Yeah, you're giving them choice. A lot of it's
illusion of choice, like the small, medium, large
jumbo popcorn at the movie theater. There really
is no medium. It's the largest medium. But it
pushes, right? It pushes you to jumbo. The jumbo's
only 80 cents more. It makes us feel better.
Yeah, exactly. It's only $0 .20. It's a dollar
total. That's really what you're paying for,
because the containers get a little more gross,
but it's not really more. It just looks more
impressive. You have more shame as you walk to
your movie theater. Yeah, I'm going to eat this
whole thing. Exactly. This is for the whole row.
It's not just one. It's a whole row. I was going
to share with everybody. Ever wonder what really
happens behind the scenes in construction, real
estate, and development? We pull back the curtain
on the new home construction industry, the real
estate market, and the trends shaping it all.
Discover the stories, insights, and expertise
behind the process of building a new home. Join
us for Trust the Process podcast, and let's build
something great together. Either way. Could we
go, could we go three steps to our height limit
or could that be? Yeah, we can go up to 31. So
we can do a nine, eight and eight with two foot
trusses. And then we probably on that product
would have to do a flat roof or just do a really
small gable just to not hit. Cause it's 31 to
the peak of the roof. Oh, okay. Yeah. So the
structure, structure height, not from the ground.
So from your finished floor up. Yeah. So you
don't have to, you don't have to account for
the thickness of the slab or the. the pad elevation.
Oh, that's interesting. I didn't even know that.
Yeah. I didn't know that when we were, yeah,
when you're looking at the threshold for how
tall a building can be. I didn't realize. Well,
where, where do you start? Where is the starting
point? Yeah. There's a world there. So I'm debating
all these things right now and I would never
go all through store in this community, but I
would love to maybe throw that offering in to
go, you know, to have a larger product. And it
might not even be, it might not be a suit, you
know, in terms of price or spend or any of those
pieces, but just to know that you have a little
bit of opportunity. If you wanted to do a two
story or three story, then it gives you, if you
were looking for the extra square footage, that's
one way to get it on a 24 foot. Yeah. Exactly.
Right. Cause right now I think we're maxed out
with that envelope. If you get a one car garage,
the biggest you can get is around 1400, I think
the math. And I have to talk to the engineer,
I have to talk to zoning. Can I overhang the
back? of the structure, you know, a foot or two
feet. Can I overhang it from the front to create
a shelter over the garage, but also some square
footage on the second floor? When you drive through
a production neighborhood, you see these in all
50, or anywhere where they build production homes,
you'll see these little tricks. Maximize your
slabs, maximize your footprints, and get as much
square footage. And ultimately people appreciate
it because they need the square footage in that
space. And it doesn't really materially add to
the cost of the home. So all these little tricks
that we'll do, but again, that's a zoning thing.
Cause certain zoning overlays have, okay, if
you have this kind of height, the second floor
is to push in the third floor. There's just certain
restrictions that you just can't always do a,
a Brownstone basically. Right. Well, then you
wouldn't want to I mean from an aesthetic perspective
for it not only does that extra two feet that
it bumps out Make the front of the home a little
better and give you that extra square footage
inside There's something about the appeal of
a community when that you know when there's some
dimension to a home Yes, yeah, yeah, that's why
you add different colors and bump outs and trim
around the way, you know You want it to have
a little bit of interest in some character? Yeah,
I've thought of it even that as you mentioned
and I would love to maybe build row houses and
they're built that way. They're built with bay
windows. They're built like East Coast row houses
where they, this one has red brick and this one
has clapboard and this one has cedar shakes.
It would be neat. We'll see if the market will
bear. When I talk about what can trust add, it's
flair. These are the things I'm talking about.
Double stack cabinets in the uppers. You might
only have three uppers in the entire kitchen.
Let's double stack them. Let's include a backsplash.
You know, we're going to buy 24 houses for the
backsplash. Let's just include it. It costs us
a thousand dollars. And then, you know, we find
that people really appreciate those things. So
backsplash or even we toured a home recently
where they had that little kind of the section
window in the backsplash area between the cabinet
and the countertop. And it's just that little
bit of extra light that made the whole kitchen
feel so much bigger. It was a tiny space, but
just giving some of that dimension a little bit
of extra flair. And like you said, that's kind
of. you know, little touches that might not ordinarily
be found in that, necessarily in that entry -level
product. Right. Some unexpected. Yeah, hey, you
know, they say, I can't remember who said it.
I think it was a fast food magnet. It said, you
should always... delight your customers. So I
kind of think of these things when I'm drawing
plans, like when I was working on our Westridge
product this weekend. Okay, how can we delight
this customer? Okay, I'm going to give prep kitchens
to four of the five houses. I'm going to do pool
bathrooms. That's cool. I'm doing 12 foot ceilings
on the first floor to switch gears a little bit
on the Westridge. That's what we're doing to
pull back the curtain. That's something that
I worked on this weekend. It's going to be gorgeous.
Yeah. What if you can have transom windows over
interior door openings? I mean, think about the
things that a 12 -foot lid will open up for us.
Transoms over the windows. The sliders can go
to 10 feet instead of 8 feet. I mean, there's
all these little things that going to 12 will
really help. And it's an area that... You're
not seeing that in that price point. If we want
to target one three to one five, you're not seeing
that. Our nearest competitor, Richmond, American,
built a 15 -home infill community that you can
see from this neighborhood. And I did a deep
dive into them before I scrapped all 50 homes
I've drawn for this community. There's only five
houses. I've drawn 50 of them. I scrapped every
single one of those houses, Christa. Not one
house has survived. But I did a deep dive on
Friday. No, I'm done. I'm done now. You're done.
But you were back to square one before you...
We were. Friday afternoon, I was back to square
one. Oh, I didn't know you were there. Yeah,
I scrapped everything. I scrapped... Not even
a set, so you did have a crazy weekend. I did.
Yes, you were in the zone all weekend. I was
in the zone. I did six hours of CE too, which
don't tell Keegan that I was working anything
else. But... Welcome back to Trust the Process,
podcast where we talk about the new home industry,
real estate, construction, and all things in
between. Hello, Michael. Hello. Hi. Today we
are going to have a little conversation about
a couple of projects that we have going, a bit
of a wrap -up on the year, and kind of see where
the conversation takes us. So I know you have
a few interesting tidbits that you'd like to
share, so I'll let you take it over. Thank you.
Well First let's talk about kind of the year
wrap for the company and the market and then
we can get into the weeds on some interesting
new developments in our in our developments and
Yeah, kind of hit on everything so The market
it's obviously too early to tell a lot of the
data won't be out till January my year -end data,
but we have been working in this market on our
brokerage business and in our build business,
we feel a shift. We felt a shift this year into
the softest market that I remember probably back
to maybe 2019 or even softer still maybe 2015.
If I think about the feeling of the market, no
metrics, just the feeling. Really? You'd go all
the way back to 2015? Think about what The production
builders are throwing at buyers when I think
about the price reductions and I think about
days on market, when I think about concessions,
when I look at just gross inventory numbers,
yeah, it's different. 15 definitely had higher
inventory, but it's also slower sales pace because
there are just fewer buyers. And what's funny
is that 25 undoubtedly will be a kind of a bummer
year of this decade, right? 20 was great. 21
is phenomenal in terms of sales price is not
great for buyers. 22 held strong through rates.
23 held strong. 24 cooled, but was still better
than 25. Saw more price appreciation. We'll get
the numbers, you know, January where the year
ended, but still saw more appreciation that year.
And the funny thing is rates are almost on average
a whole point lower. overall in 25 versus where
they were in 24. So we saw a, what does that
come out to? Like a 15 % improvement in rates,
in mortgage rates. It's hard to quantify that,
but if you think about it, that's really what
it came down to. Like a sixth, your interest
costs were a sixth cheaper in 2025 versus 2024.
Yeah. And odd that that wasn't necessarily reflected
in, you know, a surge of sales or people jumping
back into the market immediately. Yes. In fact,
the market went in the other direction, which
is crazy to me that it didn't do any of that.
We had more inventory. We had lower rates. You
should have seen a banner year in sales because
the conventional wisdom for the last two years,
three years, well, even five years, go back to
COVID. As the people were locked in, people were
locked into their houses. People would have bought
if they had inventory and 21 weeks off. If every
buyer had a house to buy, their numbers would
have been off the charts. I mean, prices were
significantly lower in 21. Maybe that's part
of it. So buyers have been priced out, and obviously
rates are much higher, but it's just funny that
it didn't materialize. The increase in inventory
and some of the lowest rates in two years did
not materially impact home sales. In fact, it's
been rather sluggish and we're just sitting on
more and more inventory. I heard, I don't know
on what kind of authority, but a certain massive
home builder in our market, in Las Vegas market,
who normally builds around 2000 homes a year
is planning on doing 1500 next year. A huge drop
in inventory, huge drop in projections. And I
think that this particular buyer doesn't do a
lot of customization. So I'm sorry, builder,
it doesn't do a lot of customization. So I would
imagine the reason I bring that up is I would
imagine most of their turnaround times are between
four and six months. They're finishing homes
now that they started in June when they might
when we knew the market was soft So, you know
shows you that okay, even they thought well,
it's gonna be better market Yeah, it's slow start
to the year, but let's keep our initial drive
Let's do our 2 ,000 homes that we do every year
and they still will finish her on 2 ,000 homes
this year that particular builder and It shows
you that they're planning on either having that
much overhang inventory from 25 going into 26
or they can they can see demand dropping even
farther or what they see as today's demand is
not adequate for their model to make it make
sense. So - Interesting to see how that plays
out in the number of permits pulled, starts,
complete, you know, all of that. Yeah, that's
like any reflected there. Yeah, this is the kind
of data that I'm yearning for once the new year
starts. And we normally start to see that kind
of publish, you know. mid to late January. So
we'll see Clark County permits, where all those
numbers came in at and get a better feel. We
should have some sales data. I know they're saying
the average sales price of a new home is in the
low 500s in our county and that tracks. It's
high. I mean, of a new home, and you got to think
there's, there's never been more multifamily
for sale inventory than I ever remember. Period.
Would you agree in Las Vegas? I agree. A lot
of builders are in that space. And I don't know,
five years, I would say. Six years ago. I don't
know that many were at all and now slowly each
year They've all kind of started jumping into
where all the builders are doing some a number
see family exactly even our even told brothers
I hate to name -drop but even our luxury builder
is a lot of them. I think they have two minutes
broader They have two or three in Summerlin I
believe they're doing another one a fourth one
in Summerlin It's wild for their premium. They're
one and a half times the median sales price But
doing what they can to get their sales prices
to a position where people can afford to be in
the market anymore. Right. That buyer who doesn't
need the square footage doesn't need the yard,
but still has a $750 ,000 or $800 ,000 budget.
But that is the softest part of our market right
now, our townhomes and condos. Of the new construction
side, the resale stuff is generally so cheap
being to get a condo for 250 ,000 in a nice neighborhood
and good condition. Yeah, those are still going,
but $350 ,000 new construction townhouse and
a subpar zip code, um, with average finishes.
Yeah, there's a hundred, you throw a stone and
hit a hundred of those. So what we're seeing
now is unless you're in a really premium master
plan, there were kind of. underbuilt on luxury,
which we find ourselves in a pretty good spot
being in that space because a lot of the builders,
we even mentioned a luxury builder moments ago
that has pivoted, still has a luxury presence,
but has pivoted some, at least some other bandwidth
to a multifamily kind of move up level one or
a downsize from a move up four, you know, someone
maybe on their fourth move up home sells and
moves to Las Vegas or moves within state and,
um, and buys something like that. So, uh, we're
seeing that some of the builders that had a high
presence in luxury are shifting. And some of
the luxury builders that we're building in big
scale have pulled back on their starts and their
projections. And in some of our areas, we're
hoping to kind of fill that market, which is
why I've decided to take those two subdivisions
in Henderson to more luxury. Because I think
that there's going to be a hole in the market.
in, in 2026, that especially these infill projects,
there's not much new construction in these areas
that I'm mentioning, except custom seven to $15
million homes behind guard gates. So I think
that, that is always a recipe for, for success.
If you can kind of be in that infill number one,
number two, and a product offering that there's
not a lot of resales in. Or if you can build
a product that looks nothing like any resell
has 12 foot ceilings on the main 10 foot on the
second has takes advantage of views. Cause every
home is custom, a true custom enclave. And I
think that that's where we need to take our projects.
Um, with the exception of a new one that we'll
talk about when we get into what the company's
done this year. Um, but for the most part, when
we're doing it on Serene and we try to do that
in Lake Las Vegas, we try to curate a home. to
that lot and we have some replication, but for
the most part it's unique site conditions tailor
the home to the, to the site. So that's where
we're hoping to fill. I do think that we'll see
that, you know, move up level two, uh, and luxury
market continue to get smaller and smaller from
a builder standpoint, because that's a business
model that's very challenging for the national
builders to know what that. move up buyer wants
at scale. And to build a product compelling enough
to sell 2 .5 to $3 million homes at in bulk,
you know, basically at 80 to 100 home neighborhoods.
We're still seeing super premium zip codes 89138.
Best part of summer. Absolutely 135 North Shore
of Lake Las Vegas. Yeah, you're still going to
see those. But whereas we used to see large estate
style. We know three times the median sales price
by toll brothers and Richmond. You've seen a
little bit of that Absolutely, but not the scale
that we're that we were used to so I think that
that should Give us good Intel on where we need
to be as a company and where we need to take
our product offering Love it. I wish I had more
numbers. I don't have the numbers and you know,
I love throw the numbers I know and a bit of
a disadvantage. We're kind of anticipating we
know what has happened. But without that number,
there's nothing tangible to actually weigh it
against. So exactly. I mean, I really close out
and then release. And that makes sense. But it's
right. Let's go. We're going off a feeling. And
I do feel what I believe what I've just said
will bear out in the numbers. And I think when
you look at what multifamily has done, the funny
thing is that pullback in multifamily for rent,
meaning apartments is notable. So I almost feel
like we just shifted those permits over, which
is great because that's more homeownership. I
hate the build the rent idea. I get it as a business
model. It's a wonderful business model, but I
hate it as a notion. So it's kind of encouraging
to see production builders trying to get into
that space and try to give homeownership to all
levels of the price tiers. That being said, we
will have a multi -family townhome project for
sale that we have not even talked about, and
we have not even released anything, but it'll
be 24 townhouses in a infill part of town, let's
put it that way, and we'll be targeting an entry
-level price point. And we will do our best to
bring the Trust Home Builders flair to that entry
-level price point, but we're going to be constrained
by... where material costs are and labor costs,
bill costs. It's going to be very challenging,
but I'm ready for the challenge to see what we
can put in there and to see what it's like to
build in that entry -level space. And can we
give it - That's the big news, guys. We're announcing
this. Yeah, see, that's it. It's big news. Yeah.
So big news, things coming in our next year.
Yeah, we'll probably break ground for that project.
Mid to late September, we still have to do all
the civil improvement plans, the utility laterals,
all the horizontal control, all those things
have to be done. For selling in 27, we think?
Yeah, we might pre -sell. I mean, depends. If
it goes as quickly as the engineering firm thinks
it can go, we could be pre -selling in the end
of 26. That's very ambitious. But we could. We
could technically be open for sales by this time
next year. It's a long shot, but we could be.
Most likely, yes, our recording and our sales
move -ins. Yeah, and Q2, 2027. So we're a ways
off and we're targeting the middle $300 ,000
sales price right now, hoping that that number
is better by then or maybe rates are better and
that number is the same, but it's more affordable
for a greater number of people. I'd love to see
it do very, very well, but I'm completely prepared
for a scenario where we struggle and we sell
three or four a month and that takes us 10 months
to get out of there. Very possible. And admittedly,
it will be, it will be a time of discovery. There's,
I mean, we haven't built in that space before.
So that whole multifamily zoning is different.
Permits are different. Build style is different.
Product type is different. So it's really going
to be a moment of learning for trust company.
It'll be interesting. It's a zip code that I've
never built in. It's a product I've never offered.
It's a demographic I've never really catered
to, but I'm excited for it. It's a pivot, but
we're going to keep doing our luxury homes and
we're going to keep doing our spectacular customs.
And do this also. Yeah, try to build our portfolio
and build our repertoire. I love it. I'm so excited
for it. It'll be fun. It will be a challenge,
but it will be exciting. We love the luxury buyer
and we love the luxury homes, but there is a
need in the marketplace. And knowing there's
a housing crisis and being able to serve that
need on some level, even if it's just minuscule
with a few homes to start with, it gives us,
you know, you're giving hope to somebody who
otherwise couldn't be in the market. We never
had it. It's a fun thought. It is. In the past,
if I've maybe flipped a home or whatever, did
a renovation, I love the challenge of, okay,
this home's end -of -day sales price is $4 .50,
but what's the nicest you can make it for $4
.50 and still do well? And with those projects,
if past is prologue. I've always chosen to shrink
the margins, but make a compelling product. So
if I know me, we'll probably make a little less.
I don't know Michael, do you? Some days I think
we're all questioning me. I think that it'll
be interesting to see what we fit into that box.
We don't have limitless budget. We don't have
limitless build envelope. We don't have limitless
size. We don't have limitless of anything really.
We have limitless amenities. You want to be in
a pool type box. It's a tight box. I mean, as
far as creativity and some of the opportunities.
Yeah. Yes. It is the last five squares of a Sudoku.
Well, actually that's the easiest part of the
Sudoku. It's the first... 20 squares of a Sudoku
puzzle. It's that challenging, you know, there's
only so many ways you can do it. You're boxed
in. You don't know your constraints all the time.
So you get there, you don't know, or maybe the
market will be even softer. Maybe we'll have
a 10 % correction by then and we're, yeah, we
may be at 310. That's another unknown. Oh, for
sure. And I'm very prepared for it. It's going
to be interesting where the landowner is staying
in the deal. So we're going to win together and
we're going to lose together. Uh, which is a
great, a great, uh, way to keep training wheels
on, on us because we have the landowner in the
deal. So we're only paying once we go vertical,
which is great, great business model. It's actually
how it first started. Started into luxury is
the same entire starting and pivoting into true
luxury. So. It'll be interesting. We'll have
probably product needs to be determined by June
of this year I'll know the widths of the townhomes
and the widths of the building pads until then
I don't exactly know what I can do in there so
it's looking like maybe 23 24 wide by Potentially
60 deep so there's only so much you can do with
that now Maybe some go to 28 another go to 18
and we kind of play with the product offering
a little bit So we'll see it'll be interesting
either way We can go up to 31. So we can do a
nine, eight, and eight with two foot trusses.
And then we probably on that product would have
to do a flat roof or just do a really small gable
just to not hit. Cause it's 31 to the peak of
the roof. Oh, okay. Yeah. So the structure structure
height, not from the ground. So from your finished
floor up. Yeah. So you don't have to, you don't
have to account for the thickness of the slab
or the, the pad elevation. Oh, that's interesting.
I didn't even know that. Yeah. I didn't know
that when we were, yeah, when you're looking
at the threshold for how tall a building can
be. I didn't realize. Well, where, where do you
start? Where is the starting point? There's a
world there. So I'm debating all of these things
right now and I would never go all through story
in this community, but I would love to maybe
throw that offering in to go, you know, to have
a larger product. And it might not even be, it
might not be a suit, you know, in terms of price
or spend or any of those pieces, but just to
know that you have a little bit of opportunity.
If you wanted to do a two story or three story,
then yeah, it gives you a few. We're looking
for the extra square footage. That's one way
to get it on a 24 foot. Yeah, exactly. Right.
Yeah. Cause right now I think we're maxed out
with that envelope. If you get a one car garage,
the biggest you can get is around 1400, I think
the math. And I have to talk to the engineer,
I have to talk to zoning. Can I overhang the
back of the structure, you know, a foot or two
feet? Can I overhang it from the front to create
a shelter over the garage, but also some square
footage on the second floor? When you drive through
a production neighborhood, you see these in all
50, or anywhere where they build production homes,
you'll see these little tricks. Maximize your
slabs, maximize your footprints and get as much
square footage. And ultimately people appreciate
it because they need the square footage in that
space. And it doesn't really materially add to
the cost of the home. So all these little tricks
that we'll do, but again, that's a zoning thing.
Cause certain zoning overlays have, okay, if
you have this kind of height, the second floor
is to push in the third floor. There's just certain
restrictions that you just can't always do a,
a brownstone basically. Right. Well, then you
wouldn't want to. I mean, from an aesthetic perspective,
not only does that extra two feet that it bumps
out make the front of the home a little better
and give you that extra square footage inside,
there's something about the appeal of a community
when there's some dimension to a home. Some modulation.
Yes. Yeah, exactly. That's why you add different
colors and bump outs and trim around the way.
You want it to have a little bit of interest
in some character. Yeah. I've thought of it,
even that, as you mentioned, and I would love
to... maybe build row houses and they're built
that way. They're built with bay windows. They're
built like East Coast row houses where this one
has red brick and this one has clapboard and
this one has cedar shakes. It would be neat.
We'll see if the market will bear them. When
I talk about what can trust add its flair, these
are the things I'm talking about. Double stack
cabinets in the uppers. You might only have three
uppers in the entire kitchen. Let's double stack
them. Yeah. let's include a backsplash. You know,
we're going to buy 24 houses for the backsplash.
Let's just include it. It costs us a thousand
dollars. And then, you know, we find that people
really appreciate those things. So backsplash
or even we toured a home recently where they
have that little kind of the section window in
the backsplash area between the cabinet and the
countertop. And it's just that little bit of
extra light that made the whole kitchen feel
so much bigger. It was a tiny space, but just
giving some of that dimension a little bit of
extra flair. And like you said, that's kind of.
you know, little touches that might not ordinarily
be found in that, necessarily in that entry -level
product. Right. Some unexpected. Yeah, hey, you
know, they say, I can't remember who said it.
I think it was a fast food magnet. It said, you
should always delight your customers. So I kind
of think of these things when I'm drawing plans,
like when I was working on our Westridge product
this weekend. Okay, how can we delight? this
customer. Okay, I'm going to give prep kitchens
to four of the five houses. I'm going to do pool
bathrooms. That's cool. I'm doing 12th ceilings
on the first floor to switch gears a little bit
on the Westridge. That's what we're doing to
pull back the curtain. That's something that
I worked on this weekend. It's going to be gorgeous.
What if you can have transom windows over interior
door openings? I mean, think about the things
that A 12 foot lid will open up for us. Transoms
over the windows. The sliders can go to 10 feet
instead of eight feet. I mean, there's all these
little things that going to 12 will really help.
And it's a, it's a area that is not, you're not
seeing that in that price point. If we want to
target one three to one five, you're not seeing
that our nearest competitor, Richmond. American
built a 15 -home infill community that you can
see from this neighborhood. And I did a deep
dive into them before I scrapped all 50 homes
I've drawn for this community. There's only five
houses. I've drawn 50 of them. Amazing. Scrapped
every single one of those houses, Christa. Not
one house has survived. But I did a deep dive
on Friday. You're back to square one? No, I'm
done. I'm done now. You're done. I drew all through
the weekend. But you were back to square one
before you, yeah. We were. Friday afternoon,
I was back to square one. Oh, I didn't have any
either. Yeah, I scrapped everything. You did
have a crazy weekend. I did. Yes, you were in
the zone all weekend. I was in the zone. I did
six hours of CE too, which, don't tell Keegan
that I was working anything else. But I've just
looked at the competition. So these are one three
to one five. They have nine foot ceilings. They
do have the floating stairs. They have nice appliance
packages. They have nice cabinet packages. They
have nice finishes overall. The lots are a little
weird, but so are Westridge. Their lots are irregular.
Our lots are better, but this other community
called Crestorosa... is gated, we're not gonna
be gated. You know, there's advantages there,
4 ,000 square feet, we're gonna be like 32 to
3 ,800. So I thought, well, what ways can we
do, you know, how can we delight the customers?
How can we delight the people that come in? How
can we be a compelling product? So I thought,
okay, well, they're doing nine foot, we always
do 10, let's do 12. They're doing... you know,
no consideration for views, things like that.
Let's curate every home to the assets that that
lot has. One lot, for instance, lot three has
mountain views and strip views. So that has two
viewpoints, which is really cool. And by the
way, when we go over to Argos with just six homes,
we're going to do the same thing. We're going
to delight the customer at every turn, right?
Like, okay, this lot has these advantages. Let's
do it. That's really kind of... squeeze as much
as we can. And that's the only niche that I can
feel good about. And I know we've gone back and
forth on it, but that's the only niche. This
is a very premium zip code. This is an infill
project, which means there is somebody sitting
there right now in an 1800 square foot home that
would buy bigger, that has the money to go bigger.
but they don't want to leave the school. They're
super close to their babysitter. Their brother
lives around the corner. There's all these kind
of things. It becomes this little microcosm market
that you see a lot in Los Angeles or New York,
these kind of established markets. We're getting
to be such an established city now that we're
seeing. We're getting these little envelopes.
Everything is nearby. You're really close proximity
to anything you could need, including freeways.
It's right off of Horizon Village, which is a
really, you know, desirable area. Most people
know that section of town. And if you want to
be in Henderson, you want to be in Henderson.
That's it. So, yes, I could build a product that
works for a certain audience. There's multiple
right answers. I chose this audience. I think
that as we go closer to 1 .7 or even over 1 .5,
Horizon Ridge is kind of a busy road. You're
going to get some road noise on lots 1 and 2.
You know, we're not gated. We're not guarded.
We don't have any amenities. So I just figured
what is the tippy, tippy top we can push these.
And I think I feel good with that. And ultimately,
our build costs on the infrastructure and subdivision
is going to be the same, whether we're building
3 ,800 square foot homes or 1 ,800 square foot
homes. So at the end of the day, it's really
challenging to get it to pencil. Yeah. Well,
I'm excited to see those plans. Can't wait to...
Yeah. I'm going to save them as PDFs. I'm going
to still work on them a little bit tomorrow and
get a kind of a whole presentation together and
send... Probably sit on it and simmer on it.
Maybe I'll have you simmer on it, have Ryan simmer
on it. And the whole team actually is simmer
on it and just say, what do you see on these
plans that we're missing? And if it can be done
and added, they'll do that. And then we'll probably
fire them off to the architects. Just sometime
before Christmas, just so he can get started
on them and we can get a study set back by mid
January on all five and full set of plans by
end of February engineering, by end of April
or early April. So yeah, should be pretty. Pretty
exciting to see it come out. So what do you think
will be, if we're end of April that we're getting
those finalized, then we're, are we building
in 26? Well, what a great leading question. Because
we had, all of our grading plans are done. They're
not stamped by the city, but I sent it off to
a couple of grading companies and we can share
our screen. I have the, I call them a heat map,
right? I love the way, yeah. I'll just go. It's
so cool. Yeah. Where's the site low? Where's
it high? Red is usually the highest site. Blue
is the lowest and yellow. So it kind of runs
on that gradient. And Argos, our other six -home
subdivision is approximately 1 ,500, maybe 2
,500 feet from our Westridge project. It is running
two months behind Westridge in terms of approval
and City Henderson, all those things. And the
export from Argos is exactly, I'm not even kidding,
down to the cubic yard of import needed at Westridge.
Isn't that funny? So of course we need what's
at Argos at Westridge. Westridge is ready in
April. Argos is ready in June. So do you save
approximately $70 ,000 per subdivision? $140
,000 total over 11 houses. That's a lot. It's
about $12 ,000. I mean, when we're talking $1
.5 million homes, do you stall on essentially
$13, $14 million worth of houses for $140 ,000?
I don't know. Those are the things that we have
to figure out. Now, is there a strategy to be
building? I think those decisions will be dictated
by the market at the time. If we're in a hot
market, maybe that $140 ,000 doesn't, you know,
if you get get the homes on the ground sooner,
then we can, you know, keep that moving. If the
market's a little bit stalemate, then we haven't
lost anything in that timeframe, because... Yeah.
Yeah, so I think those... Yeah, if we were...
If 26 or mid -26 looks like... It's hard to believe
we're in December and we're already talking these
neighborhoods could be started in first quarter,
let's say, early second quarter. Both will likely
start inside a second quarter, which is pretty
cool. It's just, I don't know. I was hoping the
market would get hotter by the end of the year.
And don't get me wrong, I read that mortgage
applications are up 11%. They're the highest
they've been all year. So that is a good indication.
We were celebrating that back in October. That's
continued to rise. Yeah, that has steadily risen
throughout the year. So yeah. It has. Great to
see that it's continued. I think what we're seeing
is that you've got the rates that are one full
point lower on average than they were on average
last year. More inventory, more to look at, and
maybe people are hunkered down for Christmas
right now and you see a little bit of a surge
in spring, I hope. You also see more listings
in spring, so I don't know. Your guess is as
good as mine, but if we have the buyer demand
there and ultimately we only have to pull 11
luxury buyers out of the market and we don't
have to do it all next year, we could do half
of it. Like you mentioned, If we're slow rolling
it, maybe there's a strategy there. And I also
love the idea of homes that are designed all
the way up through engineering, but maybe not
permitted. And we have 11 lots to pick from,
but we have two in the ground, maybe one at each
neighborhood. And then we sell that off of...
the other, we sell the other lots off of those
objections. So, oh, this person's really bothered
by the noise on Horizon Ridge. Well, they need
to go over to Argos and buy one of our four rear
facing lots that back to the mountain. And these
are the plans that fit those. And if you want
to go to contract now, when we're just in the
planning phases, or even if I'm completely permit
ready, we can still make these changes now before
we break ground and run it through that way.
There's all these little things that Trying to
strategize and think about and I don't think
that I'll do what we did on serene, which was
Bound out six houses. I think it's gonna work
out just fine permitting ended up slowing us
down on some friends anyway So they're not gonna
finish all at the same time as it is There's
probably from the time the very first one lot
five finishes To the very last one, which is
looking like a lot six oddly enough. They're
extorted each other So they're gonna have to
live next to that construction that might not
finish until July of next year, maybe August
of next year, the first one finishing in April
or May. So there's as much as a four -month window
between the two. So that being said, I don't
mind if it goes that way, but I do not intend
to pull all 11 permits or even all five permits,
all six permits, whichever neighborhood we're
working on. I don't intend to do that based on
today's market conditions. I'd rather slow roll
it a little bit and just pretend that these lots
are in our inventory the way that every other
nationwide builder has lots in inventory. They're
just not, and I guess you're paying money and
costs on them, interest taxes care. I get it.
But sometimes slow rolling it, selling the upgrades
as we hone in our process of selling people upgrades.
We can see additional margins on that front too.
uh, more guardrails. And I think, you know, having
a, a director of marketing, client relations
and youth has helped us to kind of craft that
system and that craft that set up to say, okay,
here's our policies and here's how we upgrade
it. And you've got seven different checkpoints
and you continue to build that out while we're
working through Serene. You're building that
out as we speak and we'll have that to build
out and we'll have, um, kind of the restaurant
open when the lunch rush comes in. That's kind
of where I'm at right now. And I'm okay with
that. I'm okay with... I love what we do. So
if it takes us three years to build out our next
few communities, that's cool. It's just more
time doing what we love. And we've got other
exciting things in the works, such as that townhome
community. That's going to be one that... You're
not going to build all 24 at once, but you're
going to probably have to build two buildings
at once. And if they're buildings of four, right,
you're going to have to at least build eight
at a time, but they're $300 ,000, $350 ,000 units.
So it's not as big of a, a big of an ask, but
that's something you have to solve. And then
as a matter of strategy in that with the town
home community, you have to decide, do we sell
all, you know, if they're one building, do we
sell that whole building before we release another
building? Whereas in a, in a community where
we're building, you know, five or six homes at
a time, you don't. necessarily have to strategize
exactly about that, right? Because can they get
a certificate of occupancy if the home's next
door, if the whole building isn't done? I mean,
so some of those things that go into multi -family
that we don't have to worry about on Argos or
Westridge. Exactly. And they're really just one
-off lots. And I think there is a buyer. And
let the rest of the community sit. It could.
And the only reason I'm not, I'm wanting to do
at least like one or two and planning the next
few lots is that I just know how much unknowns
kill the sales. So I'm trying to have at least
everything planned and maybe rendered. But other
than that, yeah, I'm not opposed to one was completely
built and sold and done and they're living in
there and then we got a break ground. No, they're
going to love us because they're going to have
to be working next door to us. Right. But maybe
not. But yeah. Right. Ultimately, I think that
that might be what it looks like. I think it's
going to look more like that than phased, meaning
all one phase or even two phases of three. I
mean, there's Just don't think that's where these
neighborhoods go. And the beauty of it is that,
yes, I've spent some money on, in this scenario,
I've spent some money on architectural and engineering
so that when I am ready, I'm ready, but it's
cheaper to change it now. Let's say the market
changes really for the best, the best case scenario.
Like, wow, these actually became $2 million homes.
Maybe we should bump out the... back of this
house five feet and running all through architectural
engineering. And now it went from 3 ,600 to 4
,100 and we can sell it from little changes like
that. Oh, I didn't plan on having another ensuite.
Let's change this to a second master suite or
something along those lines. So that's the beauty.
You can kind of adapt and, and, and zig and zag
as the market gives you that feedback. Sure.
Sure. So, and we, we are now big enough to almost
always have a house ready. So we sold a lot of
lot one off of Serene, off of a house that's
done and staged in a showcase home in Lake Las
Vegas. We would have never been able to do that
a year ago even. So imagine what this looks like
in a couple of years. And I wasn't sure how that
was going to translate going to Lake Las Vegas
to see a house that's going to be built at Eastern.
It's a different plan. Just trust us. But it
was show and tell. And our sales agent was able
to show them these upgrades and this is included,
this is not. And then you're able to reference
when you're walking them through. their, their
upgrades and say, remember that tray ceiling
at the house you saw that's $1 ,100. And you
want how many of these and you know, those, you
know, the double stack cabinets you saw that's
included, but the curios on the side with the
lights are not included. Do you want that? So
it's just nice to have kind of a visual reference.
And as you build out our website too, I know
you have these little links that say. Here's
without a tray. Here's with the tray. Here's
a reverse tray. It's lit up. Here's the cabinets.
So it'd be really nice. Maybe we can do something
like that with concealed appliances. And we kind
of have gone through all this already to say,
this is a really great show and tell for us.
And I think that's how Westridge and Argos are
going to build out. I mean, in my gut. So, I
mean, there's a world where I just decide and
I'm having, this is why I want to get all these
together. Maybe I just... do the architectural
and engineering for lots one through three. Maybe
I don't even touch four and five until one through
three are sold. And if, well, what's going there?
A similar home. Similar. If you can't get past
that, then I don't have to tell you, because
at the end of the day, I'm not going to be able
to answer every single objection. It's all owned
by us. There is a disadvantage though, because
they're all different. If you want something
slightly different, then you can kind of leverage
each floor plan against itself and make sure
that you're getting people who really love exactly
that. Yeah. You're giving them choice. A lot
of it's illusion of choice, like the small, medium,
large jumbo popcorn at the movie theater. There
really is no medium. It's the largest medium.
But it pushes, right? It pushes you to jumbo.
The jumbo's only 80 cents more. And it's just
a little better. Yeah, exactly. It's only 20
cents more. It's a dollar total. That's really
what you're paying for because, you know, the
containers get a little more, they get skinnier.
So it's not really more. It just looks more impressive.
You have more shame as you walk to your movie
theater. Yeah, I'm going to eat this whole thing.
Exactly. This is for the whole row. I was going
to share with everybody. Anyway, so those are
the exciting things that we're working on. This
is 25 and Serene's doing well. And I know you
post content of the Serene project. And it's
going to be right around this time that we'll
be talking about the Westridge and the Argos,
which is really cool. Maybe every quarter three,
quarter four, we're kind of in the thick of it
with another subdivision. Yeah. And we always
have stuff going on in Lake Las Vegas. We're
closing on another lot, Christmas Eve, actually
23rd, probably. So that'll be another large two
story, 4 ,200 square foot home. did the 12 foot
ceilings on that one on the main level, trying
to make that maybe a little bit of a signature
move that we do when I think about what kind
of cool features I would want to home. I would
love it. Those types of little things. Prep kitchens.
I'd love it. A pool bathroom. I'd love it. Let's
do it when we can. If we can, let's do it. And
it's something that most builders are not taking
that time to think about. And I can't underestimate
that, that draw that we have that we've taken
the time to think about those things. Right.
Because you're not putting... Yeah, you're not
putting the in a typical community. They're not
putting those floor plans back through the architectural
and engineering They've got their floor plan.
It's approved. They're gonna cookie -cutter that
all across the whole community However, many
lots they have each of these, you know like that
so you come up with the concept let's let's find
a way to incorporate this I don't know what it
is the the Prep kitchen because that's kind of
the thing that people are looking for now. So
we do that so But you're not afraid to put the
money into doing that so that you can build exactly
what's current and what the market is asking.
We're in that area. Exactly. And Taylor, and
let's face it, demographics are, we're not, you
know, probably not supposed to talk about this,
but we know what is in that area. It's younger
families, it's affluent families. It's a great
school district, maybe some multi -generational,
different ethnicities. And let's cater to them
and give them what they want, what we know they
want. and be successful in that. And we know
the price point. So we know what that buyer specifically
would expect in a home, typically where they've
been, what kind of home they've lived in previously.
And if that spend is going to get them XYZ with
this builder, then we want to be able to match
and offer even more of what that would mean in
another community. Exactly. And yes, hopefully
we're building something that resonates. Everything
you mentioned is exactly what keeps me up at
night, which is why I've scrapped 50 other floor
plans, because you draw it. I wish I could laugh
thinking that's, you know, you're exaggerating.
No, but you really are. You really, there have
been that many. It probably is. Honestly, I wish
I were exaggerating. I know. That's what I'm
saying, is I wish we could laugh together about
the, you know, your exaggeration. Oh, that's
ridiculous. I know how many, I mean, I've seen
how many there have been. Yes. Do we go small?
Do we go medium? Do we go extra large? I have
four different versions of an extra large product
for all five lots. We started with townhomes
on that lot, so we were definitely... We've come
a long way on that one. Yeah. So lots of exciting
stuff in the Trust Home Builders next year, really.
I mean, I think this kind of builds us out through
the next few years. And I know you're looking
at other lots. There are other parcels and projects
and potential out there for us too. Yeah, there's
definitely a goal in mind of another serene type
project, maybe in another area, low density area,
but that same product has done really well to
resonate with people. Um, as it finishes, there's
certain things, just like for instance, I designed
those 18 months ago. And although prep kitchens
were big at the time, they weren't nearly as
big as they are now. They're in every home magazine.
And just not as easy to put in. It just was,
it was a bigger, yeah, it was a bigger. And none
of our serene homes have a prep kitchen. So it
already shows you that well. We probably could
have done better on that, or we probably, but
who... Well, 18 months ago, and they all have
a good pantry, so I think that's another thing
that people are looking for. So I think that
the pantry is sort of the previous prep kitchen.
Now the prep kitchen is the new pantry. So now
what I'm doing, just to give a little teaser,
is I'm doing a prep kitchen, and then through
that, I'm calling it dry storage because it's
not quite a pantry. but it's dry storage. So
it's an L shaped prep kitchen or a linear shaped
prep kitchen with another, let's say that's six
feet here and 12 wide. There's another six by
six fully shelved storage, either behind or through
one plan has it accessible from the kitchen,
from the prep kitchen. So you can get and go
around the back stove area and go to the prep
kitchen. You can get to the dry storage from
the prep kitchen or from the kitchen. Yeah, that
this is the little things that are I really can't
wait to see these designs really cool And I imagine
that whole thing with great finishes 12 foot
ceilings Maybe that interior door to the prep
kitchen has a transom window above it because
there's so much room between 8 foot door with
a 2 foot transom above it of glass like old Craftsman
style homes had I mean we can get really Really
creative that stuff that people just don't see
especially under one five Maybe they're seeing
it in four to five million, but they're not seeing
it in these price points. It's scaled down Yes,
is it only three or four of those doors that
are really cool? Yeah, but that's pretty neat
One has an office with the double door. I want
to do double French doors transom window above
it How cool is that? So that's why it's been
hard to pull the trigger on it until we knew
for sure what we were going in So love it Yeah.
Love it. Lots of great stuff on the horizon.
And once we have numbers in, once we can tally
up what has happened throughout 2025, obviously
we'll be doing for you guys an episode, early
Q1, where we kind of wrap up in 2025 as we start
talking about some of what we see happening in
the market as a whole in 2026, what some of the
economists and analysts are predicting and what
we have seen that gives us some sort of historical
reference for where we think we're going. Right.
Yeah, we'll give you guys more information on
all of that. So we will have more coming. So
thanks. All right. Appreciate you, Michael. We
appreciate your insight. And thank you guys for
joining us on another episode of Trust the Process
podcast. And we will see you again next time.
Thanks. Bye -bye. Thanks for tuning into the
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