Ep34 Construction in Iowa with Jack Esser

[00:00:00] With all the different industries ran, there's so many different red tape you have to go through or you work with some private developer that it's him, his money, no board to go through non-profit.

[00:00:10] Every project has been different for us.

[00:00:12] From cornfields to high risers, office to industrial houses, do hotels and every other asset class in real estate,

[00:00:19] we cover the people, the projects and the profit.

[00:00:22] Welcome to The Investing in Iowa Show.

[00:00:25] This show is for go-doers, action takers and business owners.

[00:00:29] It's for people like you who are sick of Uncle Sam taking a huge bite in your apple.

[00:00:34] If you're looking to get ahead of what's taking place in Iowa, learn who is doing what and how you can get in on the action.

[00:00:41] You're in the right place.

[00:00:43] Posted by Neil Timmins and Iowa native who has been involved in over $300 million in real estate, right here in Iowa,

[00:00:51] recording in studio from West of Boy.

[00:00:54] Here's your host, Neil Timmins.

[00:00:57] I've got Jack Essir here on the show.

[00:00:59] Jack, welcome.

[00:01:00] Thanks, Dale. First time podcasting.

[00:01:02] So I hope you're ending skills are good.

[00:01:03] You're already a pro man.

[00:01:05] You're here.

[00:01:05] Welcome.

[00:01:06] Hey, say for the audience to say who are you from?

[00:01:08] Yeah, Jack Essir.

[00:01:09] grew up in Mays and city Iowa.

[00:01:11] And now work for Hickl construction.

[00:01:14] Handle our business development in central Iowa.

[00:01:17] Hickl construction.

[00:01:17] Give us a little background.

[00:01:18] What is Hickl construction?

[00:01:20] Yep.

[00:01:20] So we're a large general contractor.

[00:01:22] I've been around since 1892.

[00:01:26] Well, one time.

[00:01:27] So there actually had quartered in Mays and city where I grew up and then we've got names

[00:01:31] off it. So we kind of cover most of the state.

[00:01:34] So you grew up in Mays and city.

[00:01:36] What did you study?

[00:01:37] Guess what led up to starting with Hickl?

[00:01:40] So went to Iowa, had no idea what I wanted to do.

[00:01:43] New I wanted to do some with people.

[00:01:45] Probably sales related.

[00:01:46] My dad was an attorney.

[00:01:47] My brother was an attorney.

[00:01:48] And I was city wise there.

[00:01:50] New I did not want to go that route.

[00:01:52] So I just got a general business degree.

[00:01:55] I moved to Des Moines.

[00:01:56] Actually, he had worked for a large contractor and I'm city.

[00:01:59] He says a laborer worked on a lot of the cool university buildings there.

[00:02:03] They don't have a construction program in Iowa.

[00:02:06] Came here.

[00:02:07] Worked for staffing firm for a few years.

[00:02:09] Recruiting for contractors.

[00:02:11] And then I knew a few people at LMC insurance.

[00:02:15] My older brother was almost Murphy.

[00:02:17] And I was super competitive.

[00:02:20] So I couldn't want to go to the competitor in town.

[00:02:22] So I went there for about four years.

[00:02:26] And most of my clients were blue collar contractors.

[00:02:29] I was helping them with their benefits.

[00:02:31] Ironically, Hinkl will be in a Mason city.

[00:02:34] I had some other clients up there.

[00:02:35] All down there in every year they used the local broker up there.

[00:02:39] Appreciate the loyalty.

[00:02:40] About three years ago, they gave me a call and kind of flipped it on me.

[00:02:44] So today we know you're down to Moines.

[00:02:46] We've got this Central Iowa office.

[00:02:49] Would you want to handle our business development?

[00:02:51] And at the time I thought I'd be at the insurance broker's forever.

[00:02:54] We sold to a large firm and kind of thought about it.

[00:02:58] And it really decided me my hometown company growing in the Moines where I saved my wife and I

[00:03:03] are probably lifeers here.

[00:03:05] So chasing construction project is a little more fun than here's your 30% increase on your health insurance.

[00:03:13] So it's been great.

[00:03:14] So good tide of back home and it's been awesome.

[00:03:17] How many siblings do you have?

[00:03:18] Both a brother who just turned 40 and lives here in Moines.

[00:03:21] And then I've got a sister between us that lives out in Orange County.

[00:03:25] How close are you engaged to older brother?

[00:03:27] We are nine years apart.

[00:03:29] I got you just turned 40 and my sister is about to turn 39.

[00:03:33] So I'm the youngest.

[00:03:34] What was growing up in that family dynamic?

[00:03:36] How did that influence?

[00:03:37] How competitive you are?

[00:03:39] Maybe led you down the path of what you do today.

[00:03:41] Well, I'll say this.

[00:03:42] I'm sure my brother will listen to this but he's probably my he's my best friend and also my harshest critic.

[00:03:49] So someone had to ask a reference of me.

[00:03:51] I would give his name and they'd be like, well you can't give your brother.

[00:03:54] I'm like, well, you'll hear everything that is negative about me as well.

[00:04:00] So he's over at Olm's and loves it and it just kind of worked out that the competitor had an opening.

[00:04:05] And he was on the PNC side of the house and I was benefit.

[00:04:07] So I think we actually shared a client or two where they hired me on benefits and homes on the other side.

[00:04:13] So yeah, he's always been someone to look up to and we compete with each other on just about everything.

[00:04:18] So what did you learn from being a laborer at your, at your time there at the University of Iowa that you applied to your criminal?

[00:04:26] So I like to think of my current job and you know insurance, heads of similarities.

[00:04:31] I think of those as like difficult but not hard.

[00:04:35] So that's however you define it doing labor, which like our guys at Hinkle.

[00:04:39] We have a lot of guys that's so performer work.

[00:04:42] That is a hard job.

[00:04:43] I really respect it.

[00:04:45] So it's good now from my perspective being in the office selling our services.

[00:04:50] I know what we do out there and it, you know, just kind of grow some respect for that and put it in perspective.

[00:04:56] So what types of things do you guys construct?

[00:04:58] A little bit of everything.

[00:04:59] So we don't do any residential but I mean even I stopped my head right now.

[00:05:03] We're doing some work at a couple of Cino's, we built some banks.

[00:05:07] A lot of schools made in facilities warehouse.

[00:05:11] We do a lot of healthcare in Oregon, Iowa.

[00:05:13] A lot of industrial do a couple bridges a year.

[00:05:17] So we actually did that Iowa State bridge last year.

[00:05:20] So there's not much we've all looked at it.

[00:05:22] We've done a handful of historical deals too.

[00:05:25] We self-perform steel and pre-cast direction which not that many people do.

[00:05:29] So those are kind of slam dunk jobs for us.

[00:05:31] But it's not a whole lot we wouldn't look at and I think we're pretty good if we're not a fit that we'll let the honor know.

[00:05:37] We might not be a fit for this one.

[00:05:39] Yeah, but we're pretty well versed and stopped many industries we wouldn't look at.

[00:05:43] We're getting a spill.

[00:05:44] So I would say as sweet spot is two hours within either office.

[00:05:48] With that being said, we've had good clients over here that are large companies.

[00:05:52] And you know, I think we did a project in Louisiana a few years ago.

[00:05:56] And we've never client is we have that relationship.

[00:05:58] But for us with us self-performing work,

[00:06:01] we like our guys being home at night and it's just more cost-effective to be closer.

[00:06:06] So how much work do you guys self-perform and then why?

[00:06:10] I mean, why does someone hire you?

[00:06:12] And I suspect self-appointed a giant benefit for why somebody hire you versus, you know, hiring somebody else in the,

[00:06:19] a competitor if you will, they just use, you know, third party everything out.

[00:06:22] They sub it all.

[00:06:23] Yeah, I mean we do a lot of that work too.

[00:06:24] Sure.

[00:06:25] We're a CM on all of these things.

[00:06:26] Yeah, absolutely.

[00:06:27] You can't be able to be self-performing.

[00:06:28] You know, I think it's always been around for 132 years.

[00:06:30] So I think historically before you and I were alive, everybody self-perform, sure.

[00:06:36] And, you know, we own all of our own cranes in equipment.

[00:06:39] So from a pricing standpoint, that helps you need that equipment out there and I guys do it.

[00:06:44] But the self-perform aspect will do steel and pre-cast direction.

[00:06:47] We'll do some of our demo concrete doors and hardware.

[00:06:51] And then we've got a handful of carpenters too.

[00:06:53] So any job that includes those aspects of it are beneficial.

[00:06:57] I mean, from a pricing, a scheduling quality, it's our own guys doing it.

[00:07:02] You're not way not a sub or dealing with their pricing, it's our guys.

[00:07:06] So those jobs have been slave dumps for us.

[00:07:08] Are you mainly doing owner user, a construction job source, a number of investors putting up,

[00:07:14] you don't either spectral things, our guests custom buildings for their acquaintance?

[00:07:18] We've got some of that.

[00:07:19] We're doing some of that right now.

[00:07:20] A lot of it, though, is we've got a pretty good split of public and private.

[00:07:24] So you know, some of its municipalities or school districts, some of its huge private industrial company

[00:07:30] and some of it is private developers.

[00:07:32] So we're kind of sprinkled in all that.

[00:07:35] It just kind of depends who's building them what they're building their timeline works out and if for fit.

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[00:08:20] Okay, construction is coming to a halt.

[00:08:21] This is what I hear a lot.

[00:08:23] Is that 24 or everybody's going to run out the clock and what's in the pipeline and 25.

[00:08:28] There's like nothing but nothing.

[00:08:30] Nothing mean.

[00:08:30] A mere fraction compared to 24 and third-land year fractions compared to 23.

[00:08:36] Interest rates are having a dramatic impact on that along with costs.

[00:08:40] So I'm curious about the pipeline.

[00:08:41] What you're seeing, the conversation you're having with people, what's really happened in your guys' role?

[00:08:46] So I take actually last year when I've been our biggest year at Bicycle 23.

[00:08:51] Yep, and so for us, we don't have a ton of projects that are two to three years long.

[00:08:55] We're probably always looking six months out and then I take we've been fortunate, you know, even post-COVID to be in a good spot.

[00:09:02] And with us being in all different industries, get a lot of different abats.

[00:09:06] So I agree with what you're saying though, you know, I mean with a lot of architects, brokers, developers, bankers.

[00:09:13] I agree that's kind of the common theme.

[00:09:15] AIA puts on a report and I think architectural buildings have been down in the last 17 consecutive months,

[00:09:21] which that's kind of the trickle down is when we see their buildings down then I would soon ask the comments where the pipeline went up.

[00:09:27] Yep, going up. But like so we've been fortunate.

[00:09:29] You know, the private development stuff, interest rates are huge, but we work with some pretty large companies that's not necessarily

[00:09:36] affecting them. It's out of their pocket for their business needs. They need to expand or remodel and so those have kind of continued to go.

[00:09:44] But I will say there's a handful of things I've personally pursued that interest rate, they just can't pencil it out to make it make sense.

[00:09:52] And from our perspective, it's not our money we can't make you build it right. So construction costs.

[00:09:57] What do you see in your over year? And then where do you see things going in the next, you know, one to three years?

[00:10:02] So I'm probably not the most qualified to speak out of this. We've got a whole pre-contain that's all they do in this or a master of it.

[00:10:09] But from talking to them, I think, you know, COVID prices were up. It feels like they've leveled off.

[00:10:14] They're never going to go back to pre-covid pricing but from talking internally, it seems like it's kind of leveled off and it is what it is now.

[00:10:22] Hardest part about dealing with an owner and I guess taking a project start to finish including planning it, planning with somebody who was an owner user all the way to actually, you know,

[00:10:32] you hang it over the cheese. Yep. So I'm heavily involved in the front and I'm the world trying to, you know, find the deal and make sure that

[00:10:39] Hinkles well suited to have a chance to build it after that. You know, we've got a great team with a lot of experience that I'm kind of handing it off at that point

[00:10:47] But, you know, any industry, any project, stuff's going to come up and I think though, guys, a Hinkle do a great job of when that stuff comes up, you know,

[00:10:56] we're set at the table, the same side with you trying to figure out how to get past this and make a work and with all the different industries ran

[00:11:03] There's so many different, you know, red tape you have to go through or you work with some private developer that it's him, his money

[00:11:10] No board to go through no nonprofit. So it's every project has been different for us, I think.

[00:11:16] The hottest industry. So why are the all the sectors that you're involved in?

[00:11:20] Which ones most active now and then which one is least active?

[00:11:23] Oh, okay. Most active. I feel like we've always got a handful of industrial jobs going, you know, not necessarily brand new facility

[00:11:32] Because you don't just go vertical. You'll go land it. So we kind of like the dirty jobs. You know, we sell perform demos

[00:11:39] So you want to go to building and redo it. We'll do it. You know, we're looking out a few things right now that are 20 million bucks

[00:11:45] But they're only adding on 20% of the building sure 80 of it's being gutted

[00:11:50] And we work with a lot of healthcare where they got to remain operational the whole time.

[00:11:55] So there's been a handful of big medical jobs coming that we're on a list for that. I don't necessarily want to disclose because the updates made decided

[00:12:02] But those couple big jobs there, we pursued some ag jobs recently, but I feel like that's kind of taking the downturn

[00:12:10] Done a handful of churches now. If it kind of popped up, schools always seem to have something going on

[00:12:20] It's hard to know, you know, you can look at an industry about how do you know that ABC business is doing well in these

[00:12:27] It's a girl sure because someone else's their competitor might be having an awful year and has no money to expand

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[00:13:06] You get to see a lot of things in your world given the fact that you're not just into a singular industry

[00:13:11] There's don't build x, right?

[00:13:13] You get to see a lot of what takes place.

[00:13:15] And imagine that versatility in what you've done in the past, certainly from the insurance company

[00:13:19] Talking to so many contractors and seeing a variety of contractors has helped you

[00:13:27] In talking to the variety of business owners and people with different needs and wants

[00:13:31] It what you do today.

[00:13:32] I've kind of had an interesting career path but they've all overlapped in one way

[00:13:37] And you're from Iowa, it's a small state and it's all

[00:13:42] Relationship based and people want to work with good people that care about them

[00:13:46] And they're not doing it to just make a buck

[00:13:48] And that's kind of how I was going to even take the call from Hinkle

[00:13:51] You're on up there. I knew they had a great reputation

[00:13:53] And do things the right way.

[00:13:55] So taking a little bit from each job at some of my dad

[00:13:58] I always told me to no matter what you're doing

[00:14:00] You might not be there forever but get something out of it

[00:14:04] Both my previous employers made life long for a doubt of it

[00:14:07] Great experiences took some from each of it

[00:14:10] Stay in touch with them and now I've been using it for a take-old

[00:14:13] There's a lot of overlap. I'm not talking about insurance anymore

[00:14:15] But if it's still some of the same context I had and they know that

[00:14:18] I'd try to do things the right way for him

[00:14:20] For you, why are you? Why are you?

[00:14:21] You get sell anywhere if you so choose why you're

[00:14:25] It's good question. I think right after college my sister was already out in Orange County

[00:14:29] And I was kind of thinking maybe I just go somewhere for a few years

[00:14:32] But thought about it and I don't know. I just I love I will obviously grew up here

[00:14:36] My Thai family's here my brother lives five minutes from me and as four little kids

[00:14:42] My wife teaches in Wauke and loves it

[00:14:44] She wants to stay in Iowa up until a few years ago had grandparents up in Mesa City

[00:14:49] Parents are still there, you know quick to our drive you can find anywhere

[00:14:52] It's great. I don't see myself ever believe in itself

[00:14:56] Jack, you ready for the final three questions. Nice to close

[00:15:00] If you had one piece of advice for your twenty year old self, what would it be?

[00:15:05] I'll keep you short. I would say enjoy the ride

[00:15:07] When I was twenty I had no idea what the hell I wanted to do

[00:15:11] And every step I've taken has been awesome. You stress about things

[00:15:15] And if you look back it pride and matter that much

[00:15:18] It's the end goal and enjoying the ride there

[00:15:20] And I think of sales too now I'm going on nine years of being in sales

[00:15:25] It's a roller coaster and I've always not tried to get too high

[00:15:29] If I get a winner picked up a new client

[00:15:31] I'm like that's my job and if we miss out on something

[00:15:34] It was probably out of our control and so why get down on yourself

[00:15:38] So I think you just kind of enjoy the whole process of it

[00:15:41] Two books that change your life

[00:15:43] I do you're going to ask this and I can think of one book

[00:15:47] If for sure as a lot of dust on it, tools of titans is Tim Ferriss

[00:15:51] Oh yeah

[00:15:52] So every chapter was with somebody that's been successful

[00:15:55] Dr. Billionaire, professional athlete and he tries to kind of pull bits of pieces of

[00:16:01] But each of them done and I think taking it from that

[00:16:04] It was something like there's no exact formula to success

[00:16:08] And I'm not saying I've been successful

[00:16:10] But I've liked what I've been doing and how I got there is that

[00:16:13] When I was twenty I would have had no idea that would be working for my

[00:16:17] All-time company here in DuMoint

[00:16:19] There's an exact formula you just kind of roll up the punches and make it worth

[00:16:23] So if you were cast away in an island for a year

[00:16:26] You could only get three pieces of data about your business

[00:16:28] Each and every month what three things must do now

[00:16:30] So this is the determine how canclet would be done

[00:16:34] Yep probably a phone number from someone I work with

[00:16:38] The AA report I think is pretty good initial forecast of what's going on

[00:16:43] And then also I mean just local news you've read about what's going on

[00:16:47] And for my sake if you read about it in the register on Facebook

[00:16:51] I'm probably eight months to a year to late

[00:16:54] But in terms of Fama and I went and you did all hinkles doing

[00:16:58] Checking the cool things that are coming to town would be good sir

[00:17:02] What are you most excited about next year?

[00:17:04] I'm still optimistic you know he goes been around that long

[00:17:07] It's not by accident. They've always find a way and

[00:17:10] I'm on the front end so I'm still talking to people that have pretty cool ideas

[00:17:13] And what they want to do now if that pencil is out and they have the money great

[00:17:17] But it's still exciting to see people's ideas around here

[00:17:22] And what the morning could be I mean I haven't even been here quite a decade yet

[00:17:26] And it's crazy how much has changed

[00:17:29] Yeah, check last few lots of questions

[00:17:32] What's one question I did not ask that I should have asked?

[00:17:36] Maybe best and worst part of my job

[00:17:38] Well still it best there's probably a few things

[00:17:41] I like pursuing a conceptual projects

[00:17:43] The team we have is great you know

[00:17:45] I'm on the front end but it's the back end that does all the work

[00:17:48] You know it's great if I can get us a job

[00:17:51] But they're still all that other team involved that does the heavy lifting to make a project go

[00:17:57] Worst sometimes you can put yourself in a great position and you still don't get it

[00:18:03] And like I mentioned earlier

[00:18:04] I can't make someone go spend 15 million bucks to build something

[00:18:09] I can try to make sure that we're in a good position if it when it happens

[00:18:13] But that's why I try not to ride the roller coaster because some of it's out of our control

[00:18:18] You know there's relationships that might have been there long before us

[00:18:21] So all we hope for is a sheet up the table and that back because I think we put ourselves up again setting body

[00:18:27] For people who want to find you they want to follow you

[00:18:30] They want to connect with you where can they go what should they do

[00:18:32] So hinkle construction.com we actually just re-did our website

[00:18:36] I believe myself on numbers on the website because I get a lot of spam calls

[00:18:41] So if you need to find me you can easily find myself on there

[00:18:44] Otherwise I'm on LinkedIn and the work so otherwise I'm out in about all the time

[00:18:49] So perfect links are below on the show notes everybody Jack I appreciate being here

[00:18:52] Thanks for having me. It was awesome. Thanks for listening

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[00:19:36] Until next time keep investing in Iowa