WEBVTT 00:00:00.000 --> 00:00:03.060 Ever wonder what really happens behind the scenes 00:00:03.060 --> 00:00:05.400 in construction, real estate and development? 00:00:06.059 --> 00:00:08.220 We pull back the curtain on the new home construction 00:00:08.220 --> 00:00:11.060 industry, the real estate market and the trends 00:00:11.060 --> 00:00:14.099 shaping it all. Discover the stories, insights 00:00:14.099 --> 00:00:16.239 and expertise behind the process of building 00:00:16.239 --> 00:00:19.640 a new home. Join us for Trust the Process podcast 00:00:19.640 --> 00:00:22.579 and let's build something great together. Welcome 00:00:22.579 --> 00:00:24.980 back to Trust the Process, the podcast where 00:00:24.980 --> 00:00:27.660 we talk about the real estate industry, new home 00:00:27.660 --> 00:00:31.250 construction. and everything in between. I'm 00:00:31.250 --> 00:00:34.710 Krista joined again by Michael and today we want 00:00:34.710 --> 00:00:37.049 to kind of wanted to look at some of the things 00:00:37.049 --> 00:00:39.670 that might shock you about building a new home. 00:00:39.969 --> 00:00:42.850 Things that you may or may not realize or maybe 00:00:42.850 --> 00:00:46.929 the sticker shock. Sticker shock. Yeah. High 00:00:46.929 --> 00:00:49.170 and low sticker shock. Both ends of it. Yes. 00:00:49.250 --> 00:00:51.409 So sticker shock. Didn't know that cost that 00:00:51.409 --> 00:00:53.250 much or gosh I would expect that to cost more. 00:00:53.289 --> 00:00:55.570 So some of those things that might surprise you. 00:00:55.710 --> 00:00:58.320 Hopefully we can Show you some things you didn't 00:00:58.320 --> 00:01:00.539 know. Let's do three on the high side and three 00:01:00.539 --> 00:01:03.520 on the low side. This is apropos to what I've 00:01:03.520 --> 00:01:07.079 been doing the last three or four days. I've 00:01:07.079 --> 00:01:10.120 been going through every project that are near 00:01:10.120 --> 00:01:14.500 completion. This is landing way higher than one 00:01:14.500 --> 00:01:16.879 project in the northwest part of town that's 00:01:16.879 --> 00:01:19.780 way over budget and just a disaster of a spreadsheet. 00:01:20.629 --> 00:01:23.150 and the comps aren't there to support. It's going 00:01:23.150 --> 00:01:24.790 to be a challenge. It's a beautiful house though. 00:01:24.829 --> 00:01:26.349 It might be a disaster of a spreadsheet, but 00:01:26.349 --> 00:01:28.709 it is not a disaster of a home. That's probably 00:01:28.709 --> 00:01:31.189 why it's a beautiful home because I built it 00:01:31.189 --> 00:01:33.409 as if it would be a $2 million or $2 .2 million 00:01:33.409 --> 00:01:36.650 home and it's just a small version of a $2 .2 00:01:36.650 --> 00:01:39.109 million home. So can that area support a $900 00:01:39.109 --> 00:01:41.049 ,000 value? I don't know. We're going to find 00:01:41.049 --> 00:01:44.709 out together and we'll have to kind of maybe 00:01:44.709 --> 00:01:48.980 check in on that after. I like to look at things 00:01:48.980 --> 00:01:52.879 as a percentage of the value of the home, not 00:01:52.879 --> 00:01:55.159 the value of the entire, or the cost of the entire 00:01:55.159 --> 00:01:57.680 project. I look at it, I'm basically creating, 00:01:57.760 --> 00:01:59.719 let's take a house in South Shore Lake, Las Vegas. 00:01:59.879 --> 00:02:02.840 We're creating a $2 million home. So then this 00:02:02.840 --> 00:02:05.180 line item is what percentage of that end of day. 00:02:05.659 --> 00:02:09.180 And I kind of took that and said, okay, what 00:02:09.180 --> 00:02:11.479 percentage would shock people to say, I'm building 00:02:11.479 --> 00:02:14.979 a $2 million home. but this big thing only cost 00:02:14.979 --> 00:02:17.460 2 % of the entire budget. Holy cow, I thought 00:02:17.460 --> 00:02:21.000 it'd be way more than that. Conversely, oh my 00:02:21.000 --> 00:02:22.780 god, this thing that I didn't even know was a 00:02:22.780 --> 00:02:27.060 cost center is 10 % of the budget. Holy cow, 00:02:27.080 --> 00:02:30.099 that's just insane. So, I don't have an example 00:02:30.099 --> 00:02:32.639 of that, Egregious, where something you didn't 00:02:32.639 --> 00:02:35.680 even know was a line item is that high of a percentage, 00:02:36.240 --> 00:02:38.620 but I wanna start with the bad news first. So, 00:02:38.759 --> 00:02:40.879 things that... still give me sticker shock to 00:02:40.879 --> 00:02:44.419 this day, and I know would give a newbie or a 00:02:44.419 --> 00:02:47.039 person building their own custom home, a sticker 00:02:47.039 --> 00:02:49.900 shock, would be the design and engineering. You 00:02:49.900 --> 00:02:51.439 just don't realize, we've kind of talked about 00:02:51.439 --> 00:02:54.199 this in the past, but you just don't realize 00:02:54.199 --> 00:02:57.120 how much the architect, the mechanical engineer, 00:02:57.180 --> 00:02:59.219 the electrical and plumbing, the structural, 00:02:59.539 --> 00:03:03.639 calcs, the trust design, all those things that 00:03:03.639 --> 00:03:06.780 kind of come in to play before you even move 00:03:06.780 --> 00:03:10.099 your first speck of dirt. And then ongoing inspections 00:03:10.099 --> 00:03:13.819 after that, third party QAA as we call it, so 00:03:13.819 --> 00:03:16.340 we might have to have our soil inspected after 00:03:16.340 --> 00:03:18.840 we excavate and we can re -compact. Those are 00:03:18.840 --> 00:03:21.740 called lifts. You know, we have to have that, 00:03:22.120 --> 00:03:25.020 a boring sample done and all the front end work 00:03:25.020 --> 00:03:27.539 before you break ground. So just when you consider 00:03:27.539 --> 00:03:31.669 all of that, when you factor in... everything 00:03:31.669 --> 00:03:34.430 that is not related to actually building the 00:03:34.430 --> 00:03:36.629 house but is related to the design and engineering 00:03:36.629 --> 00:03:39.650 and quality of the home it ends up being on the 00:03:39.650 --> 00:03:41.949 order of an average two million dollar home and 00:03:41.949 --> 00:03:43.849 it ends up being on the order of around seventy 00:03:43.849 --> 00:03:46.550 five thousand dollars so that quick math that's 00:03:46.550 --> 00:03:49.909 around four percent of the end -of -day sales 00:03:49.909 --> 00:03:53.319 price of the home goes to the paper that the 00:03:53.319 --> 00:03:55.199 home is designed on. It goes to the third party. 00:03:55.199 --> 00:03:56.919 And nothing tangible that at the end of the process 00:03:56.919 --> 00:03:59.199 anybody could say, and here's my, you know, there 00:03:59.199 --> 00:04:01.740 isn't anything to, yeah. And every jurisdiction 00:04:01.740 --> 00:04:04.199 has different requirements. Some jurisdictions 00:04:04.199 --> 00:04:06.560 have a requirement that if it's under 3 ,000 00:04:06.560 --> 00:04:08.259 square feet, it doesn't need a structural engineer. 00:04:08.340 --> 00:04:10.439 You can follow standard details. Not every city 00:04:10.439 --> 00:04:13.900 has these requirements. Some cities, novel concept, 00:04:14.379 --> 00:04:18.199 let you do, let your professional... electrician 00:04:18.199 --> 00:04:21.459 lay out and and vote out your home to say okay 00:04:21.459 --> 00:04:23.660 the load calcs are this and this for this do 00:04:23.660 --> 00:04:26.040 we really need to spend no offense to Mariana 00:04:26.040 --> 00:04:28.120 engineering do we need to spend six to seven 00:04:28.120 --> 00:04:30.639 thousand dollars calcing that house out when 00:04:30.639 --> 00:04:33.019 we don't even follow the plans anyway we don't 00:04:33.019 --> 00:04:35.300 follow the plans anyway we don't follow exactly 00:04:35.300 --> 00:04:37.720 every single outlet we add a lot of things we 00:04:37.720 --> 00:04:39.579 do a framing walk even on a home that's not sold 00:04:39.579 --> 00:04:41.600 I do a framing walk with the electrician to say 00:04:41.600 --> 00:04:44.819 add a box here add this here do this Let's upgrade 00:04:44.819 --> 00:04:47.759 it in the box here, add this here, do this. Let's 00:04:47.759 --> 00:04:49.980 upgrade it in this way. So we don't follow it 00:04:49.980 --> 00:04:50.500 anyway. And there's just things that you can't 00:04:50.500 --> 00:04:52.079 know until you're standing in the home. We talked 00:04:52.079 --> 00:04:53.759 about that last time you came. Gallery lighting. 00:04:53.819 --> 00:04:55.240 You can't feel where lighting should be until 00:04:55.240 --> 00:04:57.040 you're actually in the flow. It's different on 00:04:57.040 --> 00:04:59.259 paper sometimes. It is. And a lot of times your 00:04:59.259 --> 00:05:02.279 engineer just kind of plots it out. Okay, four 00:05:02.279 --> 00:05:03.759 -can lights in every room and they just kind 00:05:03.759 --> 00:05:06.100 of figure it all out. Slightly over to be right 00:05:06.100 --> 00:05:11.040 above the... Yeah, exactly. Those are things 00:05:11.040 --> 00:05:14.000 that still surprise me, and no matter how much 00:05:14.000 --> 00:05:16.279 replication we try to do with our standard floor 00:05:16.279 --> 00:05:19.079 plans, there's still a cost. Even replotting 00:05:19.079 --> 00:05:21.360 a home and changing the title block and changing 00:05:21.360 --> 00:05:24.459 the address and showing how it sits on that particular 00:05:24.459 --> 00:05:27.079 site, it's still a $15 ,000. By the time it's 00:05:27.079 --> 00:05:30.920 all said and done, to add up another $5 ,000 00:05:30.920 --> 00:05:32.899 for quality assurance engineering for the actual 00:05:32.899 --> 00:05:35.540 site -specific conditions, you're at $20 ,000 00:05:35.540 --> 00:05:38.279 on a plan that we've built six times. It just... 00:05:38.269 --> 00:05:41.509 To me, that's sticker shock. Topic of the conversation. 00:05:42.250 --> 00:05:44.769 Whether we could do an entire episode on arguing 00:05:44.769 --> 00:05:46.069 whether or not we should be doing those things 00:05:46.069 --> 00:05:47.670 or whether or not those things are needed. I 00:05:47.670 --> 00:05:49.689 do find it interesting that not every jurisdiction 00:05:49.689 --> 00:05:52.709 requires it, so why do some and not others? I 00:05:52.709 --> 00:05:56.129 can't find a reasoning behind that. You know, 00:05:56.170 --> 00:05:58.310 we have something on certain permits, standard 00:05:58.310 --> 00:06:00.750 details. So you don't have to get a soils test 00:06:00.750 --> 00:06:02.509 to do an ingrown pool. You don't have to do a 00:06:02.509 --> 00:06:06.670 soils test for a wall, especially a fence. I 00:06:06.670 --> 00:06:08.509 mean, if you want to do a retaining wall. There 00:06:08.509 --> 00:06:11.730 are standard details, though, for Nevada soil. 00:06:12.490 --> 00:06:14.550 So I just find that interesting that we don't 00:06:14.550 --> 00:06:19.370 have that for a home and why that's so cost prohibitive 00:06:19.370 --> 00:06:23.089 to do it that way. So that's sticker shock number 00:06:23.089 --> 00:06:26.410 one. So that would kind of be the design and 00:06:26.410 --> 00:06:28.209 engineering piece of it. Yeah, I kind of lumped 00:06:28.209 --> 00:06:30.689 those together. A lot of third party stuff are 00:06:30.689 --> 00:06:32.250 engineering firms, so they're going to come out 00:06:32.250 --> 00:06:34.310 and do the sample, the soil, and make sure they're 00:06:34.310 --> 00:06:36.990 compacting. So since it goes to a company that 00:06:36.990 --> 00:06:38.470 has engineering in the name, I call it engineering. 00:06:39.069 --> 00:06:41.930 So that's sticker shock number one. At what number 00:06:41.930 --> 00:06:47.509 again? Around 4%. That number changes as you 00:06:47.509 --> 00:06:50.410 get a bigger home. It might start to dwindle 00:06:50.410 --> 00:06:54.170 or diminish. a topic we talked about a couple 00:06:54.170 --> 00:06:56.850 weeks ago was why it's so much riskier to build 00:06:56.850 --> 00:06:59.490 entry -level housing because that design and 00:06:59.490 --> 00:07:01.949 engineering becomes 10 % of it. If you're trying 00:07:01.949 --> 00:07:06.350 to build something for 450 ,000, what engineer, 00:07:06.490 --> 00:07:08.129 what firms, how are you gonna get all your engineering 00:07:08.129 --> 00:07:12.420 done inside 45? You can, but it's just. Challenging 00:07:12.420 --> 00:07:14.560 you have to start replicating and then getting 00:07:14.560 --> 00:07:17.519 those costs down on each individual home You're 00:07:17.519 --> 00:07:18.699 still gonna have probably ten thousand dollars 00:07:18.699 --> 00:07:20.879 on each individual home still a big line item 00:07:20.879 --> 00:07:23.439 So you only get that percentage down on an entry 00:07:23.439 --> 00:07:25.699 -level home by replication That's why there's 00:07:25.699 --> 00:07:28.139 not so there's not many unique entry -level homes 00:07:28.139 --> 00:07:30.120 when you drive through drive through neighborhoods 00:07:30.120 --> 00:07:32.579 that are entry -level or mid -market There's 00:07:32.579 --> 00:07:35.160 a lot of replication. That's just you could not 00:07:35.160 --> 00:07:38.319 have that kind of money spent on on a $500 ,000. 00:07:38.439 --> 00:07:40.540 It has to be. It has to be a simple shape. It 00:07:40.540 --> 00:07:42.680 has to be a simple floor plan. It has to be a 00:07:42.680 --> 00:07:45.879 pad. It has to be poured in a simple square rectangular 00:07:45.879 --> 00:07:52.560 shape. So that's 4%. What else would you shock 00:07:52.560 --> 00:07:56.079 us with? I would say permitting to me is a shock. 00:07:56.240 --> 00:07:59.339 Not in terms of a percentage, but just how much 00:07:59.339 --> 00:08:01.600 a building permit and impact fees and plan check 00:08:01.600 --> 00:08:05.680 fees can add up. for the average home. They go 00:08:05.680 --> 00:08:07.860 off of size and fixture count and things like 00:08:07.860 --> 00:08:09.759 that. But at the end of the day, it's going to 00:08:09.759 --> 00:08:11.899 be hard to get a permit and all the accessory 00:08:11.899 --> 00:08:16.000 fees done for under $15 ,000. So nothing less 00:08:16.000 --> 00:08:18.180 than probably seven and maybe nothing more than 00:08:18.180 --> 00:08:21.079 around 20. But to me, that is a lot of money. 00:08:21.240 --> 00:08:24.120 that changes per home? Or is that just as a standard? 00:08:24.120 --> 00:08:27.240 It changes in terms of the fixture count. It 00:08:27.240 --> 00:08:29.680 changes in terms of the size. But it's incremental. 00:08:29.939 --> 00:08:32.179 A standard permit has X number of dollars. A 00:08:32.179 --> 00:08:34.080 plan check fee is usually always, let's say, 00:08:34.320 --> 00:08:37.220 $1 ,500. It's just the raw cost of it. All those 00:08:37.220 --> 00:08:40.179 jurisdiction -related fees that don't really 00:08:40.179 --> 00:08:43.580 go anywhere, they don't go into the home, it's 00:08:43.580 --> 00:08:46.740 just the city allowing you to build. Now, I'm 00:08:46.740 --> 00:08:48.720 not going to go down that rabbit hole of trashing 00:08:48.720 --> 00:08:52.080 the fees because I do know that that's a big 00:08:52.080 --> 00:08:53.840 revenue source for cities that are growing and 00:08:53.840 --> 00:08:56.820 it represents the fact that the city is growing, 00:08:57.100 --> 00:08:58.419 therefore our maintenance costs are going to 00:08:58.419 --> 00:09:00.320 be higher and I understand there's a calculus 00:09:00.320 --> 00:09:04.259 that goes into that. And those permit fees pay 00:09:04.259 --> 00:09:06.379 for your inspections. So if you're spending, 00:09:06.779 --> 00:09:09.909 let's say, $2 ,000 ,000 or $4 ,000 square foot 00:09:09.909 --> 00:09:12.190 home, a permit with a plan check and everything 00:09:12.190 --> 00:09:15.490 is impact fees around $15 ,000. So yeah, not 00:09:15.490 --> 00:09:17.830 a huge percentage of the budget, not even, or 00:09:17.830 --> 00:09:20.350 the end of day value of the home, maybe about 00:09:20.350 --> 00:09:24.230 .75%. But to me, that just seems like a strikingly 00:09:24.230 --> 00:09:26.570 big number. And anyone I've worked with on the 00:09:26.570 --> 00:09:28.870 build the suit side, if I've had a client that 00:09:28.870 --> 00:09:32.509 came to me to build them a home, the permit just 00:09:32.509 --> 00:09:35.110 shocked them. They just weren't prepared that 00:09:35.110 --> 00:09:37.269 a permit would cost that much money. And it's 00:09:37.269 --> 00:09:39.370 a good point because kind of what do you get 00:09:39.370 --> 00:09:42.009 for that, right? I mean you get permission to 00:09:42.009 --> 00:09:43.429 build. You get permission to build. But you also 00:09:43.429 --> 00:09:44.970 get the inspections. You get the inspections. 00:09:44.970 --> 00:09:47.129 So there is a labor. There is a cost to the city. 00:09:47.730 --> 00:09:49.889 There's about, in our jurisdiction, about $1 00:09:49.889 --> 00:09:53.009 ,500 worth of plan check. So I get that, that 00:09:53.009 --> 00:09:57.409 they're kind of auditing the plans for code. 00:09:58.090 --> 00:10:02.340 So, and then the engine. city inspector is auditing 00:10:02.340 --> 00:10:04.600 the bill to the plans. It's just kind of cascades 00:10:04.600 --> 00:10:06.840 down. That being said, the amount of deviation 00:10:06.840 --> 00:10:09.779 away from the plans and the amount of things 00:10:09.779 --> 00:10:12.039 that are either not caught in plan check or called 00:10:12.039 --> 00:10:15.159 out as simple labeling conventions is astounding, 00:10:15.220 --> 00:10:17.379 kind of like a job justification. It feels like 00:10:17.379 --> 00:10:18.980 I'll have to find something in this plan because 00:10:18.980 --> 00:10:21.519 I have to justify the fact that I'm, you know, 00:10:21.659 --> 00:10:24.779 getting $1 ,500 per plan to audit set plans for 00:10:24.779 --> 00:10:27.600 code. And if you're right. So I do think that 00:10:27.600 --> 00:10:30.120 there's a lot of kind of overlap there that might 00:10:30.120 --> 00:10:32.820 be unnecessary. But if they don't have a value 00:10:32.820 --> 00:10:36.179 add, then it's harder to justify those fees without 00:10:36.179 --> 00:10:38.620 calling them just flat out impact fees. I mean, 00:10:38.620 --> 00:10:40.320 they could just do that and just say it's $10 00:10:40.320 --> 00:10:42.860 ,000 impact fee because you're adding a rooftop 00:10:42.860 --> 00:10:45.419 to our city. I'm not going to mention that they 00:10:45.419 --> 00:10:49.159 get to tax it forever. Yeah, that's true. They're 00:10:49.159 --> 00:10:51.419 getting a tax on it, but it's okay. I'm double 00:10:51.419 --> 00:10:54.019 dipping a little bit, but that's we've created 00:10:54.019 --> 00:10:57.700 a model of growth that is really throws a lot 00:10:57.700 --> 00:11:00.769 of the weight on the individual cities and counties 00:11:00.769 --> 00:11:03.330 to maintain those roads and the stir affairs 00:11:03.330 --> 00:11:06.149 and schools and there's a lot of strain that 00:11:06.149 --> 00:11:09.710 comes in you know it's a city and a jurisdiction 00:11:09.710 --> 00:11:12.610 is a business too so I give them grace on that 00:11:12.610 --> 00:11:14.710 but it's to me it's a sticker shock so I'm not 00:11:14.710 --> 00:11:16.750 indicating that it'd be lower but you know it's 00:11:16.750 --> 00:11:18.649 and then there's also the cost of just running 00:11:18.649 --> 00:11:22.129 the building department which a department that 00:11:22.129 --> 00:11:32.029 I love so much. Okay, so that's one. Okay, so 00:11:32.029 --> 00:11:34.990 that's two. What would be the third sticker shop? 00:11:34.990 --> 00:11:37.669 I'd say the best for last. I sandwich permitting 00:11:37.669 --> 00:11:39.710 in the middle. Don't get me wrong, there's a 00:11:39.710 --> 00:11:41.210 lot of things that would probably shock a lot 00:11:41.210 --> 00:11:44.610 of home buyers or bill to suit clients to say, 00:11:44.710 --> 00:11:47.250 oh that seems more. I just picked either the 00:11:47.250 --> 00:11:52.190 highest percentage or the most surprising. So 00:11:52.190 --> 00:11:55.710 the third one, is exteriors, not the exterior 00:11:55.710 --> 00:11:58.710 of the house, but the exterior. Now, we have 00:11:58.710 --> 00:12:01.970 a bit of a skewed lens because we build custom 00:12:01.970 --> 00:12:05.009 homes, completely move -in ready. 99 % of our 00:12:05.009 --> 00:12:08.759 builds have... pools and spas and outdoor kitchens 00:12:08.759 --> 00:12:11.919 and fully landscaped backyards. And we obviously 00:12:11.919 --> 00:12:14.940 fence everything and build stucco block walls 00:12:14.940 --> 00:12:18.519 and cap them and build view fencing. And we developed 00:12:18.519 --> 00:12:22.460 the entire lot. So my lens is a little skewed 00:12:22.460 --> 00:12:24.779 on that, but we haven't, I've done other projects 00:12:24.779 --> 00:12:28.580 where we haven't and the exterior spend is always 00:12:28.580 --> 00:12:31.820 higher than you expect. So on one of our customs 00:12:31.820 --> 00:12:34.379 that sells for around $2 million, if it has a 00:12:34.379 --> 00:12:38.860 pool and most do. 10 % or more of my budget is 00:12:38.860 --> 00:12:41.600 just the outside. The driveway, the back patio 00:12:41.600 --> 00:12:45.379 pavers, the pool, the spa. 10%. 10%. So we're 00:12:45.379 --> 00:12:49.700 around $210 ,000, $215 ,000 on a $2 million home 00:12:49.700 --> 00:12:52.580 for the outside. Yeah. The fence, the landscape. 00:12:52.799 --> 00:12:56.860 Right, hardscape. Hardscape and pool. And a pool. 00:12:57.240 --> 00:13:01.149 So. We're spending, at our cost, we build pools 00:13:01.149 --> 00:13:03.370 at our own cost, and we're spending around $90 00:13:03.370 --> 00:13:06.590 ,000 just in hard costs. Equipment, excavation, 00:13:06.870 --> 00:13:09.509 gun ice. I mean, we do a nice, we upgrade a lot 00:13:09.509 --> 00:13:11.570 of things. They're all smart pools and telecenter 00:13:11.570 --> 00:13:14.649 run by your phone. But even if I were to trim 00:13:14.649 --> 00:13:16.289 it down to bare bones, I'd still be spending 00:13:16.289 --> 00:13:19.330 in the 70s, probably 71, 72, probably around, 00:13:19.330 --> 00:13:20.649 I would say, 75 ,000. I don't think you could 00:13:20.649 --> 00:13:23.370 put a pool in anymore for under 70, and that's 00:13:23.370 --> 00:13:25.649 just a basic hole in the ground. Yeah, exactly. 00:13:25.809 --> 00:13:27.409 There's things you could cut, you could not heat 00:13:27.409 --> 00:13:29.009 it, and you could probably get those numbers 00:13:29.009 --> 00:13:31.330 down, but it just seems like once you move your 00:13:31.330 --> 00:13:34.850 shovel, just figure $70 ,000 and then go up from 00:13:34.850 --> 00:13:37.370 there. And that's our cost. That's not a company 00:13:37.370 --> 00:13:40.590 being greedy. That's us paying the excavator, 00:13:40.710 --> 00:13:43.559 us paying the ... the rebar people. That's paying 00:13:43.559 --> 00:13:45.860 the pool plumbers directly. So those are our 00:13:45.860 --> 00:13:47.759 costs. I'm talking about pulling back the curtain. 00:13:47.840 --> 00:13:50.460 I mean, that shows you. Those are our true costs. 00:13:50.600 --> 00:13:52.799 That's what we're spending on a pool. And 10 00:13:52.799 --> 00:13:55.799 years ago, companies were retailing pools for 00:13:55.799 --> 00:13:58.879 $40 ,000. Isn't that crazy? It's crazy. And there 00:13:58.879 --> 00:14:01.440 is a recession in the pool building industry. 00:14:01.639 --> 00:14:04.590 So I don't know if... Some of those costs might 00:14:04.590 --> 00:14:06.889 come down. I don't know, but you hear you talk 00:14:06.889 --> 00:14:09.250 to pool companies anymore and sometimes it's 00:14:09.250 --> 00:14:11.570 a little slow. Business isn't what it used to 00:14:11.570 --> 00:14:14.750 be. Yeah. And this is Las Vegas. Everybody wants 00:14:14.750 --> 00:14:17.250 a pool, so you can imagine that there isn't a 00:14:17.250 --> 00:14:19.450 desire. There's not a demand in terms of people 00:14:19.450 --> 00:14:21.970 that can afford it, but there's a desire for 00:14:21.970 --> 00:14:23.690 it. Right. They kind of price themselves out 00:14:23.690 --> 00:14:26.129 of the market for a while. I wonder. Yeah. It's 00:14:26.129 --> 00:14:28.450 not a depression, but it's definitely a pool 00:14:28.450 --> 00:14:30.669 recession. So it's been good for us. We're able 00:14:30.669 --> 00:14:34.529 to schedule our people. It's much easier to keep 00:14:34.529 --> 00:14:37.509 a pool going. Our in -house person who manages 00:14:37.509 --> 00:14:39.409 it all, I know she can get a pool done in about 00:14:39.409 --> 00:14:42.669 eight weeks, which is crazy. So we kind of line 00:14:42.669 --> 00:14:44.990 it up with the last 12 weeks of construction 00:14:44.990 --> 00:14:46.750 of the home. We kind of work backwards from there. 00:14:46.830 --> 00:14:49.289 So we don't have too much, number one, cost outlay. 00:14:49.389 --> 00:14:51.210 Right. And people aren't on top of each other. 00:14:51.210 --> 00:14:53.889 Exactly. We want the outside done ideally as 00:14:53.889 --> 00:14:56.009 much as possible. and then as we're finishing 00:14:56.009 --> 00:14:58.289 the inside, we're getting the pool going. Exactly, 00:14:58.409 --> 00:15:00.009 because you can imagine if the scaffolding were 00:15:00.009 --> 00:15:02.149 up for the stucco or the exterior, and you've 00:15:02.149 --> 00:15:04.250 got a pool, you know, putting it back there, 00:15:04.330 --> 00:15:07.009 somebody trying to dig a hole. You have to manage 00:15:07.009 --> 00:15:09.149 those things in a way that lines up. Yeah, get 00:15:09.149 --> 00:15:12.330 the outside down. Okay, so those are the top 00:15:12.330 --> 00:15:16.549 three. So quick wrap up the design and engineering. 00:15:17.360 --> 00:15:20.899 the permitting and fees and impact fees, and 00:15:20.899 --> 00:15:23.659 then the outside, the hardscape and landscape 00:15:23.659 --> 00:15:27.759 on the exterior. And even a basic, we have a 00:15:27.759 --> 00:15:29.820 six -home project coming that I have no intention 00:15:29.820 --> 00:15:33.759 of building out the backyards. And just the driveways 00:15:33.759 --> 00:15:36.059 and the back patio still will have pavers. It 00:15:36.059 --> 00:15:37.899 just won't do anything beyond the end of the 00:15:37.899 --> 00:15:40.820 back patio. But by code, I have to have landscape 00:15:40.820 --> 00:15:45.629 planned for the city, for the front. So we have 00:15:45.629 --> 00:15:49.289 to budget and still probably spend around $40 00:15:49.289 --> 00:15:52.490 ,000 to $50 ,000 for all the hardscape and landscape. 00:15:52.529 --> 00:15:54.870 And that's just a house with a basic front yard. 00:15:55.439 --> 00:15:57.779 And the driveway and the back patio done in pavers. 00:15:57.960 --> 00:16:00.240 You don't think about that driveway, but it's 00:16:00.240 --> 00:16:01.860 an expense. It's an expense. Whether you do a 00:16:01.860 --> 00:16:03.960 paver or whether you do a concrete slab, it's 00:16:03.960 --> 00:16:06.519 either way. Either way. And driveways are big. 00:16:06.620 --> 00:16:08.480 They're covering a lot of space. I mean, it's 00:16:08.480 --> 00:16:11.220 always a minimum of a 500 square foot driveway, 00:16:11.279 --> 00:16:12.799 but most of our homes have three car garages 00:16:12.799 --> 00:16:14.539 or more. And then we send them back from the 00:16:14.539 --> 00:16:16.379 street a little bit. We're usually a thousand 00:16:16.379 --> 00:16:19.220 to 1200 in total between the little back covered 00:16:19.220 --> 00:16:21.799 patio that will have pavers, the front sidewalk 00:16:21.799 --> 00:16:25.139 and the driveway. And pavers are... $8 to $10 00:16:25.139 --> 00:16:27.259 per square with the product and the labor and 00:16:27.259 --> 00:16:29.220 all the accessories. So you multiply that by 00:16:29.220 --> 00:16:31.840 that. So $12 ,000 and then that's just a driveway 00:16:31.840 --> 00:16:33.259 sitting in the middle of dirt leading to your 00:16:33.259 --> 00:16:36.639 house. So just, it's just a lot of, it's just 00:16:36.639 --> 00:16:38.600 a big cost. So when you're starting that as your 00:16:38.600 --> 00:16:40.320 basis and then you got to figure out all the 00:16:40.320 --> 00:16:42.320 irrigation and everything on all the plants and 00:16:42.320 --> 00:16:44.379 the ground cover. It adds up. So you pull up 00:16:44.379 --> 00:16:48.480 and that's what $40 ,000 bought me. Okay. When 00:16:48.480 --> 00:16:52.649 I pull up, how about $2 million? $215 ,000. I 00:16:52.649 --> 00:16:55.169 got a driveway and some trees and some, okay. 00:16:55.769 --> 00:16:57.789 So it's just sticker shock. So those are the 00:16:57.789 --> 00:16:59.230 ones that would shock us in terms of the high 00:16:59.230 --> 00:17:01.549 prices. What about the other end of it? Where 00:17:01.549 --> 00:17:03.789 would you drop down and maybe let us see that 00:17:03.789 --> 00:17:06.369 there isn't as big an expense as you might originally 00:17:06.369 --> 00:17:09.009 imagine? Yeah, right. Some of these are actually 00:17:09.009 --> 00:17:11.789 bigger line items than the first three, but they're 00:17:11.789 --> 00:17:14.369 such integral parts of the house, you would expect 00:17:14.369 --> 00:17:16.390 them to be higher. So I consider it reverse sticker 00:17:16.390 --> 00:17:18.730 shock. That's brilliant. Well, I still spent 00:17:18.730 --> 00:17:22.009 1 .7 in build cost, but the lumber was only X 00:17:22.009 --> 00:17:25.170 number of dollars. So that leads me to the first 00:17:25.170 --> 00:17:27.549 one is lumber and lumber is a hot button and 00:17:27.549 --> 00:17:30.410 lumber is the skeleton of the house and I get 00:17:30.410 --> 00:17:32.250 it. People feel like, oh, you know, it's going 00:17:32.250 --> 00:17:35.410 to be a huge dollar amount, but a lumber package, 00:17:35.809 --> 00:17:37.970 assuming kind of average lumber prices of three 00:17:37.970 --> 00:17:40.650 to $400 per thousand board feet, which is kind 00:17:40.650 --> 00:17:42.470 of where they hover and average. We have spikes 00:17:42.470 --> 00:17:44.369 and up and down, but for the most part, that's 00:17:44.369 --> 00:17:47.259 where they're at. So with lumber prices around 00:17:47.259 --> 00:17:50.920 that price point, it's a lumber package on a 00:17:50.920 --> 00:17:54.240 4 ,000 square foot home might be around $50 ,000 00:17:54.240 --> 00:17:57.900 to about $10 a square foot on a home that will 00:17:57.900 --> 00:18:01.559 sell for five to $600 a square foot. So we're 00:18:01.559 --> 00:18:05.160 talking, that's a shock. It's around. Quick math, 00:18:05.460 --> 00:18:10.380 2 % of the end -of -day value, one fiftieth of 00:18:10.380 --> 00:18:12.859 the value of the home is lumber. It feels like 00:18:12.859 --> 00:18:15.299 it'd be, to me, it feels like it'd be 10%. I 00:18:15.299 --> 00:18:18.380 just, I mean, I'm a seasoned builder and I still 00:18:18.380 --> 00:18:20.599 feel like, oh wow, that was only 50 ,000, including 00:18:20.599 --> 00:18:22.980 - We had that come up in another issue and that 00:18:22.980 --> 00:18:25.779 you mentioned the cost and we got a lot of feedback 00:18:25.779 --> 00:18:28.359 out of people like, what? So yeah, it is a shock 00:18:28.359 --> 00:18:30.319 that it's as low as it is. Right, you would think, 00:18:30.319 --> 00:18:32.799 oh, framing and lumber, that must just be a huge 00:18:32.799 --> 00:18:37.869 - And it really isn't. How far you can get on 00:18:37.869 --> 00:18:41.109 10 % of the budget, you can be walking through 00:18:41.109 --> 00:18:44.150 a house, the slab is done, everything, you get 00:18:44.150 --> 00:18:47.970 really far in. And then the expensive stuff starts. 00:18:49.069 --> 00:18:51.829 And don't get me wrong, there's a lot of 30 ,000 00:18:51.829 --> 00:18:55.470 here, 40 ,000. Trust packages are around 25 ,000 00:18:55.470 --> 00:18:58.650 for a 4 ,000 square foot two story home. By the 00:18:58.650 --> 00:19:00.289 time you buy the floor trusses and the roof trusses. 00:19:00.309 --> 00:19:02.490 So that's a small footprint. small, relatively 00:19:02.490 --> 00:19:03.930 small for how much square footage you're getting. 00:19:04.069 --> 00:19:07.009 Yeah. And you're spending around $25 ,000. And 00:19:07.009 --> 00:19:08.769 that doesn't factor into your lumber costs? I 00:19:08.769 --> 00:19:11.109 mean, they are both a wood. It's both a wood. 00:19:12.009 --> 00:19:14.950 I break them out differently. But yeah, you could 00:19:14.950 --> 00:19:16.569 argue that it should be. So even if you were 00:19:16.569 --> 00:19:18.970 to add in trusses, let's take our Briel floor 00:19:18.970 --> 00:19:21.009 plan, which is a 30 -acre square foot two -story. 00:19:21.509 --> 00:19:25.690 Lumber package is around $43 ,000. So around 00:19:25.690 --> 00:19:28.430 $10 square. The truss package is $25 ,000. So 00:19:28.430 --> 00:19:31.769 we're at around $70 ,000. for all the lumber 00:19:31.769 --> 00:19:33.549 and trusses and then include specialty lumber, 00:19:33.690 --> 00:19:35.990 glulam beams, LBLs, everything that would go 00:19:35.990 --> 00:19:39.130 into all the hardware, the tie downs, the straps, 00:19:39.289 --> 00:19:42.089 everything. Trust play to me. Compare that to 00:19:42.089 --> 00:19:43.529 the landscape that we just talked about. That's 00:19:43.529 --> 00:19:46.630 the whole house and the stability and the function 00:19:46.630 --> 00:19:48.630 of the living quarters. The landscape might die 00:19:48.630 --> 00:19:50.309 next year. You might take it out and say, I don't 00:19:50.309 --> 00:19:52.150 like these magnolias. I'm going to take them 00:19:52.150 --> 00:19:55.750 out. But relative perspective. Right. When you're 00:19:55.750 --> 00:19:58.670 not even at 10 % of the end of day sales price, 00:19:58.690 --> 00:20:01.980 ideally. Yeah, I find that interesting every 00:20:01.980 --> 00:20:04.460 time I look at a budget, yet I still spend over 00:20:04.460 --> 00:20:07.859 a million. Oh, this is good. Our lumber and framing 00:20:07.859 --> 00:20:09.559 and everything is like a hundred and thirty thousand. 00:20:09.599 --> 00:20:11.420 This is great. We're going to be so under budget 00:20:11.420 --> 00:20:14.839 when we never are under. Under budget. That's 00:20:14.839 --> 00:20:18.319 not my vocabulary. What else is lower than you 00:20:18.319 --> 00:20:21.980 think we might expect? To me, windows and exterior 00:20:21.980 --> 00:20:26.579 compound sliding doors. OK, if we do a low E 00:20:26.579 --> 00:20:29.640 really high quality vinyl window, which is one 00:20:29.640 --> 00:20:32.480 of the most affordable windows you can get. So 00:20:32.480 --> 00:20:34.500 granted that it's not the most high end window, 00:20:34.559 --> 00:20:37.539 but it's a really great window and it works really 00:20:37.539 --> 00:20:39.519 well and it will last for a really long time. 00:20:39.740 --> 00:20:41.819 It rarely discolors. It's just a good product. 00:20:42.279 --> 00:20:44.940 Let's go back to that Brielle floor plan. That 00:20:44.940 --> 00:20:50.119 house has four huge sliders, four huge sliders 00:20:50.119 --> 00:20:55.359 and 24 windows. And that entire package was $23 00:20:55.359 --> 00:21:00.960 ,500 with install. To me, that seems really cheap 00:21:00.960 --> 00:21:03.000 because when you walk through a home that doesn't 00:21:03.000 --> 00:21:04.660 have windows in it yet and then you come back 00:21:04.660 --> 00:21:06.099 and visit a week later and all the windows are 00:21:06.099 --> 00:21:09.099 in it feels like a different house it just feels 00:21:09.099 --> 00:21:13.400 like a home and to me that's always surprising 00:21:13.400 --> 00:21:16.619 now for reference if we were to go to a bronze 00:21:16.619 --> 00:21:19.799 thermally broken aluminum window and slider those 00:21:19.799 --> 00:21:22.380 can get up there but even if we took this to 00:21:22.380 --> 00:21:26.220 the tippy top most high -end window I still would 00:21:26.220 --> 00:21:29.559 not spend more than $80 ,000 For the highest 00:21:29.559 --> 00:21:32.440 end window for 20 plus windows and those 20 plus 00:21:32.440 --> 00:21:35.220 windows and four huge sliders to me That just 00:21:35.220 --> 00:21:38.839 seems that does see right and then as a developer 00:21:38.839 --> 00:21:42.079 We make decisions on how to spec homes for right 00:21:42.079 --> 00:21:43.859 for those reasons. Okay, what kind of lot does 00:21:43.859 --> 00:21:45.700 this have? What kind of day sells price? Can 00:21:45.700 --> 00:21:48.059 I cut a little bit here the end -of -day buyer? 00:21:48.099 --> 00:21:51.940 I will tell you that I've never had A buyer dismiss 00:21:51.940 --> 00:21:54.440 a home based on the windows as far as I've known 00:21:54.440 --> 00:21:57.920 they that is never a deciding factor So I will 00:21:57.920 --> 00:22:00.160 do it and we've upgraded some of our specs in 00:22:00.160 --> 00:22:02.940 like Las Vegas with better doors and windows 00:22:02.940 --> 00:22:05.480 just because I feel that the home and the lot 00:22:05.480 --> 00:22:08.119 deserves it and then if I Upgrade a couple other 00:22:08.119 --> 00:22:10.200 things then maybe that buyer that's shopping 00:22:10.200 --> 00:22:11.900 me against another builder on the other side 00:22:11.900 --> 00:22:15.440 of the lake Might come in and say oh their toll 00:22:15.440 --> 00:22:18.710 brothers is doing black aluminum and you're at 00:22:18.710 --> 00:22:22.569 2 .4 and they're at 2 .2 and so you just do things 00:22:22.569 --> 00:22:25.089 because you don't want to not do it because you've 00:22:25.089 --> 00:22:27.390 over specked the home and other aspects but it's 00:22:27.390 --> 00:22:29.609 one of the last things that I upgrade I mean 00:22:29.609 --> 00:22:31.509 to pull back the curtain but it's one of the 00:22:31.509 --> 00:22:34.130 last things I upgrade because I know from experience 00:22:34.130 --> 00:22:36.730 that it does not move the needle in sales price 00:22:36.730 --> 00:22:40.450 so given the option many buyers will elect to 00:22:40.450 --> 00:22:43.559 upgrade it with us They at least want it on the 00:22:43.559 --> 00:22:45.500 high touch point sliders. I want those upgraded 00:22:45.500 --> 00:22:47.160 the thermally broken. Sometimes you you know, 00:22:47.220 --> 00:22:49.880 we'll mix and match Rarely do you touch your 00:22:49.880 --> 00:22:51.619 windows? I don't touch them. You just don't really 00:22:51.619 --> 00:22:53.539 open I mean just not that they're not a high 00:22:53.539 --> 00:22:57.670 touch point. So But buyers will choose to upgrade 00:22:57.670 --> 00:22:59.789 them but never dismiss a spec cone that already 00:22:59.789 --> 00:23:01.490 has. And the whole point to a window is that 00:23:01.490 --> 00:23:02.829 you're looking through it. So you're not looking 00:23:02.829 --> 00:23:05.609 at it. Right. That's a good point. That's a good 00:23:05.609 --> 00:23:08.009 way to put it. That's the last thing you notice. 00:23:09.130 --> 00:23:11.730 Do you notice that? It's still a beautiful glass 00:23:11.730 --> 00:23:14.910 scene outside. Right. And then the outside, I 00:23:14.910 --> 00:23:17.730 mean I look for those things but I would never... 00:23:17.769 --> 00:23:20.529 not buy a home because of its window type. I 00:23:20.529 --> 00:23:22.650 look at those things too, but I don't think the 00:23:22.650 --> 00:23:23.849 average person does. We also have a podcast about 00:23:23.849 --> 00:23:26.470 home building. So yes, we do pay attention to 00:23:26.470 --> 00:23:28.069 those details, but I don't know that the average 00:23:28.069 --> 00:23:30.069 buyer would. I don't think. It's definitely not 00:23:30.069 --> 00:23:33.690 a decision maker. Right. Okay, so that's two. 00:23:34.849 --> 00:23:37.529 So the third one I would say, again, in relation, 00:23:37.730 --> 00:23:39.930 this is a huge line item and this is really hard 00:23:39.930 --> 00:23:43.869 to track, but it's labor. So it's hard to track 00:23:43.869 --> 00:23:46.450 because if I hire a sub, the windows for instance. 00:23:46.490 --> 00:23:50.500 Okay. How much of that 23 .5 is labor? Probably 00:23:50.500 --> 00:23:54.059 around $6 ,000. Maybe not even that much. So 00:23:54.059 --> 00:23:56.859 I can, I roughly know how much those things cost. 00:23:56.960 --> 00:24:00.140 If my HVAC ductwork and the condensers and everything's 00:24:00.140 --> 00:24:02.920 around 38 ,000, I know that around probably 8 00:24:02.920 --> 00:24:06.640 ,000 of that was labor. So on a home that might 00:24:06.640 --> 00:24:10.720 cost around $300 a square to build with an end 00:24:10.720 --> 00:24:13.740 of day value of around $500 per square foot. 00:24:14.079 --> 00:24:17.819 Your labor is probably only $100 a square. And 00:24:17.819 --> 00:24:21.500 that is generous, actually. Really? Yeah. Because 00:24:21.500 --> 00:24:25.599 labor is less than half of the total cost of 00:24:25.599 --> 00:24:28.980 construction costs and about 20 % of the end 00:24:28.980 --> 00:24:33.500 -of -day value of the home. And I find that alarming. 00:24:35.880 --> 00:24:37.420 Because it wouldn't come together if it weren't 00:24:37.420 --> 00:24:39.299 for the labor. Right. And when you walk one of 00:24:39.299 --> 00:24:41.819 our sites, sometimes you'll see 15 to 20 guys. 00:24:41.819 --> 00:24:44.579 They're working with all their equipment. and 00:24:44.579 --> 00:24:46.960 all their knowledge, and their work ethic, and 00:24:46.960 --> 00:24:49.619 sometimes it's July, and it's 115 in Las Vegas, 00:24:50.119 --> 00:24:51.799 and they're still there working. Sometimes our 00:24:51.799 --> 00:24:54.660 roofs tend to land in June and July. Oh, sorry, 00:24:54.839 --> 00:24:58.140 you're gonna be putting this roof tile on in 00:24:58.140 --> 00:25:00.259 August. And we go into a house sometimes, and 00:25:00.259 --> 00:25:03.240 I've often, it feels almost like a beehive, it's 00:25:03.240 --> 00:25:04.819 just bustling. It's a beehive. Everybody's everywhere, 00:25:04.920 --> 00:25:06.759 and people are coming and going, and everybody's 00:25:06.759 --> 00:25:08.839 got their job, their mission, their point, and 00:25:08.839 --> 00:25:11.200 they're all working in unison, but individual, 00:25:11.660 --> 00:25:14.220 it is mind blowing. It's mind blowing. How much 00:25:14.220 --> 00:25:15.960 can be happening in one time? How much can be 00:25:15.960 --> 00:25:17.680 happening? How many man hours? They generally 00:25:17.680 --> 00:25:20.160 say an average home is about generates three 00:25:20.160 --> 00:25:23.799 full -time jobs for the economy. So if you just 00:25:23.799 --> 00:25:26.220 were to say how many, what's a full -time jobs 00:25:26.220 --> 00:25:30.279 are up $2 ,200 a year. So that's about 6 ,600 00:25:30.279 --> 00:25:33.099 man hours that goes into the average home. And 00:25:33.099 --> 00:25:35.940 if our homes are twice the average, we probably 00:25:35.940 --> 00:25:39.049 have about 12 ,000 man hours in a home. And to 00:25:39.049 --> 00:25:41.069 think that that's only 20 % of the end -of -the 00:25:41.069 --> 00:25:43.190 -day sales price to me is just crazy. That's 00:25:43.190 --> 00:25:47.569 wild. Yeah. That is. Yeah. And what about the 00:25:47.569 --> 00:25:49.869 pretty stuff inside the surfaces, the flooring, 00:25:49.869 --> 00:25:51.410 the countertops? In terms of sticker shock? Yeah, 00:25:51.450 --> 00:25:53.089 I mean where do those fall? Are those higher 00:25:53.089 --> 00:25:56.390 than you'd expect or are they right where you 00:25:56.390 --> 00:25:58.529 might imagine it to be? I think that's why I 00:25:58.529 --> 00:26:01.089 didn't include them because I feel that they're... 00:26:01.069 --> 00:26:03.710 Generally, if you're interested in home building 00:26:03.710 --> 00:26:05.509 or considering building in a home or you're a 00:26:05.509 --> 00:26:07.609 homeowner or you're interested in even renovation, 00:26:08.170 --> 00:26:10.569 those are really transparent things to get the 00:26:10.569 --> 00:26:13.029 pricing on. Appliances, very transparent. You 00:26:13.029 --> 00:26:16.430 can go on to a great appliance vendor, Appliance 00:26:16.430 --> 00:26:18.349 by Design. You can go to these places and see, 00:26:18.769 --> 00:26:21.789 okay, this high end range is $19 ,000. We know 00:26:21.789 --> 00:26:24.309 it. Yeah, that sticker shocks me to have a $19 00:26:24.309 --> 00:26:28.089 ,000 range, but it's a knowable and you expect 00:26:28.089 --> 00:26:30.779 it. I'm not saying you expect it to cost as much 00:26:30.779 --> 00:26:33.299 as a car, but you know it's not cheap. So that's 00:26:33.299 --> 00:26:35.359 why I didn't include it, but the pretty stuff 00:26:35.359 --> 00:26:39.759 to me is, in my opinion, I think I've become 00:26:39.759 --> 00:26:42.240 so numb to it. Maybe I should be surprised that 00:26:42.240 --> 00:26:45.960 we can spend 80 to $100 ,000 in a cabinet package 00:26:45.960 --> 00:26:48.700 for an entire house, but that doesn't shock me. 00:26:49.369 --> 00:26:52.150 It shocks me a little. Yeah, I mean, don't get 00:26:52.150 --> 00:26:54.130 me wrong. To me, it's not top three. And I know 00:26:54.130 --> 00:26:57.069 the cost, but it's still, it's every time I'm 00:26:57.069 --> 00:26:59.210 like, really? It is, it is astounding. So we 00:26:59.210 --> 00:27:02.549 had a house that was, cabinets are thought of 00:27:02.549 --> 00:27:05.289 in boxes. You break them into a box. Even if 00:27:05.289 --> 00:27:08.390 it's, you know, a whole bank of cabinets, it's 00:27:08.390 --> 00:27:10.609 how many boxes made up that bank of cabinets. 00:27:11.230 --> 00:27:14.140 We had a house that's just not finishing. that 00:27:14.140 --> 00:27:16.059 when I really broke it down, this one did sticker 00:27:16.059 --> 00:27:21.839 shock me, it was $1 ,200 per box. It was 49 boxes 00:27:21.839 --> 00:27:25.119 and it was a $62 ,000 cabinet package. So it 00:27:25.119 --> 00:27:27.859 worked out to be $1 ,200. A troll in the comment 00:27:27.859 --> 00:27:29.539 section is going to do that. It's actually $1 00:27:29.539 --> 00:27:33.099 ,134. Get a life. Go start a cabinet company 00:27:33.099 --> 00:27:35.079 and make yourself useful. Yeah, go get busy. 00:27:35.400 --> 00:27:38.700 Yeah, go get busy. So yes, when I really broke 00:27:38.700 --> 00:27:40.579 it down and you walk through the house and think... 00:27:40.650 --> 00:27:43.529 Really that box is open and that's an average 00:27:43.529 --> 00:27:45.269 some boxes are more expensive than others But 00:27:45.269 --> 00:27:48.049 at the end of the day we have a data set of 49. 00:27:48.210 --> 00:27:50.390 That's a pretty big data set So the average is 00:27:50.390 --> 00:27:54.069 pretty reliable in my opinion so that yes, so 00:27:54.069 --> 00:27:56.750 I would say among the pretty stuff I think cabinets 00:27:56.750 --> 00:28:00.369 have carry really high sticker shock in a luxury 00:28:00.369 --> 00:28:02.730 home to me Appliances always carry a really high 00:28:02.730 --> 00:28:06.200 sticker shock in terms of the pretty stuff I 00:28:06.200 --> 00:28:08.500 mean, there are Thermador refrigerators that 00:28:08.500 --> 00:28:11.380 are $18 ,000. I know. I mean, it's just... I 00:28:11.380 --> 00:28:12.740 know. I've been shopping them for my own home. 00:28:12.859 --> 00:28:14.059 Or I was, you know, when I was shopping them 00:28:14.059 --> 00:28:16.240 for my own home, I was like, gosh, I know what 00:28:16.240 --> 00:28:18.279 these cost. I sell them. I see them. I share 00:28:18.279 --> 00:28:20.099 them with people. I help people choose them for 00:28:20.099 --> 00:28:21.799 their home. But when it's your dollar, you're 00:28:21.799 --> 00:28:24.259 like, well... It really is a... When you add 00:28:24.259 --> 00:28:26.140 that... Well, that's a lot. Yeah. I haven't had 00:28:26.140 --> 00:28:29.960 a home that sold for north of $2 million that 00:28:29.960 --> 00:28:32.299 didn't have at least $30 ,000 worth of appliances 00:28:32.299 --> 00:28:34.920 in it. Because where do you stop? we should probably 00:28:34.920 --> 00:28:36.460 have an ice maker, an under counter ice maker 00:28:36.460 --> 00:28:38.460 that's plumbed in and we should probably have 00:28:38.460 --> 00:28:40.640 fridge columns and we should probably make them 00:28:40.640 --> 00:28:42.559 panel ready and do the cabinet panels. And the 00:28:42.559 --> 00:28:44.240 nicer you make those fridge columns now this 00:28:44.240 --> 00:28:46.019 has to match and now that has to go and this 00:28:46.019 --> 00:28:47.740 has you know you kind of do you want to keep 00:28:47.740 --> 00:28:50.460 the same brand and then you're right that's right 00:28:50.460 --> 00:28:52.640 and before you know it you've spent forty to 00:28:52.640 --> 00:28:54.839 fifty thousand. The most I've ever spent was 00:28:54.839 --> 00:28:57.599 seventy thousand on an appliance package for 00:28:57.599 --> 00:29:00.900 a three million dollar home. But that home warranted 00:29:00.900 --> 00:29:03.920 it. It did, 100%. It had to. It did, 100%. And 00:29:03.920 --> 00:29:07.019 the end -of -day buyer actually noted the high 00:29:07.019 --> 00:29:09.799 -end appliance package that tipped him over from 00:29:09.799 --> 00:29:12.019 buying a home. And it was good. It was really 00:29:12.019 --> 00:29:14.160 great. So if I shared it over time, it was a 00:29:14.160 --> 00:29:16.740 fun one. It was a good package. But he cited 00:29:16.740 --> 00:29:18.900 that, that the home he was shopping us against 00:29:18.900 --> 00:29:22.660 was a resale. So we had a point there. We were 00:29:22.660 --> 00:29:25.440 in guard gated. This one wasn't. We were custom 00:29:25.440 --> 00:29:27.500 in new construction. Obviously that one wasn't. 00:29:27.680 --> 00:29:30.039 And then the fourth point was the appliance package. 00:29:30.279 --> 00:29:32.819 And he was an amateur chef, a retired guy that 00:29:32.819 --> 00:29:35.740 had taken an interest in culinary arts after 00:29:35.740 --> 00:29:37.400 his retirement. That's perfect then. Obviously 00:29:37.400 --> 00:29:39.460 he didn't need to do it for the money. Right. 00:29:40.240 --> 00:29:43.640 Yeah, exactly. He had it. So those are them. 00:29:44.539 --> 00:29:47.279 All right. Well, thanks. You're welcome. You're 00:29:47.279 --> 00:29:49.259 breaking that down for us. It's just interesting. 00:29:49.880 --> 00:29:51.940 You know what is in the home when you walk through 00:29:51.940 --> 00:29:53.599 it at the end of the day or if you go see a model, 00:29:53.619 --> 00:29:55.539 but you sometimes don't think about the cost 00:29:55.539 --> 00:29:57.539 that's associated with each of them, how it lays 00:29:57.539 --> 00:30:00.420 out and maybe it's more or less. And so thanks 00:30:00.420 --> 00:30:02.420 for pointing those out for us. Appreciate it. 00:30:02.599 --> 00:30:04.980 Learned some good stuff. Yes. Thank you for joining 00:30:04.980 --> 00:30:08.400 us and we will see you again next time on another 00:30:08.400 --> 00:30:11.619 episode of Trust the Process podcast. Bye -bye. 00:30:13.460 --> 00:30:15.480 Thanks for tuning into the Press the Process 00:30:15.480 --> 00:30:18.579 podcast. Make sure to follow us on Spotify to 00:30:18.579 --> 00:30:21.000 stay in the loop with the latest insights, project 00:30:21.000 --> 00:30:23.519 updates, and everything in between. See you next 00:30:23.519 --> 00:30:23.900 time.