from you about a year ago, and I got to meet on Blake house first name Paterson custom homes. What's his first name? Yeah. Anyway, I went yeah, and so I went surfing with him. It was really interesting, but one of his guys came with us. and they were talking that the, you know, I always thought that labor was the hardest part, not the permitting. Because, you know, for him anyway, he had mentioned how a lot of his guys have to drive several hours just to get to work. Because, you know, they were, you know, in, in such a high, you know, good luck living anywhere near where you're building homes. Do you have? Do you have issues with labor? I know a lot of your labor, obviously a self performing, you have them on your staff. But are people able to live nearby where you work?

  Dagan Koffler 25:27

  No. And that's a big problem, because a lot of these guys do drive about an hour. Yeah. But in San Diego, just some like USA Today or something. USA, San Diego is now the most unaffordable city in the United States. Cost of living

  Mark D. Williams<br> 25:47

  more expensive than San Francisco or New York? Yep.

  Dagan Koffler 25:49

  Its highest cost living now in the country. Wow. Yeah, so rentals are wildly high. Real estate is pretty expensive. So we run into this all the time, as is. Each guy wants a raise every week, and and then they're also living far away. We have the highest gas prices in the country. You know, we're we're almost $6 A gallon right now.

  Mark D. Williams<br> 26:11

  No. Yeah, it's

  Dagan Koffler 26:12

  five 579? I think it is right now. Right? So we have the height, like we're double rest of the country. So just those costs are they just play? You know, that's why we talked about overhead, you know, I have I've four trucks that you know, consume 10 miles a gallon, so just do the gas costs in a couple of weeks. And

  Mark D. Williams<br> 26:30

  it's funny, though, like, I mean, this is beyond my expertise, we need an economic economics professor to solve this one. But like, at what point like, how is there any relief, because your guys are further and further away, the costs keep going up, their cost of living is only doing going to increase? And I know inflation as a part of this as well. But like, Yeah, especially in a high demand area, like San Diego. I mean, we talk about affordable, you know, building here in Minnesota, and that's for another time, locally, but even so, because we're 90,000 units short of what our population needs in the Minneapolis, St. Paul area,

  Dagan Koffler 27:03

  we're probably five times that,

  Mark D. Williams<br> 27:04

  Oh, really.

  Dagan Koffler 27:06

  And we can't get permits, you can get permits in 30 days, it takes us you know, two years. So that number for us is going to just exponentially get larger and larger, because we can't build fast enough. So it's a huge problem. I mean, I've you know, I always say like, it's not a mystery, why we have low income, we can't get permits, and the cost of building is way too high. So if you sped up one of those two, that would be helpful. Maybe the permits, let's speed up the permits, we can build faster, we'll get more guys in the trade, we might be able to control costs on the labor side.

  Mark D. Williams<br> 27:35

  I mean, I'm not a big government guy, but like, who would be responsible for trying to change some of that stuff is that state law and it's

  Dagan Koffler 27:43

  happening fast that it's happening really fast. So they they've been changing what is taken 40 years, they've been reversing that like one every year, for the last like five years, because it's been it's gotten so bad. But you can't really do it on a blanket, because there's too much political, you know, jargon that happens in between there. But so they, they figure out the best avenue that has the least you know, conflict. So at us, you've probably heard accessory dwelling units, that's been the big push because you can kind of approve those anywhere. And they can just sort of be plopped in the backyard gets a separate address. It's an easy rental. They're easy to build for homeowners. And then the most recent was literally like weeks ago is they just passed a state law that you can now sell that adu used to only be part of one property because you couldn't subdivide, subdivide, and there's a whole nother issue like, you know, very answer planning. You know, subdivision if it's capable is you know, a year and a half project and $100,000 No prob easy. So it never makes sense to subdivide unless the home's worth millions, because just too much cost. So, you know, these, these things are happening very quickly, because we've gotten into more or less crisis on building and, you know, affordable homes.

  Mark D. Williams<br> 28:58

  Wow. We could do a whole segment just on this. I want to get back to the original question which we've strayed from, which is, which is totally my fault. Like most of these things. I get too interested in your answers. Then I straight Oh, good. Yeah. So we've got construction. We've got you know, you've got 15 people. We've talked about landscaping, you got 15 people, let's talk about your service department, which is was taken next or what? Yeah, DDC now. Yeah. When did come about and tell us a little bit about how that works.

  Dagan Koffler 29:30

  It's been probably four years and we don't do it. It's not a ton, but it was really kind of brought on by a client. So a client that they moved here for a job and they're actually from New York originally and moved around a little bit, but they were going to be moving back to New York and they wanted to keep this home as a second home. And he kind of asked would you would you like watch our house and we did a little research and sort of understood, you know, they wanted you know, they want someone to go we go there once a week. So it's kind of Like a monitoring, you know, actual monitoring of the home. So we have a guy who goes there once a week, really they check for like angle stops, and he leaks water heater, you know, moisture. And that's also like security, any break ins, things like that. And then we also do the landscape maintenance for that. And, you know, this homeowner loves to keep his house in perfect condition. So, you know, every couple months, it's like, Hey, can we freshen up this? Can we can we do? Can we, you know, it's all wood windows, can we refresh all the windows? Can we, you know, add this, add this, it's, you know, every year, we do probably between four to six projects, small projects for them. So it's, it's been kind of fun, though. So it's a mixed bag, it's a kind of concierge service. It's a security monitoring of a home, and landscape. And so we do, we just picked up another house a large home and read Santa Fe, to another big area close to us that has sort of a state style homes. But it's we've started with home, we finish to, we tried to get them on track to do that as well. So we, you know, once we install appliances, we take all the serial numbers. So if you ever have a warranty, we have all the serial numbers, because they always require that. So we're kind of prepared. And then we give them a list of the things that shouldn't be done and need to be done in order to like maintain warranty with us. So if you're not, you know, cleaning out your sub zeros once a year, if you're not replacing your return registers, filters, if you're not doing any of these things that we're telling you need to do to keep them proper maintenance, then, you know, warranties can be voided. So we just want to sign them up to say, Okay, you guys just handle all of that. It's great. That's kind of the idea. So

  Mark D. Williams<br> 31:36

  it's interesting, I get asked a lot of questions on this one, because I'm actually I've been thinking about this for a while of what whether I want to do this or not, because I still think you have to manage it. So just because there's a I do like the idea from a business owner, like you have a you have a reoccurring revenue stream, because once you obviously finish a project now as a service you are well you're going weekly, so you've got 52 touches a year, that's a lot. Walk me through. So you started because this one client of yours wanted to do it. How many total clients do you have now how big is your team that services it and walk me through some of just the logistics of of how you, you know, like how you obviously like creating businesses and you seem to be good at because you keep adding more. Either that or you're creating a Ponzi scheme.

  Dagan Koffler 32:23

  This is small, it's only three. And so it's really one guy manages the walkthroughs. But then we use our construction site staff for all the fixes. So like my painter, we he's my main painter, he just got subbed out to go do all these windows for our house. So he you know, he sanded, down, refinished, I think it was like 10 different windows. So that's a small project that we manage. It's just like a baby project on the construction side. But it's funneled through, you know, the DDC next to their sort of

  Mark D. Williams<br> 32:53

  things. So you have basically you would have, if I'm guessing here, you have one employee for DDC. Next he manages or she manages the entire job scheduling has probably a truck probably kind of pretty handy. love to know what that background of that person is. And it's actually

  Dagan Koffler 33:07

  pretty minimal because his really, there's his for eyes on the project. So he does, we have sort of a checklist of the walkthrough, most of its water. So you know, he rubs his hand on every angle stop just to see if there's any leaking. He walks through it to see if there's any security things, he checks, gutters, it's a basic checklist just to see if there's anything that needs looking after maintenance. And then like this family keeps cars so we actually start their cars every two weeks, let them run. So batteries don't die. There's a bit of a concierge service. You know, people have lots of deliveries, so they don't get kept outside. And then we're just sort of on call a lot. So we you know, when they're here for the holidays, like boxes, you need 440 boxes removed immediately. So we send a truck and we go pick it up, and stuff like that. And so

  Mark D. Williams<br> 33:51

  do you charge them hourly? How do you build for this kind of thing? Yeah, it's hourly.

  Dagan Koffler 33:54

  Yeah, so we just have a set hours for each, you know, whatever the person that's going there. So we have a set hour for the person who just monitors the house. You know, and standard walkthrough, it's about a three hour round trip, so they get charged for three hours. The second time when they do cars, it might be half hour, 45 minutes longer. And then we just do we just build an actual as on every little little bit, you know, most of it. I say it's all like trust. So we're not we're not creating a proposal for them to go. Clean gutters. It's like gutters need to be clean. Here's the invoice. Here's our time and markup for it. And it's all about trust. So we want to get it done next week. Can you get it done next week? Sounds great. That's sort of how it works.

  Mark D. Williams<br> 34:34

  I mean, you get it done. I mean I love it. Obviously you have to have people willing to pay for it. But if you've built that trust and you're not taking on it's not like you have 100 of these you have a handful of them so you treat them really hot it really well that's amazing. Yeah, we don't want

  Dagan Koffler 34:45

  a lot we don't want it to be you know, like Airbnb management that gets meant for second home your customers who really want to just have their home dialed in and they want to pay for you know, basically to have you on a phone call.

  Mark D. Williams<br> 34:56

  And I would I would imagine that it also is in a crowd Double sales tool. I mean, I know if I had that at my disposal, I mean, I could sell, I could sell that really well, because I mean, who a lot

  Dagan Koffler 35:07

  of us, they don't want us to go away. And you've probably seen that, like, you know, when they have you for a year or two, and you can answer all these questions and they you know, your home their home better than they do. They don't really want you to leave. Because if they ever have a question, they want to be like on good terms. Or they could say like, Hey, Mark, but how do I do this at my house? I don't.

  Mark D. Williams<br> 35:24

  And I would agree with you 99% of the clients I've I've worked with, I have one client where it's like, I'm not sure I would extend that offer to that one client because I'm like, I don't want to go back there again.

  Dagan Koffler 35:35

  It happens and you got to pick and choose, you know, yeah, pick and choose who you work with. For luck there for sure. Yeah, sure.

  Mark D. Williams<br> 35:40

  What if you can like what Ania yet, like, what would your overhead be on DDC next? Because it seems like you're running that pretty light, because you're sort of leveraging your other landscaping. I assume you're building your landscape company for that. And for construction services, you're building that through construction. So what would your actual overhead be? Because it's very

  Dagan Koffler 35:58

  little just it's just the guy's labor for the most part. And okay, some materials, KS, Lancer subcontracted out so like, you know, my H back does all the yearly fluids for the AC compressors. And he does all the filters. We do that twice a year. So it's just a subcontract, which just like, you know, it's like any other subcontractor work. But everything else was pretty much in house. So it's all labor rates. So very little overhead. You know, the guy who who does all the monitoring uses own cars. So it's, you know, gas mileage, but very little overhead in general.

  Mark D. Williams<br> 36:30

  Okay, that's really interesting. Okay, let's move on. Well, uh, scalability, I mean, do you? Do you plan on scaling that? Are you just kind of like what it's doing right now? Or what do you see the future for this DDC? Next,

  Dagan Koffler 36:41

  you know, it's it's a growing thing, because we've had like, positive and negative we, we had a couple clients who likes it. That's why we kind of make it a blanket where it's all about trust. So we're not going to if you say, hey, I want to get my gait motor fixed, we're not going to meet three people and get you bids, and then only charging for the one hour of when we're there to do it. It's, it's you want it done, we're going to get the right guy to do it. And we'll bill you for it. When they understand that that's the process and they're okay with that, then it's a pretty positive experience for everyone. Because we have an opportunity to make money, we get stuff done for them peace of mind. And they know that we're a phone call away for anything. Because honestly, I just had a call before, got on this call with a client who's thinking of being out of state six months a year. And their biggest worry is like, if a toilet floods, like if we call you, are you able to get someone out there immediately? Like the answer is yes. And that's the peace of mind that everyone wants is like, I don't know, anyone else that knows how to turn water shutoffs off and where the water main is like, if you're the person, can we just trust that you can get someone over there, turn it off.

  Mark D. Williams<br> 37:48

  I'm going to turn the I'm going to turn you into my business consultant. So if I so if I was going to start this, I would need what a sprinter van full of tools. One guy, I'd pay him What 60 to 100,000. And I would put first I'm thinking about pre selling it. So I would probably pull my last 50 clients and just say, Hey, would you guys spend? Or would you guys commit to 5000? A year 10,000 A year? This is the list of services I would pre sell. And then I would go hire someone? I mean, how would you if you were to do this over again? How would you how would you structure this? Or what advice would you give to somebody like myself, like who I would like to service my clients for two reasons. One, I want them to be happy, too. I love the idea that I can service them if there was ever an issue plus, I think it's also an opportunity, the doors always open. If you're constantly in touch with your client, you know that they're going to sell their house, maybe build a new one, maybe they're going to finish their basement and you know, you haven't seen them in six, seven years, did you fall off the top of mind awareness, you're also going to be more likely to be referred to people. But then lastly, you know, at some point, if I was, you know, trying to be able to I know it's hard to sell a construction company because we have such a low barrier of entry. And it's like if Nagin leaves or if Mark leaves do you really have a company? And that's something I'm trying to actively fix. It's going to take a while to do that. But that was my thought process to it was so if you have Yeah, so if you have a service department that let's say bringing in 100 grand a year for just the

  Dagan Koffler 39:10

  steady income, it's not prescriptive, or it's not future, it's steady.

  Mark D. Williams<br> 39:14

  So am I thinking about that the right way mean? Is that what advice you would what so I

  Dagan Koffler 39:18

  went the opposite. Since I had all the in house staff. I didn't I didn't go at it as I needed to hire a single person for this because I think having that workflow is challenging. So you got to keep that guy busy five days a week, you know, eight hours a day. And without small fixes, and maybe that comes you know, where you can charge for, you know, refinishing this or refinishing that but that person has got to be very skilled. So it's a challenge and I found that trying to find that guy was was too hard. So I just use people that worked within the umbrella that I had already. And I sort of branch out so the person that does the monitoring is not that handy, but he knows what to look for and then we can just figure out what guy within the company is the best fit for that. I have a lot of guys that are, you know, great carpenters skilled and kind of do whatever. So, you know, once we know what the problem is, we can get one of our teammates out there pretty quickly. So I didn't go out as like I'm creating a job for one person. And then the fixed fee is also challenging because you really have to define what that maintenance scope of work is. And then what those costs are to you. And then does it make sense like 5000 Sounds like a lot, but like, you know, you do ACS, you do? Filters, you do gutter cleaning, you do window maintenance, you do solar panel cleaning, you do XY and Z and 5000? Not really that much, you know? So that's kind of how we did it.

  Mark D. Williams<br> 40:40

  In California, that's just your gas bill for the year. Yeah,

  Dagan Koffler 40:43

  exactly. So we do it more like on demand, there's a minimum service, just a monitor, and then we just sort of over hourly. And then again, it's kind of like on trust, because, you know, most of your homes might be new construction, a lot of ours are remodel. So there's parts of the home that are still old. You know, we probably did most of the work there. But there might be things that come up. So it's kind of challenging to do it as a fix. I think Patterson does it as a fixed thing. But I think his is just like, he just wants a certain amount of revenue that covers everything. And then whatever, after that, it's kind of gravy. And that's a way of doing it to just like that just keeps you in the door. If that's your mind frame, then like if you don't really want to make money off of it. Or if just like, if it does make it to this point, that's great. But I felt that it was a little bit easier to do it more of a like on demand type of situation. On

  Mark D. Williams<br> 41:34

  the from the bookkeeping standpoint, because you have a full I mean, I assume you have a for sure. A full time bookkeeper, maybe to me do you have in house accounting? Or how are you handling all this bookkeeping, because you also have to track 30 people's time cards and all that. So

  Dagan Koffler 41:47

  we have an outside accountant, but then office manager does all the bookkeeping. So each all the time cards, you know, insurance all the above? Yeah, I know you guys

  Mark D. Williams<br> 41:58

  are you guys manage that all digitally through like buildertrend, or some sort of platform,

  Dagan Koffler 42:02

  we use CO construct QuickBooks co construct. So yeah, we have a few different platforms that we use. On design side, we have AutoCAD and probl are the CO construct and QuickBooks are our main sort of business.

  Mark D. Williams<br> 42:15

  So co construct got bought out by buildertrend. Are they still servicing it? Or what's the future of CO construct? Yeah, it's

  Dagan Koffler 42:22

  been an interesting ride with them. Because I, I, I've been with them for, like six years, I think. So before they were bought out, and I, I, you know, I made a conscious choice to go with them. Because I liked some of the features better than build a chat at the time. There was a big push to sort of kick us out of CO construct. And then there was a lot of pushback, I think, from coke instruct users. So they sort of just told us that it's going to be alive forever, but they're not really going to put any money into it. So I think it's down to like one customer service rep. But it seems like they're actually in the last six months, I think they're realizing that the CO construct users are pretty loyal, and they don't want to move. And I think they're gonna be real mad if they do. And I think there's quite a few, I think, a guy my builder 20. So they think there's at least 5000 of us. So it's not a small number. And I think all 5000 don't want to move. So we don't use it like heavily. We do use you know, as the estimating software, to do his job, blogs, things like that. We do use, we use quite a bit of it. But we prefer the features considerably more than than buildertrend. Right now.

  Mark D. Williams<br> 43:31

  You had mentioned moving on to your next conquest of companies. Your was your import business? Yep. It was how in the world did that come about?

  Dagan Koffler 43:43

  So we picked up the design side of our business quite a bit in the last couple years. Some were probably designing. So we do a mixed bag. So we have two in house designers. And then we have an architect who is an outside firm, but he works as our in house guy. So again, most of the challenges here permitting lies as a lot of people choose to just do an internal remodel versus going through a city permitting set. So we can do the interior design very quickly and get started on a construction project faster than if you did that through city permitting. So that's the route that most people choose to do. And even when, you know I get involved when people are in escrow a lot, so they always ask like, oh, well, this home is great, but we would want you know, 800 square feet more. And I always say like find a building, any house, any condition that has the footprint that you are okay with, you know, square footage that you don't need to add, because we can do a lot with that much faster. If you want to add 800 square feet. You know, this is a three year project. If you want to do if you can find a house that has that extra 800 square feet. We can do an intro remodel and you know, swap Windows siding, whatever, and we could be in and out of here, you know, 14 months. So you know that's the advice you give as far as you know Giving them the option says, of what this is going to look like. Interesting.

  Mark D. Williams<br> 45:04

  One of the questions that I had for you was, you know, you have all these businesses a what's the next business? Because someone, if you if you got into two to three to four, there's gotta be some other things cooking around in that little Dagon brain of yours. What? What are some other ones that are kind of itching to get see daylight?

  Dagan Koffler 45:20

  You know, like, like, I keep saying, you know, building is is is cyclical, and it's finicky. And it can go up and down. And like you said, it's a hard building, or it's a hard business to sell. And if you don't have a, you know, son or daughter that wants to take it over, or, you know, it's a challenging thing to navigate. And, you know, so we'll work for 30 years, and then we just gotta leave.

  Mark D. Williams<br> 45:45

  I wish, I wish, I wish somebody had told you that before he started like, no one when I was 23. And I started as like a, I wouldn't have named it after myself looks like you took the same bad advice. I did. Yeah. And, and then second is like, nobody told you like, Hey, if you're gonna create a career, you might as well put 30 years into a business that you can sell. And now I'm just like, oh, man, the idea that you will have worked for 30 years, and that asset isn't worth anything seems also almost as disappointing as not using margin for your entire career.

  Dagan Koffler 46:14

  Yeah. Yes, it is challenging. I think it's changing a little bit. I think construction companies that have a good reputation are becoming valuable to some extent, just because there's not that many, you know, you know, the sort of trade shortage that we have, you know, all those general contractors that were good old timers are time were ready to be gone, they're all gone long gone. And I don't know what the next group of young builders look like or tradespeople. So you know, if you can walk in, you know, even a private equity firm, they could find a go to guy and say, we'll support this guy you take over from here, there is potential value there. If you've got a workload for two years that can you know, Garner six, eight $10 million, those are locked in contracts, and you have the system set up, I think, that's a big one is most builders, you know, the old old timers, you know, everything's on a piece of paper, and, you know, you know, I need to, here's an invoice for 30 grand and eat it tomorrow, you know, it's like, those days are gone, you have to be much more systematic than then then those days. So I think if you can prove those systems have value, and that this is not like plug and play, so to speak. But if you can bring in a builder that can run it from here, the systems are in place that people you know, we have some standard operating procedures that someone could look at this figure out, what are the steps I need to take to get to the permit set, oh, here's, here's this, like, nice list of things that I gotta get done. So, you know, we're not perfect. We're every day, I mean, meetings and a new SOP, you know, it's a work in progress. But we're, we're trying to make steps to get to that point where at least, we can bring a new person and we can train them, and we have, you know, materials and solutions for them to follow.

  Mark D. Williams<br> 47:58

  How do you handle hiring? I mean, we just went through it, where we hired a new office manager. And, you know, we look for a project manager. And, you know, as you're trying to figure out, like, do you train somebody up? Do you, you know, do you hire someone who's skilled, but maybe you have to pay him more than you would? Like, I guess walk me through how would you guys navigate it employment? I mean, you employ a lot of people. I mean, at least 30 people, I guess, what are some secret sauce, suggestions that you have for those that own a business?

  Dagan Koffler 48:29

  Field guys have been kind of like, just serendipitous they, you know, guys, the ones that have been with me for a long time, either started with another company, and I knew them from somewhere else. And then they called me and said, Hey, I laugh but I I love working for you. What do you think? And then I kind of bring them on to like my finished carpenter than me for five plus years now. He's amazing. And he was from an old demo firm. You know, the guy didn't see the value in him and I was like, smart, he was good. Like, what do you do? And he called me a few weeks later like yeah, I left over there you got any work for me? And I was like, Sure, get over here. Absolutely. And you know, I was five years later so a lot of them come by friends so they all have friends and relatives that either have a trade I haven't really hired too many like very experienced people hire dollar, you know, experience we just went through to hire super and we had an option for a commercial guy and a lot of my builder 20 people were like, stay away, you know, they don't know how to transition into residential so there's all these like avenues that are challenging. And you know, the price point on everyone is challenging too because you really need to crank out revenue in order to support a staff like this. So it gets hard but most of the field guys have come through my top guys who I say hey, you know anyone that's you know, good finished Carpenter, and they'll be Oh, yeah, I got this guy who would work for me see, we can get him in You know, that's usually sort of works. Landscape, guys, I have a family, basically, I hire the, you know, the Lopez family, like there's six of them now, that worked for me. And three or four of them are like amazing masons and can basically build anything on the landscape side. And they got 12 cousins and uncles and brothers that all you know, we need the staff up, I use it pretty available, guys. That's sort of how that that flow work. Well, I

  Mark D. Williams<br> 50:27

  mean, it makes a lot of sense. I mean, ultimately, what you're talking about is sustainable, because you're talking about tapping into your community. And you're talking about promoting people and hiring people within your own team. So they're obviously you're doing something right at the head of the ship, because people a want to work for you and be there recommending their friends and family. I mean, that's a pretty cool, cool thing I have written down here because it was actually I've shared it a number of times on the podcast. But at engelberg, the owner of Pella windows here in Minnesota, he had said it on his episode, he had just said that culture, Trump's strategy. And I just it's been one thing I've noticed with many of the companies that I've interviewed, that the successful ones have a very, you know, obviously just a great culture. And sometimes people can define it and tell you what it is. Sometimes they can't I sometimes have a hard time, if someone was telling me what's my company culture? I'm not sure I could tell you, you know, articulate it. In a way. It's almost like a feeling. But I guess I'll turn the question on you. How would you define, you know, the culture of your environment? Because clearly, it's working?

  Dagan Koffler 51:27

  Yeah, I think it's, it is really hard to, like, define in a few words, but I, you know, I think making guys feel appreciated. I also, like a lot of podcasts, you know, I, I used to wear bags. So I'm also there's a connection there, too. I'm not a guy that was always computer driven, you know, I still, like be on site. And, you know, if I can get to every site, I can get a lot done quickly. Because you know, there's a there's a sort of a easy understanding, like, Hey, this is how this has to be tackled here attacking here, this is how you do it, I can show him or go, Oh, that makes sense. I got a boss. Thanks, man. You know, I'm out of here. So there's that connection. That's nice. And you know, team morale. Like, we constantly try to figure out how we can, you know, keep morale high. So, you know, we went bowling a few weeks ago, and was really fun, you know, took everyone bowling and beer and pizza. So anytime we can just like keep morale high. And sometimes just like, chat offline sometimes is nice. But I think for the most part just being appreciated, and understood and like, feel like you're part of the team. You're not just like an outcast or not doing something for the greater good. But it is it's not like there's no couple words that can kind of describe it. I think it's just like, like, respect, common respect. I speak Spanish, like 90% of my staff speak only Spanish. So there's that kind of camaraderie like, oh, oh, the boss speak Spanish. That's cool. You know?

  Mark D. Williams<br> 52:50

  Because I mean, I would have to imagine that's pretty common in in, in San Diego meeting that people? No, it's not.

  Dagan Koffler 52:56

  No, I mean, you know, out of out of the 20, some in the field only, like two or three are bilingual.

  Mark D. Williams<br> 53:02

  Wow, that's actually quite surprising. Is that because they're they native San Diegans? Or are they people transplanting there? Or what? Why would that be?

  Dagan Koffler 53:11

  Yeah. Marlins a lot of Guatemalans and Mexicans, for the most part are two countries that they come from. But you know, some are second generation and like, you know, limited English. It just depends, you know, that

  Mark D. Williams<br> 53:27

  wasn't it? That wasn't that wasn't my question. Sorry. I meant it in verse it. Like, as I'm a little surprised that the population that's already there, not let's say the workforce in this situation, wouldn't that they would be bilingual. So you're saying that your workers may not be bilingual, but people like yourself? I mean, I can't imagine you owning a company, especially in southern California and not either investing the time or I guess I'm curious how many everywhere so other, your other builders would not speak Spanish?

  Dagan Koffler 53:56

  I think I'm the only guy I know that does.

  Mark D. Williams<br> 53:58

  I mean, that's shocking. That's, that's, that blows me away. I had a very guy. No, I have very, very limited Spanish. I took it in college just a little bit. But I mean, I always try to, you know, I'll say Frio. Or, like, I'll say hello. I mean, I try to interact with my guys to the best of my very limited ability. But, you know, here it's not nearly as prevalent as it would be down there are

  Dagan Koffler 54:18

  like the mass vast majority of our construction workforce here is Hispanic. You know, yeah. Big, big part of our construction population is Hispanic. So, you know, it's a big part of the culture too. You know, all these guys come from backgrounds of whatever they were doing. And so I said, it's pretty easy to find a cousin or brother because, you know, someone's got skill somewhere and whatever they were doing. Yeah, yeah, yeah. But no, it is pretty rare. You know, you'll get a second generation, you know, a Mexican American who will speak bilingual, but those companies are far and few between two, you know, the white guy or gal who doesn't speak Spanish. Well,

  Mark D. Williams<br> 54:57

  I just want to make sure because the audit and I want to make sure The audience isn't clear. So maybe I'm the one who's not understanding that. So like I get like I get that a lot of the transplants don't speak aren't bilingual. I'm asking basically the business owners the other day against the Bob's there just to be very clear, they don't speak Spanish very well, they do not know. And the vast majority do not. Because I don't blame the people moving from Venezuela, and Guatemala, not speaking English. I do sort of blame the people that live in San Diego not taking the time to learn Spanish because I'm like, Man, if I lived there, I would make sure all my kids spoke Spanish because like, I just like, Man, how do you converse with your neighbor?

  Dagan Koffler 55:31

  Yep. No, it's a it's a it's an interesting deal. And there's, you know, there's, I've, I saw the advantage of it. Yeah. Good for you to be on site and doing that. So it's interesting. Did you

  Mark D. Williams<br> 55:42

  did you did you learn by traveling? Did you just learn in school? Do you learn by doing it? Or how did traveling mainly

  Dagan Koffler 55:46

  Yeah, after college, I spent a year in Latin America. And I did a ginormous loop around South America starting in Venezuela and you know, learn that learn on the road.

  Mark D. Williams<br> 55:58

  Sure, I spent some time in Argentina, but not enough to remember enough Spanish to make it count. But I do love America. How are you speaking of North America? I'm thinking of some Malbec wine because my cousin lived on a Mendoza and I was reading somewhere along the line that used to be a Somali AE. And that is a pretty rare skill set Venn diagram builder, and Somali a, tell me a little bit about that. And other than you, I'm sure you're an amazing gift giver around Christmas, you can give your clients some ridiculously cool wine. I guess tell us a little bit about how that came about. But then just more briefly, how it's related now to building are you able to use any of those skills? Whether it's management or details? Or you know, how do you think it actually helps you at all being a better designer? Better builder? Yeah,

  Dagan Koffler 56:44

  I think all the experience helps I met most of it's just the you know, the people skills. But the reason I got into it, I went to Sonoma State which is up near Napa Sonoma. That's where I went to college. And so I think my sophomore year in college I started working at a winery so I learned a lot about winery and I was like head of a tasting room but my senior year I would do like all the private you know, wine classes and stuff like my I was just barely able to drink but I was like teaching classes

  Mark D. Williams<br> 57:14

  that's pretty good your own vineyard but you couldn't drink I mean I don't my only exposure to Somalia other than you know having a nice glass of wine every once awhile with dinner but like I remember seeing the movie was on Netflix as at some are some sounds like I mean is it is it as hard as they make it seem to be like people study for crazy amounts of time like you know, are you like yeah, we're in once you are a small Yeah, like registered Somali Are you that for life? Or do you have to like keep up on it? Or how does that accredited so that

  Dagan Koffler 57:43

  movie is based off the master Somali A's which is kind of like a like an educational level. There's a various stages so I was part of the WSU at Weinsberg and zoo trust that's the master Somali a class the one that that's based off of, but you can kind of get like various levels of education on on it. So I think I ended at the advanced level. And the next one is I think it's called a camera the next one, that's the one that the movie is based off of. That's where you have to take like six blind tasting and you have to know the origin

  Mark D. Williams<br> 58:15

  Okay, that's I didn't know that. I thought once you were Somali, like that was like once you're let's say a doctor, like you're a doctor like you've passed medicals, you've done residency, it's not quite the same. There's different No,

  Dagan Koffler 58:25

  it's more just like a status thing for small us because most of those guys aren't like working some Psalms, they don't work in a restaurant. They're not managing wine lists or anything. Most of the core industry of small A's are managing some sort of restaurant list or their beverage director for a group or whatever. But yeah, it's why when I moved to New York, I worked at an auction house and that was why I moved to New York to work to Zacchaeus walk it's in Scarsdale, our White Plains up in Northern New York and the largest wine auction house in the world. So part of interesting actually interesting part of it is that we got to catalog private sellers so I got to go into some of the like, you know, the largest homes on like Eastern board like we we catalog the seller in Naples Florida. I was like this you know three story mansion on the water and he had like three generator setups for he has two wine cellars three

  Mark D. Williams<br> 59:20

  generators home Yes. So he had he had

  Dagan Koffler 59:23

  the repeated three times just in case he fell twice. And this was you know, it was like a $2 million you know, seller. So, you know, I got to see some radical you know, pretty crazy. We saw a few in Greenwich, Connecticut that were pretty amazing. You know, natural sellers were you know, they actually were so far underneath where it kept like, like perfect 5961 degrees year round. So you know, I got to see some pretty interesting architecture I wasn't like in the mind frame I'm gonna be a builder but I think all that played into my like, you know, goal and wanting to go that route. Um, I think more than anything is is the the people skills is like learning to deal with people. If you don't like a certain way, it's the same thing is like design and homes like, well, let me get you back here, you know, because here's things that you might like. That's

  Mark D. Williams<br> 1:00:13

  so funny you say that I feel like that's been a reoccurring theme on the curious builder podcast for like the last month. We just had Jordan DiIorio on not too long ago, and she's a fractional CEO. And she was just talking about how she felt like everyone should have some level of experience in the service industry. Because of how incredible a training tool it is for service skills. And I had heard a story that I've repeated at this point, who knows if it's even true anymore, because it keeps getting bigger and bigger the tale, like basically, it was a plumber in Florida, that needed people better paper skills, and he couldn't train people to do it. So he went and hired a bunch of, you know, essentially servers or Maitre D's and then he trained them to learn how to plumb and he just slayed it. And I just loved that, whether it's true or not, I guess I need to fact check that, but I guess it doesn't matter if I believe that's true. And I, I actually never had any service industry, there's a part of me, honestly, that wants to go back and just work like one night a week at a restaurant, I think I'd make it like two weeks, it'd be like, I'm good. But I do like entertaining, and I love people. And I do think it would be very enjoyable. I certainly appreciate good service. And I know like when I look to hire people, you know, within a building company, because we have to defuse so many difficult situations. You know, sometimes someone's over budget or, you know, something bad happened to hit bad soil, you know, someone comes to us, at least where we are. And they're like, oh, man, well, why didn't you know that? I'm like, Well, you know, I can't tell you what's underneath your house until we do a lot of tear downs. And so we always would put an allowance in there for, quote, bad soil. And it's like, well, what does that even mean? It's like, well, it's organic soil, I can't build on it anyway, I guess people skills to your point, ultimately ends up being probably the most valuable trait you have. And how you learn

  Dagan Koffler 1:01:50

  today is troubleshooting. You know, it's problem solving. It's all relative. Because that's our world, same thing. It's fast paced, it's problem solving, you know, what do you do? The world's moving very quick and building and, you know, what's the what's the angle? Yeah, and, you know, we worked at a couple restaurants that worked out were very, like popular high end restaurants. And, you know, that interaction with probably the same clientele that I'm dealing with now, on the building side, you know, they wanted a service going into that restaurant, and they want a service built in their home, and what's the what's the experience? You know, the restaurant was building an experience for them, we're building an experience to build their home. So, you know, there's, there's a lot of relative things,

  Mark D. Williams<br> 1:02:30

  I think just dawns on me right now, as I, as I mentioned before, earlier, in the show, I just left, you know, my client meeting where I definitely didn't give them good service on the end, basically, like, Hey, pay your pay your waiter on the way out, I'm out of here, I gotta go run upstairs. But you know, I could almost, I mean, you could have a big enough company, you could justify this position. I mean, you could almost have someone who's like in charge of, like, client well being or whatever you want to call this person, like the maitre d of building like, all their job would be to touch base with clients, make sure they're getting gift boxes, thoughtful things, and like, just touches and like, the handwritten thank you cards that ultimately, you know, they probably want to see your name on it. But I feel like we have a long or I know I do, I have a long way to go to be doing the kind of service that I would love personally to receive. And frankly, if I was to be honest, it comes down to two things. One is time. I just don't. I mean, I think every business owner says the same thing. We don't have enough time. And then second is, is money because like I mean, I guess I could hire that person to do that. But then how do I actually justify that? Do I add a line item to every house that I build up? Like, let's say you build 10 homes? And let's say it's, you know, $5,000? It's so it's a $50,000 salary for customer service? Honestly, it's actually not a bad idea. It probably worked at scale, it would probably be a really good idea. But I don't know, what's your thoughts on? Like, how would you improve your level of service to your clients? If you were to make that decision today?

  Dagan Koffler 1:03:50

  Yeah, I mean, it's something we talked about in our weekly meeting, like every week is like, urgency on, you know, if it's something you don't know, respond quickly, say, we're gonna get back to you. We've heard you, we got your message. We're gonna be right there. So it's, you know, I don't think there's a blanket statement that's going to fix all of it. But I think doing all like you said, these touches, making sure that they know we got their email, we're working on it. And then we always are trying to be like, proactive. So we're trying to get it to a point where the client never asked to ask us what's next. They already know what's next, because we told them, so we can get to a point to there. I think that's great. Because it means that they're never like, hey, what am i What's my contractor doing? You know, I think it's been a week, you know, they're doing anything, like they already know what's coming, because we've, we've given them a Friday week, you know, weekly round up that says, here's what's next, you know, next week, here's what to expect. Here's what's going to be billed.

  Mark D. Williams<br> 1:04:39

  Do you do that via email or through co constructor? What's your formula on that? Yeah,

  Dagan Koffler 1:04:43

  pm does a weekly round up. Just what was happening last week, what are we looking forward to next week? Just keeps us ahead of the game as far as them knowing what it is. I think that's the worst thing that happened. The past is like, you know, client emails or emails the group like hey, You know, just checking in to see what's going on. Like for SEMA, like, we should be telling you it's going, right.

  Mark D. Williams<br> 1:05:06

  No, I agree. Well, we're, that went really fast. I think we could do two more of these for a mini series in California Minnesota differences I didn't even get I want to talk a little bit about green energy and tech and I know you're building your own current home, but we'll have to save that for a for another episode. I

  Dagan Koffler 1:05:22

  guess I'll just do a tour when that when we're finished. I like that I

  Mark D. Williams<br> 1:05:25

  used to have family in San Diego used to go out and play. Coronado beach. We used to go on play volleyball tournaments. Back when I was in high school in college, I spent a lot of time in San Diego. I couldn't tell you where anything is other than Coronado beach, but I get the appeal. It's 75 and sunny. You don't even need a weatherman. He just says the same thing. 365 days a year. Yeah,

  Dagan Koffler 1:05:41

  there's always a joke. Like, what's easiest job in the world is the San Diego weatherman.

  Mark D. Williams<br> 1:05:45

  Yeah, well, turns out you're the most expensive place in the world, the letter of Minnesota United States to live so I can't go there. I'll just stay at your house. What? I guess one parting question just because I like how many businesses you generate. How do you like to self educate? I mean, what are some ways that you you know, kind of stay sharp and keep your mind tooled up?

  Dagan Koffler 1:06:03

  Podcasts actually a good one, especially at the building world? I mean, I listen to you and listen at modern craftsman sometimes, you know, I could kind of float around them, I get, you know, on kicks, I started listening over lunch. You know, I read the standard like fine homebuilding. Actually, like a lot of design books. You know, so I have like Jake Arnold and Ember interiors and Jeffrey Duncan, and just, you know, a handful architects and designers that I respect, and, you know, I think, as a builder, I can look at finished image MC Wow, look at the complexity of went into that. And that's educational. For me. It's not just like, Oh, it's a pretty picture, like, Whoa, look at the levels, the things that had to go into play there.

  Mark D. Williams<br> 1:06:44

  It's funny you say that, because I think you're right, as a builder, you know, kind of how the sausage was made. And you might see this amazing photo, and it doesn't mean we're not wowed, because it's like, there's the beauty aspect of it. Like, like, why was the but if you really stopped me, like, wait a minute, if I really used to think about like, how is that? How was that stone arch detail? Like I was looking at your website a couple of days ago, as I was preparing for our speech or our interview. And, you know, some of the ceiling details that you get into Dagon are incredibly detailed. What is that when you've got four arches from four different sides? Is there a technical name for their own good own arches? Kreon. Grant? Yeah, we don't I've never seen that in Minnesota. Not that we don't have it. I'm sure on some architect respect it and all the architecture, or you don't know what a green arches. I've never built one, but I'm sorry. But they're, I mean, I was like, I was just thinking about like, wow, that's you gotta be a spot on wood. Most of those be plaster work, or would those be

  Dagan Koffler 1:07:37

  drywall? So it's just it's just frame when it's just drywall? Yeah. Wow.

  Mark D. Williams<br> 1:07:40

  That's incredible. Yeah. All right. Well, a

  Dagan Koffler 1:07:45

  lot Blosser inside. Awesome.

  Mark D. Williams<br> 1:07:47

  Yeah. Well, obviously, if someone's looking to build a new home with you, they better get in touch with you now, because you're two years out not because of you. But because of the California Building Code. Work in our listeners find you.

  Dagan Koffler 1:08:00

  Easier says Instagram is probably easiest. It's at taking design. That website is digging site construction.com. And then for all the other we have DDC landscape, which is our landscape company, we have a Instagram there, it's at DDC landscape. And then the furniture import is DDC and CO. And same goes for both of websites. But we have links through the construction site, there's links to all the different companies so you can kind of navigate pretty easily.

  Mark D. Williams<br> 1:08:25

  For those listening. Check it out. It's a really sharp website. I thought it was very well done. How out of curiosity, how long? How fresh is your website, it seems very fresh.

  Dagan Koffler 1:08:33

  So we actually just did a refresh because we had like four projects that we hadn't uploaded. So it's been I think we did that a few months ago. But the original templates from a couple years ago. Okay, yeah, that was sort of the major up fresh. Yeah. Thanks.

  Mark D. Williams<br> 1:08:48

  Hey, when you come on vacation up to Minnesota in January, when it's really nice and warm up here, you know, I'll take you out. But thanks for your time. And thanks for listening to curious builder podcast.

  Dagan Koffler 1:08:58

  Yeah, thank you. Appreciate it.

  Mark D. Williams<br> 1:09:00

  Alright, see you there again. Yeah.

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