COVID-19 and construction series: Southeast U.S. region

Paul Wurth:

You are listening to “The Building Code,” a podcast by Buildertrend where we talk all things technology and construction. Be sure to stick around to the end of the episode where you can find out how to be a part of The Building Code crew. Let’s get it.

All right, everybody, welcome again to another episode of “The Building Code,” a special regional series we’re doing here, looking back in 2020. Today, very happy to have a friend of Buildertrend. We have Paul Ledet from Chris Ledet Homes. Welcome, Paul, to the show.

Paul Ledet:

All right, you all. Thanks for having me. I really appreciate it.

Paul Wurth:

Why don’t we start here? You’re in our Southeast region part of the podcast. Can you just tell me about your company name, your name and the rundown of your business?

Paul Ledet:

Yeah, sure. Obviously, I’m Paul Ledet. The name of our company is Chris Ledet Homes. It’s a company my dad started almost 40 years ago, so I’m second generation home builder. My dad built the company up in the 80s, went through the oilfield crash, barely made it through that. If you can remember, almost picking up and leaving in the 80s and go and find work. And you built a good name, obviously, and made himself an icon, I guess, as a builder here.

He is one of the premier builders. Good reputation. We take care of our staff. We follow up after the job and we built on that foundation. Basically, over the last maybe six years we’ve been with Buildertrend, or maybe five, five or six, we basically been taking it from the mom and pop paper to completely change it to online based, computer based.

I’ve been, I guess, the owner of the company for about four years now. That’s been good. My dad works for me just a couple hours, but he does a lot. He helps with some estimating and keeping an office.

Paul Wurth:

How are those annual reviews with your dad?

Paul Ledet:

How are they?

Paul Wurth:

The annual reviews, yeah. How he did? What he can improve on? You probably won’t do that, right?

Paul Ledet:

Funny words. He goes through phases. He doesn’t want to work as much. He’s like, man, I don’t have anything to do. And then we give him some stuff to do and then he gets overwhelmed and then we pull back. It’s like a seesaw. Then he’ll find something to keep him distracted and he comes down like, what do you all need me to do?

No, it’s good. I feel like I’m very fortunate to have him. He’s taught me a lot, and we talk. Some weeks we won’t talk just because we’re both tied up but he’s always there for a phone call.

Paul Wurth:

That’s great. Yeah, that’s a ton of knowledge there for you to lean on.

Paul Ledet:

Yeah. We call it 40 years of mistakes. He does come check. He likes to go check on these jobs and different phases right before we pour foundation. It’s always, like we said, I don’t want to make that he made already so it’s just kind of having that extra set of eyes is always good.

Paul Wurth:

Yeah, for sure. How many other employees you have now?

Paul Ledet:

Now, it’s me and two girls. I have an office manager and I have a marketing and salesgirl. They’re both wife and a fiancée of friends of the family that, man, just dumb luck they landed in my lap.

I was looking for someone, I guess, into the year and Kate, she’s our office manager, I come to find out she always wanted to be an accountant, but her mom wouldn’t let her go through it in college. But she’s certainly really good, really good at it. We found that out the beginning of the year. Just man the phone calls. I was having a hard time keeping up with leads and following up and keeping that stream of customers in, and so I made a decision in October of this year to hire on another girl to help with that and streamline it and process and then work with our customers and selections and stuff. It was just becoming too much for me and Kate to handle. It’s been good.

Paul Wurth:

Yeah. I mean, that’s a small crew for being in business for 40 years.

Paul Ledet:

Yeah.

Paul Wurth:

How many jobs you guys like to do a year? What’s your typical target that you’re trying to hit?

Paul Ledet:

Oh, 10 to 12 a year.

Paul Wurth:

Geez! That’s a really small team for 10 to 12 years.

Paul Ledet:

Yeah. Well, honestly, we never did that much before, but I’m with Buildertrend. It really makes it easy. I’ve got a fantastic sub-base subcontractor, a force that really took me a little while and vendors took them a while to get in the groove. But I’ve got a good solid group that, man, they just really bought into the whole concept of being alerted when up job is coming up, bidding, I mean, just bidding alone. The ease of that has really allowed us to go after a lot more because they’re so much more efficient.

And then, of course, they follow the program and now they’re getting paid through it. They just see how easy it is. All of that extra work that it used to take to write checks and follow up and do this and do that, Buildertrend does 80% of the work. You just have to got to have everything in place.

Paul Wurth:

Right. Yeah, kind words. Really appreciate that. I mean, you’re a friend of the company. You know there’s a small group, because you’ve been here … I know you’ve been here once to Omaha for Buildertrend.

Paul Ledet:

Twice.

Paul Wurth:

I thought so.

Paul Ledet:

I’ve been to Omaha twice.

Paul Wurth:

Yeah, and we’ve shared a couple beers and some stories. We appreciate your friendship, we appreciate your kind words and, of course, your business. So, you’re based out of Louisiana.

Paul Ledet:

Right.

Paul Wurth:

What part? Because I’m not super familiar.

Paul Ledet:

I like to tell people if you look in Baton Rouge and New Orleans on a map, I’m almost right in the middle of them, 50 miles southwest of New Orleans and 50 miles southeast of Baton Rouge. I’m down there. We’re about 25 miles from the coast. Down here, I think the only other big town below us is You know, down here, so we’re, I think the only other big town below us is at Houma.

Paul Wurth:

So, you got a big city in New Orleans and you got a huge college town, Baton Rouge?

Paul Ledet:

That’s right.

Paul Wurth:

I’ve always wanted to ask this, so bear with me. LSU won the national championship about a year ago probably, right?

Paul Ledet:

Yeah, a year ago.

Paul Wurth:

About a year ago, yesterday or today. Do sales pick up at that time? Are people excited? Just huge LSU people and they’re like, while they’re laid, it’s like, screw it, we’re going to spend some money?

Paul Ledet:

I would say, after last year, maybe? I think they got a little excited coming off a couple bad years, and this year was terrible. But no, we do get some extremely enthusiastic LSU fans that …

Paul Wurth:

I bet.

Paul Ledet:

… that makes a big difference when you’re building a house during the football season.

Paul Wurth:

That’s what I’m saying. Yeah, that’s interesting. So, you’re the first company we’ve spoken to from Louisiana. So, let’s just take it back to March 15, 2020. What was it like then when we all collectively realized, okay this is a real thing, this is happening? How did it affect you and your team?

Paul Ledet:

I’ll back up a little bit. I think I kind of shared with you a little earlier I was building a new house, a new office. A new office and house. Personally, I was going for a big milestone in my life. I’m on third year of owning the business, or fourth year of owning a business. My office manager, Nancy, who’s like a sister to me, who had been with the company for over 20 years, left in December, so we were looking for somebody else to help build the shoes. We already had a couple of gut-wrenching things going on, just big changes, et cetera. When that happened, honestly, I was terrified for about a week.

Paul Wurth:

Yeah.

Paul Ledet:

Where are we going? Where is this going? You didn’t know what to believe, you didn’t know what to hear. I just heard a lot of, they were talking about shutting us down, our industry down as a whole. I had some big projects coming up and I didn’t know if they were going to start. I had to make a decision, after about a week, that I can’t just live in total fear. I’m going to follow the guidelines and the rules and I’m going to just keep powering on safely. That’s what we did. It was a big eye opener. I think, as a new adult, 34-year-old, I think something that we experienced in March is probably a big life changing event that I don’t think that our generation have really had. That rocks the boat for us as adults.

Paul Wurth:

For sure. For sure, man. The only thing I can think of is the downturn tails in the industry that your dad probably …

Paul Ledet:

2008.

Paul Wurth:

… yeah, dealt with, but then also 9/11. It’s sort of like that ilk. It’s like, it was crazy.

Paul Ledet:

That’s right.

Paul Wurth:

The unknown was the thing, right? That’s what everybody talks about.

Paul Ledet:

The unknown.

Paul Wurth:

You’ve got an interesting perspective. It felt like you’re feeling, okay, I took over my dad’s company, I’m the owner now, I’m getting my feet under me. Man, I’m having some success. Things are good, and then it’s like, oh man, is this all just going to fall apart right in front of me?

Paul Ledet:

Pretty much. Pretty much how I felt for about a week. I mean, it started to gradually go away. After fear of laughing, you kind of just let go and things fell back in place. It was monumental at the time, but it became less and less as the weeks went on. You just learn that, hey, look, this is the new norm and you got to just deal with it.

Paul Wurth:

Absolutely. Absolutely. Just kind of move forward. As an industry, I think that the owners that I’ve talked to are really good at that stuff. It’s an uncertain industry when you’re building a home and you’re dealing with so many different things, all these subcontractors and vendors, the city and state officials for permits and things like that, the weather. You can’t control things in this industry, so I think we’re set up well for that.

Paul Ledet:

And you start feeling the burden of having, you’ve got some of your customers calling you going, what’s it going to mean for us? Or what are we going to do? They start panicking and then you have to become the voice of reason for 10 people that you frankly barely know. I mean, we’re good friends with them all now after a build, but … that’s a lot on your plate at the time, but I think what’s comforting about it is everybody’s in the same boat.

Paul Wurth:

Yeah, there was definitely that feeling in it all across the board. Typically, when clients are nagging you about why aren’t we done yet. There was not a lot of that, from what I hear, it’s just like everybody know this is a once in a lifetime thing.

Paul Ledet:

Yeah. A lot of very, very cool customers during that time period. Everybody just understood that no one really knew what you were getting into.

Paul Wurth:

Yeah. So, what’s really interesting about this, Paul, is that you’re sitting, producer Danielle and I are looking at your video here, you’re sitting in your office sort of separated from your house, so it’s crazy. You were building … you said you just had a slab down when this hit.

Paul Ledet:

Yeah.

Paul Wurth:

Right?

Paul Ledet:

Yup.

Paul Wurth:

And so, did you make some changes to the design during the build knowing that this is kind of our new normal, of this working in our home?

Paul Ledet:

No. Well, actually being that I had Buildertrend, and I always knew that I wanted an in-home office separated. Now, I will say some things did change with our working environment, with the people who work for me. I did not think that we would utilize this space as much as we are. The house wasn’t even finish, and I was doing Zoom calls. I had internet set up early, and I was doing Zoom meetings out of here because I had had to find a way to communicate with potential customers, and my current customers, and my staff. So, yeah. I mean, I guess to answer your question, something did change during the build which, I guess, set the tone for how I’m actually using it now. Very remote office kind of thing.

Paul Wurth:

Good. Had you ever done a Zoom call before that? I mean, I know there are company who does those, but …

Paul Ledet:

Yeah. When I first got Buildertrend the first year, I built a house for a couple from Orlando and they only came to the project maybe two or three times. I knew about Zoom, and I was having Zoom calls with this older customer and his wife who didn’t really have a clue how to do it, but I wanted to be able to see them face to face. Basically, I’ve had, I can’t even count how many Zoom calls we’ve done in here now. I think I’ve had seven between today and yesterday.

Paul Wurth:

That’s so crazy. Are you recording them?

Paul Ledet:

I’m not recording them. I’m not.

Paul Wurth:

Okay. There’s a tip we’ve realized from the regional podcast, is that a lot of people, a lot of construction owners, are recording these calls and then uploading them to the Buildertrend client portal or just sending them to the client so that we’re all in the same page about what was said.

Paul Ledet:

That is smart. Yeah, I do need to start doing that.

Paul Wurth:

Like, here’s what we talked about and they can review it, and so that’s a good little takeaway we’ve gotten.

Paul Ledet:

I like that.

Paul Wurth:

Okay, so, you’re an interesting perspective because I think you’re the first person we spoke to that didn’t have an office out of their home with a ton of staff. The whole point of this podcast series is to get different perspectives. As a single business owner, you’re doing actually a lot of job for one person, or one or two people. What did the subsequent months look like? I know for many people there was sort of this slowdown of nobody knew what to do, so we’re pausing leads and things like that. Did it quickly come back to you as it did for most people?

Paul Ledet:

I almost feel like it never went away. We’re a little more rural, so I think that had a lot to do with it. Had that been in New Orleans or one of the cities, it probably would have been much different, but it almost never stop. I can remember feeling like, what are these people doing? I’m like, they’re fearless, I’m fearless. It was very encouraging to still have people who didn’t frankly care, for lack of a better term. Not that they didn’t care about the virus, but they didn’t care about what it could do to the economy or what it could do to the production of their home or what have you. I mean, it was like nothing happened. It was very encouraging and reassuring, and I think that helped me.

Paul Wurth:

Yeah, that is refreshing because the first thing, again, the health concerns aside, because I think we’re all concerned about that stuff and it’s been a really big deal, obviously, but it is encouraging that, I think, for the most part people were like screw this. Like, we’re not going to let this crash the economy, we’re not going to be afraid of this thing. And if enough of us feel that way and do that, then the economy won’t crash. The stock market stayed strong.

I did feel that way, and I think that was definitely one of the reasons for the construction companies coming out of this, or the industry coming out of this, really in a positive way. That and interest rates went low. Is that kind of what you saw there? Have you seen a really good year this year despite everything?

Paul Ledet:

That’s right. We’ve had a really good year despite everything. Obviously, like you said, interest rates I think are really big part of that. I don’t know what you call it, but I tell people it had a lot of catch. People that sat on the money forever and didn’t do their dream, and then whatever the pandemic did to people psychologically they’re basically like, let’s just get it, let’s do it. If we’re not going to do it now, we can’t die with it. We need to just do this project.

I think it was like an eye opener for some people that we’re sitting on projects. Like we need to do it now, and right now.

Paul Wurth:

Yeah, that’s really interesting. I heard this story, like guys would go after World War II and then the last day they would tell their girlfriend, honey, this is the last shot. I might die. You know what I mean? They kind of used that to their advantage. Same thing with end of the world stuff, it’s like, well what’s the point? We got this, we want to do it, we have the money, you can’t take it with you.

Paul Ledet:

Yeah, you can’t take it with you. Hey look, it looks like real estate is a better investment that would have added in so why not?

Paul Wurth:

Yeah. A lot of people have said that. So, looking to next year, you had a good year, what’s the next year look like for you guys?

Paul Ledet:

So far, it looks like I’m going to be finishing some projects probably in February or March. We’re starting a project soon, which is a pretty cool COVID-19 story. In about another month, we’ll be getting started on that one. And we got two or three that looked like probably April to get started, and not to mention the ones that I started in December of this year. I mean, it’s been good. I’ve been thinking we’ll have a good year already.

Paul Wurth:

That’s great. What’s the COVID-19 story?

Paul Ledet:

There’s this guy who contacts me. He’s transferring from another state. I never met him in person. He looks us up online, finds us online. I have a couple of Zoom calls with him, sharing my screen, explaining Buildertrend. He’s real, nervous isn’t the right word, but he’s real concerned because he can’t move down here, and he can’t come down here until September and he’s not going to be able to be here for the project. Long story short, Buildertrend was, I guess, a huge asset, I guess, for me in that regard. I’ve actually never met him in person. Build a nice home here in Thibodaux, I just think it’s cool that I’ve never met the guy. He saw our process through some Zoom calls, and he’s confident in us that we can pull it off and that he trusts us to get his house done correctly. Actually, we’re going to fly up there end of this month and finally go meet him face to face because we haven’t yet.

I just think it’s cool. I may not have had that in place before COVID-19. Maybe I would have kind of figure it out because we did it with Orlando, but this was much different. I mean, just going through our process that we had with Buildertrend, which I didn’t really have it all together with the guy from Orlando, and manages the transparency is going to be amazing for them, and having videos and photos for them. I just think he felt really confident that we can pull it off without him and his wife traveling down here.

Paul Wurth:

Yeah, man. That’s a dream. We always had at Buildertrend, honestly. It’s so cool to see that in real life. And again, I think, you look back at 2020 and everyone was like 2020 sucks, it’s like this is the worst year of my life, the pandemic. But there’s so many good things that have come out of it like, again, this push that everybody got in the technology which, at the end of the day, it saves time, it saves money. It’s a net win-win for everybody.

That’s a great example of that. That’s a really cool story. You have to keep us in the whip on that one. Maybe we’ll have you … when are you going to finish that job, you think? September?

Paul Ledet:

Probably September, yeah.

Paul Wurth:

We’ll pencil you in for a return to the podcast, September 2021. Danielle is writing that down, and then we’ll sort of unpack it and see how it all went.

Paul Ledet:

Yeah, I would love to do that, and love to share anything that I can with that. And you’re right. I mean, when I first got Buildertrend, it was the same thing. We did that one in Orlando and all we had set up was the selections. But now, it’s set up, I mean we’re using every aspect of it of Buildertrend now. I’m really anxious to see how it’s going to work while they’re over there and we’re 1,500 miles away.

Paul Wurth:

That’s so crazy. Never met, never been to. So, yeah, we’ll definitely follow along and then we’ll have you on at the end, and we’ll see how it all turned out.

Paul Ledet:

Cool. Sounds good.

Paul Wurth:

All right, man. Well, we really appreciate you coming on. This is the perfect time. Great to hear that 2020 was a good thing for you all in all. I’m looking at your cool house you got in your office, and we’re jealous. He has a tap. He has a keg tap right next to his desk. I don’t know if that’s good or bad.

Paul Ledet:

Yeah, I got the idea from you all.

Paul Wurth:

Yeah.

Paul Ledet:

And it works well with my customers, so it’s good.

Paul Wurth:

Yeah. Paul has been in Omaha twice for Buildertrend University, and he loves the bar area we have at Buildertrend that hasn’t got any use in 10 months, by the way, so it’s been a little lonely.

Paul Ledet:

Not here.

Paul Wurth:

We’re going to get back.

Paul Ledet:

I might have to come back up there.

Paul Wurth:

Yeah man, we’d love to have you. All right, man. Thank you so much. Really great to see that next year is looking good. We’ll have you back on in September, so stay tuned for that everybody. Thanks, man.

Paul Ledet:

All right, dude. Have a good one. Take care.

Paul Wurth:

This is Sherwin Loudermilk from Loudermilk Homes in Atlanta, Georgia area and a few other places. Welcome.

Sherwin Loudermilk:

Thank you. Thank you.

Paul Wurth:

Welcome to the podcast. Let me start off by this. Sherwin, why don’t you just tell everybody your name, your company and just the profile of everything.

Sherwin Loudermilk:

Sherwin Loudermilk with Loudermilk Homes. We’re based in Atlanta, Georgia, and we also just recently moved into the Highlands and Cashiers, North Carolina area. We have three divisions.

Paul Wurth:

Oh, wow.

Sherwin Loudermilk:

We deal with high-end, luxury custom homes.

Paul Wurth:

Okay. So, how long you guys have been around?

Sherwin Loudermilk:

I think it’s 11 or 12 years?

Paul Wurth:

Okay, nice. And you’re the owner?

Sherwin Loudermilk:

I am.

Paul Wurth:

Okay. How many people you have in your team?

Sherwin Loudermilk:

Last I checked we have 28 middle managers. We don’t self-perform anything, so they’re all organized project managers, superintendents or office staff.

Paul Wurth:

Wow. That’s a big staff. You guys must be doing some good volume. How many jobs did you do last year and what does 2021 look like?

Sherwin Loudermilk:

We just actually did our projections for 2021, and we’re looking at somewhere right around $63 million in sales. We deal with high-end luxury custom home, so our average sale price is around 2.2 million. There are larger, more complicated deals that take … our average cycle is about 15 months when you add pre-construction and construction together.

Paul Wurth:

Yeah. I’ve got a lot of questions now. Do you project that length of build is gonna go, is going to lengthen even more than 15 months or is that sort of the new normal for you, 15 months?

Sherwin Loudermilk:

No. I think it’s actually going to shrink. It extended because of COVID-19. We’re finding that getting permits that took two months are now taking three months. Our plans actually have to go into a little holding cell, which they spray off and then it takes a couple days for the inspector to come out and take a look at them. The plans have gone into quarantine. So, things like that. We’re noticing that it’s difficult to get supplies, specific types of supplies, dishwashers, for example. We were calling everywhere to get a Bosch dishwasher, we just couldn’t.

Garbage disposals for about two months were just nonexistent. We’re finding now our refrigeration that we typically put in homes has a three-month delay in getting it in. And so, those type of things that made it a little bit complicated. There are some vendors that just don’t want to work with multiple people in the house and I understand, and we support that. So, it’s pushing up that timeline. I think as COVID-19 comes to an end, we’ll see that start shrinking down a little bit more.

We’re very heavy on preconstruction, probably more heavy than in almost any other custom builder I know. But in doing that, we have a lot of planning and organization, using Buildertrend for most of what we do and that results in us being able to have a shorter construction timeframe because we’re so organized on the backend.

Paul Wurth:

I see. Just explain, if you could in your words, what being heavy on the preconstruction means.

Sherwin Loudermilk:

So, we have every single selection picked out. Maybe not the countertops because most countertop companies won’t hold a slab for that long or mirrors because they change, but pretty much, besides those couple of cosmetic items, we know every single thing that’s going to go into the house. We’ve bought out the whole house up until sheet rock including the cabinets before we put the first shovel in the ground. We want to really analyze that house to make sure that it’s perfect. We’re working with the design teams, we’re working with the architect, we’re working with the civil engineer. We put everything together. It’s not just here’s the house, let’s go ahead and start framing, and we’ll figure out the rest as we go. We want to understand it. And what we find is, by understanding it, we solve a lot of problems up front.

We tell our clients that even though it feels like it’s taking forever in this preconstruction process, we’re going to save more time in the back end and cost because we’re not having to rip things out on a regular basis just to be able to understand what you want to put into the home.

Paul Wurth:

Yeah, that’s really interesting because there’s two philosophies. One is what you’re doing, and obviously that’s super organized when we start digging and there’s not a lot of changes or change orders, or maybe there are. We can talk about that. But the other philosophy is a lot of builders would say, Hey, I don’t want my clients to pick out their selections until they can step into the frame structure or something like that and kind of get a feel for it. Do you feel the way, you guys are so heavy on preconstruction, do you find problems later or not at all?

Sherwin Loudermilk:

So, we have a very rigorous nine-step process. The first three steps are in preconstruction and then the last six are during construction and we’re constantly revalidating things. Let’s say by step three, which is our design phase, we have every single design picked out and selection picked out for the home. Well, as we’re going through the next steps, for example, like step six or seven where we’re really picking out the colors of the house and making sure that everything fits, we’ll go ahead and paint colors on every wall on multiple sides because the light shines differently. We’ll put the stain color on the hardwood floors. We’ll pick the crown up, a few pieces of crown, and paint that, too, so that clients will really get a feel for what were the selections that they made six months before and are these still the selections that they want to move forward with.

They have the choice to make a change at that point. Some will not cost any money, some it will, but at least everything is picked out and analyzed, and we’re not having to … as long as they keep their same selections, there are no additional costs back to the clients.

Some builders say that, hey, we made so much money on change orders. When you actually analyze, builders really don’t make money on change orders unless you’re charging 50 – 60% or more, which happens occasionally if you’re in a specific timeframe of the build. But really, at the end of the day, the change is causing incredible amount of delay which causes cost. And so, we’re trying to cut the fat out by planning in advance.

Paul Wurth:

Yeah. I don’t think it’s a good strategy to try to make money on change orders. A good change order manager is just trying not to lose money, right?

Sherwin Loudermilk:

Right.

Paul Wurth:

We need to make sure that if they want to change, sure, we’ll make that change but we need to charge them for the extra cost of that product compared to the one they already had. It’s not about us throwing 60% on there because then you got to actually do like 20 or 30 of them to make any actual money.

Sherwin Loudermilk:

And it doesn’t make sense. What we found, and we’ve done heavy analysis on this, if a client makes zero change orders, we make the most amount of money because we’re just zooming through that process. And again, it’s because we have everything pre-planned in advance, which is challenging to do, but we’re able to just zoom through the rest of it. When change orders come in and slow down the project, now you have all of those indirect costs, delayed insurance, salaries. Those kind of things really start eating into your profit much more than what you would receive over a change order.

Paul Wurth:

Right. And when you start doing some of this analysis, this is a question I’ve always wanted to ask and a few builders do know this, do you break it down, like do you know your cost of every day longer on a job than you are? Like, is it $200 a day Is it $2,000 a day? Do you guys have that broken down?

Sherwin Loudermilk:

Absolutely. We actually look at it based on an ROI. Every two weeks of delay is one point of an ROI loss or gain. It’s that significant. Now, it depends on the type of projects. We are entry level as a million-dollar project, and we go up to six million. So, obviously, the cost of the project and the delay will change, but we analyze that pretty carefully, so that we understand what our total projected profit would be on the project.

Paul Wurth:

That’s awesome. How far do you cascade that information within your team? You know, there’s a philosophy where, as far down as you go, you’re going to get the most benefit out of it. Do you follow that? Or what’s your thought there?

Sherwin Loudermilk:

Absolutely. Everybody in our company is connected to what we call a company dashboard. It shows the profitability, gross profit, so that you can truly see what the profit on the specific project is. We send that to every single member of our team, and we talk about it once a week. During our project overview weekly meeting, which is basically are just project weekly meetings that we have, we pull out that dashboard and say, okay, you just last three days and you just lost $3,000. Why? And it’s marked on red. Nobody wants to be on red. None of the builders want to. If it’s on green, that means they save time, or they save money or combination.

We look at that very carefully to make sure that we’re not missing days, or we’re not missing money mostly just through losses, right? Are your houses clean? Are your LBLs laying in the mud? Are you having to bring in especially services to redo things? How organized are you? That’s really where we see most of the losses because we’re so organized up front.

Paul Wurth:

Man, you guys sound like a tech company. It was just great. I mean, talk about data and insights. When did you start doing stuff like that? For the listeners who should, if you’re a business owner in construction, should be doing exactly what you’re doing. I’m sure you’ve seen the benefits of it throughout your team. How did you get started on that and what are you actually using for a dashboard?

Sherwin Loudermilk:

Well, I’m a computer nerd. I have a computer science degree and then I worked at IBM for eight years, and part of my tenure there was as a process consultant. So, I understand the concepts of technology and processes and how efficient you have to be because in the technology world, if you’re creating a software, if it doesn’t tick and tie correctly, the whole thing crashes. It’s not like a house where if it doesn’t tick and tie together you can fix that one portion, and the person can still move in.

We have incredible amount of processes in our company, and it stems from that and the last 11 years of work that we’ve been doing to perfect those processes as best as we can. It’s construction. Nothing’s perfect, but we thrive for perfection on following the process.

Paul Wurth:

Wow. So, your background at IBM showed you how being efficient having a process for everything delivers at the end. How did you get into construction then? What was that lead about?

Sherwin Loudermilk:

I just wanted to be out of corporate America, seeing an opportunity. Family was dabbled in real estate, saw an opportunity and put my resignation in and just went for it. It was a tough decision but worthwhile.

Paul Wurth:

That’s interesting. We always talk about this on the podcast, especially when we’re talking to company owners like yourself, that leap into your own business. Whether you were on a framing crew or had a framing company and said, hey, you should start your own building business, and you went and  did it, or you went from corporate America. A lot of guys in your position, I would assume, would maybe do one foot in one foot out and maybe start at sort of a side project like a home if you had the capital and still stay employed. Your decision was just to do full leap.

Sherwin Loudermilk:

Well, I went and got my MBA in real estate and finance, so I could understand it. I was leaning more towards investment modeling in real estate. I purchased a few properties and realized that I needed to do some renovations on this property. That’s kind of how it started. As the renovations continued, I realized that the more of a home you can build, the more opportunities you have. If it’s a complete tear down, there are a lot of opportunity for profits there. So, that’s how I kind of built into it and then eventually my wife helped me with the business as I was still in IBM and it was essentially her business, and I was helping her on the weekends. And then about six months into it we realized, wow, there’s a lot of possibility here and that’s where I put my resignation.

Paul Wurth:

That’s awesome. What a great story. So, here we are 2021. You guys said that you had a record in 2020 even though you basically had three months of dead time, like most of us. That window is shorter for some people. You’re obviously in the southeast. And now, 2021, you’re having your best projection.

I had a question about projections. I know this is supposed to be about COVID-19, but we’re going to talk about 2021 because I think this is helpful for a lot of other business owners out there in construction. You said you’re projecting somewhere in the 60 million of new sales in 2021. How do you guys back into that as a business? Where do you start with your sales projections? You can tell as much as you’d like, but I think maybe help some of the owners out there. If they don’t project the next year, how would you recommend they start doing that?

Sherwin Loudermilk:

I think you have to project. If you don’t know where you’re going, you’re never going to get there. And so, we analyze what we have as far as our pipeline. We know he have a conversion rate of around 15 to 20% based on specific, where we stand. In Buildertrend, which we uses our CRM tool, we have a competence meter and if we’re at a 60% confidence, we know that we have certain odds of closing that deal. We’ve analyzed all that. We know that if we just take historical presidents, we should be able to land a certain amount of those deals.

In addition to that, we’re also a developer. We own land through investment models, and so we know that we’re going to be building a certain amount of spec homes. We know historically a certain amount of those houses, additional lots, will turn into custom presales. We’re taking kind of a combination of all of those ideas and, again, using historical data and analysis to project where we’re going to be. We have sales teams. If we’re dealing with a real estate environment, we use Berkshire Hathaway, and they help us depending on the areas. We have three different divisions or three different real estate teams within Berkshire Hathaway, and they support us in those different areas, and they tell us where their projections are as well. So, it’s a collaborative effort to come up with where we need to go, and then we break it down. Once we have our yearly goals, we break it down and every single salesperson knows where they need to be in the next 30 days.

Paul Wurth:

Wow. Great stuff right there. For people who are not doing that, it’s super important. But the whole backbone of it all is you got to track it somewhere to even be able to look back.

Sherwin Loudermilk:

Sure.

Paul Wurth:

Right?

Sherwin Loudermilk:

Sure.

Paul Wurth:

And that is if you can.

Sherwin Loudermilk:

Well, prior to this, we had our five-year planning review with our senior staff. aAain, being a consultant at IBM, I used a lot of the skill sets I had there to create this one-day seminar. And we use thoughts from “The ONE Thing” book of how you analyze and figure out what’s the most important thing that you need to do for the day and then we took the Eisenhower four quadrant concept of what’s important versus urgent. Once we created our SWOT with our strengths, weaknesses, opportunities and threats, we put it all together, and we created our five-year plan then we back that down from five years to one year to say, okay, what do we need to do within the next one year to accomplish these five-year goals? And then, we even backed it further down into 30 days. So now, all senior leaders have our next 30-day marching orders of where we need to be in order to hit our goals for the five-year plan.

Paul Wurth:

Wow. So, the importance of bringing your senior leadership in, obviously, that’s just to get their buy in and then be a part of the process and goals, also teaching them some business acumen and some personal organizational stuff like the most important thing of the day. That kind of thing, right?

Sherwin Loudermilk:

Well, it’s more than that. We’re not a dictatorship, right? We’re very much a democracy within our company. We have incredible culture because of it. Everyone knows that we run our business like a family-oriented business. We’re always striving to live above the line and being completely transparent to everybody. The senior managers are basically creating the vision for the five-year goal. It’s not just me coming down. I mean, obviously, I’m very influential on it but we’re wanting to make sure that everybody has a say in where we’re going and we use everybody’s ideas. I’m a humble builder. I don’t mind if somebody challenges that. I want people on my team to challenge me to come up with new ideas.

Paul Wurth:

Yeah. As they say, if you’re an owner of a business, the last thing you want to do is be the smartest guy in the room, right? When you got all your employees out there.

Sherwin Loudermilk:

Exactly.

Paul Wurth:

That’s not a good thing. Man, you’ve got a lot of great … well, first of all, do you consult? If so, give me your phone number to all other homebuilders out there because they could use some of this. This is how you set up a business.

Sherwin Loudermilk:

I have not yet, but I do give advice here and there.

Paul Wurth:

All right. Well, they can connect with you through LinkedIn or Instagram, I’m sure. You guys have a nice website, I was just out there. You guys have been with Buildertrend for many years. We appreciate that. And you also said that you guys are looking to, or you already have expanded into another state. What was that decision process like and what are some of the challenges that come with that sort of expansion? Whether it’s another location or it’s another location in another state.

Sherwin Loudermilk:

Sure. So, we had two divisions in Atlanta and then North Metro Atlanta, only about 45 minutes, maximum an hour away. You know, Atlanta traffic is pretty heavy.

As part of our five-year goal last year, we said we want to go into a new market. We analyzed everything within a four to five-hour drive time around Atlanta. Florida came up, parts of Alabama, the mountains of Georgia. We were really looking at where’s the best place to move into. Highlands and Cashiers, North Carolina is very similar demographics to what we currently sell. In fact, 60 – 70% of people that buy a second home there come from Atlanta. And we’re selling to high end luxury people, very affluent, very wealthy, and so it just made sense. We’re not having to advertise to a different demographic. We’re still going after the athletes, the doctors, the lawyers, the business owners, the producers. It just made sense to naturally go into that area. Highlands and Cashiers is probably one of the wealthiest mountain communities east of the Mississippi. Definitely in the Southeast. It was a natural fit.

We did a lot of research. I think it was nine months of due diligence to make sure that this was something we want to do. It’s two and a half hours away from Atlanta. Is it worth the time? Is it worth the drive? We have a lot going on in Atlanta and in Metro Atlanta, so it wasn’t that we had to but we did want to open up and to diversify our portfolio. And it just seemed, after all that due diligence, that it made sense.

Paul Wurth:

Yeah. So, during your five-year plan, what was the decision? Why would a company want to expand? Is it for you to say, look we’ve got a good thing going here. For lack of a better term, we’re better than a lot of the other home builders here in Atlanta, and I think it’s probably because of our process. Right? It sounds like you guys have a good process. So, is it just like, hey, I bet we could be top tier builders somewhere else because it would be sort of the same thing. Is that it or what is it?

Sherwin Loudermilk:

Partially, it’s really just to diversify. If we go into a mountain community, which is for second homes, that’s a different type of sale than if you’re in Metro Atlanta and most of our clients are transferees. It’s just a different model, and it felt like it gave us the diversification to where if one of our locations struggles, the other one’s going to pick it back up. We find that during recessions or bad times, different areas fall at different timelines. So, the mountain community in Cashiers and Highlands fell really in 2010, 2011 whereas Atlanta fell in 2008, 2009. You use that diversification to help you move through any of the bad times if they come, right? I mean, they will come eventually in the years, in the future.

Paul Wurth:

And you can diversify, just for other business owners, within your own location, right? So, you could decide to go into remodeling or a specific style of remodeling, or you could go entry level, mid-level, high end. You’re saying that, for you, it is important to make sure you were diversified as a business, so that just the whims of the economy don’t just swipe you out if, like, Atlanta lost their top five corporations or something like that.

Sherwin Loudermilk:

Exactly. Exactly. And I don’t see us really growing much more than this, but it was a great diversification for what we have. But for me, I want to focus on a specific product and a certain level. We have incredible processes for our clients. The amount of energy and money that we put into preconstruction, for example, we just can’t build a half a million-dollar house. There’s just that much effort. Three to four people are dedicated to that house in the beginning, and so we realized that we don’t want to change our processes, we just want to change our location. And so now, we are going to keep those same processes throughout Cashiers and Highlands, North Carolina as we would in Atlanta. But to diversify ourselves within Atlanta, for example, we just opened up a pool company.

Paul Wurth:

Oh, great.

Sherwin Loudermilk:

We are now able to capture that same clientele to build a pool for them. We have in-house architecture where we’re doing a lot of architecture within ourselves, then we still work with outside architects. For those clients that just need something quick, we’re able to use that. So, we are diversifying ourselves into other categories but we want to stay with the same clientele.

Paul Wurth:

Yeah, that’s super smart because obviously pool builders are built out for like two years right now, which is amazing. So, when you do something like that, do you just layer your process, maybe sort of edit it a little bit, but it’s sort of just, we’re gonna take what we do in terms of concept, and we’re just going to apply it to this product.

Sherwin Loudermilk:

Exactly. We worked with so many different pool companies and what we found is we’re basically managing their pool company. The only thing we didn’t do is design the pool, and we have designers on staff. We already deal with the graders, the electricians, the plumbers, the concrete guys and so it just didn’t make sense why are we using a third party, giving up some profits too. But the main reason is why are we at their schedule? Why don’t we just incorporate this back into our processes. And now, we know exactly what we need to do throughout the process and we’re controlling our own destiny on that pool.

Paul Wurth:

That’s awesome. I feel like we can just keep going for another hour. Maybe we’re going to have you on again in 2021 because I just love unpacking how you set your stuff up.

One thing I wanted to ask you as we sort of close and talk about COVID-19 again, you had mentioned in 2008, and a lot of people who have been on this regional series have mentioned that, do you feel like going through that, to whatever degree you were as a business at that point, helped you in any way or prepared you in any way for COVID-19?

Sherwin Loudermilk:

Yeah. I think I still have the scars somewhere to prove it. Yeah. I mean, look, it was a tough time for those of us that were living through 2008, 2009 with a business. I know a lot of people that still haven’t come out of it. We were really fortunate that right at 2009, we switched our model around to an investment-based model. Meaning, I had to give up 50% of my profits at that time, but I used investor money to be able to buy property, and we were doing renovations, buying things on the courthouse step. We got to the point where we’re doing about 35 a year by about 2011, 2012. We were doing a lot of renovations, but they were flips.

So, that investor model is what I used to move forward to building out developments and buying land. That really stabilized our business to where if we don’t have a custom home come up, but we have the resources, we can just quickly do a spec home and keep our resources in our slot board slotted out perfectly because we can control the specs when they come in, and we can’t really control the customs when they come in, and it always happens where there’s two or three that come in at the exact same time, and you’re trying to diversify, kind of push that out.

So, yeah, there’s a lot of great lessons that I learned. Cash flow I think is even more important than profit from what I went through in 2008, 2009. Not being over leveraged. When we do spec homes, we’re not over leveraged at all even if we do get bank financing. Maybe it’s 50% loan to cost, 30% loan to value. So, being able to put your head down and have a strong cash position through investment model is was really important to me. Probably the best lesson that I’ve learned.

Paul Wurth:

Back in those days it was about, like, hey we just need to keep jobs coming in. Whether we’re making a ton of money or not, we need to keep the wheels going on this thing. Definitely tells me in 2009. So, that investment model allowed you to do a lot of volume. Maybe you weren’t making the money you wanted to make but your business survived and here we come spit it out, 2011, 2012, 2013 then we start going again, right?

Sherwin Loudermilk:

Right. Exactly. Those renovations were pretty good. We were buying things for 20 cents on the dollar, adding another 20 cents on the dollar, so we’re 40. We’re selling it at 85 cents on the dollar, but a fully renovated house in the middle of a really good part of town. And so, everyone’s looking at it, going, well, I could … one of the two houses that we’re selling at that time, either dump foreclosures or fully renovated, perfect designed houses. We were capturing both of those sides of the market, so we made pretty good money in 2010, 2011 but it wasn’t the business I really wanted to be in. I didn’t enjoy the flipping of houses, but you have to do what you have to do, right?

Paul Wurth:

Right.

Sherwin Loudermilk:

You have to keep the engine going. And so, in 2011 is when we realized that we could get back into new construction, and that’s where we slowly started moving away from renovations. We still handle a few renovations here and there, but they’re usually full house renovations. Most of what we do are new construction.

Paul Wurth:

Well, it’s great that you guys learned a lot in 2008, 2009 and were probably ready to apply those in March and April when it was like not knowing how this was going to shake out. I speak for the entire industry where it’s been good for everybody in construction and we’re really happy about that, and 2021 looks like you’re going to have a banner year. So, we definitely wish you the best. We really appreciate you unpacking some of your philosophies behind your business and really sharing a lot of how you set things up. I think that’s really important for us to continue to elevate the industry. I think that you probably share that. We’ll have you back on because, again, I have a list of questions I didn’t get to just about how you’ve set up …

Sherwin Loudermilk:

No, no, no. I’d love to. Look, I’ll be honest with you, Buildertrend is part of my success. It really is. I mean, we use it as a strategic tool not as a, oh shoot, I have to do a daily log or oh, darn, I didn’t update my calendar. We’re using the tool as a function of how we run our day to day business, and everybody is interconnected with it so it’s a big part of our success.

Paul Wurth:

Oh, we appreciate that. And, again, we appreciate you being with us for a handful of years. We want to continue to be your nonequity business partner, that’s how we think of ourselves here.

I know you’ve been in Omaha a couple times for Buildertrend University. When we open it back up, we’ll definitely send you the dates and maybe we can bring you and your team back again.

Sherwin Loudermilk:

We’d love it.

Paul Wurth:

All right, man.

Sherwin Loudermilk:

All right, thank you so much.

Paul Wurth:

Thank you so much. Best of luck this year. See you.

Sherwin Loudermilk:

Bye-bye.

Paul Wurth:

Jason from Bold Construction in North Carolina on with us. Welcome, Jason.

Jason Dell:

Thank you. I appreciate being invited to speak today.

Paul Wurth:

That’s great.

Jason Dell:

I’m excited to actually get on the show. I’m a listener, so happy to be here.

Paul Wurth:

That’s awesome to hear. We’re very happy to have you. You know, we reached out to Jason and his team and just kind of wanted to get their take on what it was like to experience COVID-19. The original sort of shock of that happened in March of last year and then subsequently what you’ve seen in your particular area and some challenges you’ve had. Jason is gracious enough to spend some time with us here.

As we do with everybody who’s on the podcast, Jason, let’s just start with a profile of your business. As you sit today, tell us a little bit about Bold.

Jason Dell:

Sure. Bold Construction is a custom home company in Chapel Hill, North Carolina. We cover what we call the west side of the triangle. If you’re familiar with Raleigh, Durham Chapel Hill, we are mostly in Chapel Hill, Hillsborough to the north, down to Pittsburgh on the south and dip into Southwest Durham occasionally to do work.

We build approximately 10 custom homes per year. Our current average home price is between basically 1,200,000 and 1,500,000 is where we’re averaging. We build homes mostly in custom home, subdivisions, parcels that people have found pieces of land, large acreages. Anywhere you can stick a custom home, we will build there.

Paul Wurth:

Great.

Jason Dell:

I have a staff of close to 16 people. I don’t know the exact number, I probably should. Full-time employees doing anything from accounting and finance all the way through construction management, project management and beyond. We have been using Buildertrend for, I have to check my records, but probably close to seven years. We love the product. We can probably accurately say we are 100% in on Buildertrend.

Paul Wurth:

Well, that’s great to hear, and thanks for saying kind words about the product. You know, I checked out your website. There’s two things that really struck me, and I want your take on this because when you say 10 custom homes obviously, you’re at a nice price point so those are large projects, but it did seem you had a lot of people for 10 homes a year. Like, it was a lower volume for a good amount of team members. Can you talk me through that? Is that a conscious decision? Is that how you’re set up and you need that to really deliver the customer service experience you want? Tell us about that.

Jason Dell:

Exactly. We have something around here we call the exceptional building experience, and that’s what we deliver. I mean, we deliver amazing custom homes, high end in the market, but we like to deliver that exceptional building experience. In order to do that, we do need that many employees to make it work properly.

One of the things I did not mention is that we do some renovation work as well. We probably have probably 15 – 20% of our revenues in renovation work and then we do some light commercial upfits and a little bit of new construction builds for commercial. We have a little bit more on the plate than those 10 custom homes but our focus, again, is custom homes and providing that exceptional building experience.

Paul Wurth:

That’s great. That makes sense. So, you’re dabble in renovation and then even light commercial. You need some more expertise there, and to deliver that exceptional building experience, yeah it takes some people and some infrastructure. That makes a lot of sense. That’s awesome.

The other thing I noticed on your website, and this will probably be a good lean into the COVID-19 is you have all mask on your profile of your company.

Jason Dell:

Yes.

Paul Wurth:

Was that obviously a conscious decision? What was behind that?

Jason Dell:

It was a conscious decision. If I could go through the history of COVID-19 again, I could probably tell you date by date if I check some records but essentially, on March 15 is kind of when everything hit the fan, and we shut the office down. We shut down the office, kept people at home, did all our meetings on Zoom. We did pull people out of renovations and warranty work. Basically, any occupied home, we did not let our employees go back into.

North Carolina construction was deemed an essential business, which was fortunate for us, and we were able to continue all of our new construction projects. I believe we went back into the office around May 15. A lot of this is according to the state’s guidelines, a lot of it was really according to my business partner, Chris and I’s, decision on what we thought was actually safe.

So, we went back into the office on the 15th. It was kind of a mix. If you can come to the office or you feel comfortable coming to the office, please come back. If not, let’s work out some special arrangements with you and your staff. We went straight to masks, taking people’s temperatures and all the things in order to keep our office safe. Fortunately, we have a very nice office with a bunch of individual offices, so we didn’t have a cubicle situation where we have a lot of people in the same room so we’re able to maintain distances and not put people right on top of each other for those reasons.

And then on the job sites, we got out sanitizing signage. Mask mandate came a little bit later on the job sites. But in general, job sites are pretty safe until you start working interior. At that point, we weren’t stacking subs on top of each other. We kind of let one subsequently work at a time. That was kind of our plan.

Paul Wurth:

Yeah. So, you were really looking out … I mean, that’s a difficult thing. I know the owners of our business battled with that, but you had to look out for the business, you had to look out for the welfare of your employees trying to cater everybody in their comfort level and then, of course, pulling them out of the renovations and the warranty work. Was that a decision by the local government or was that a decision by you and your business partner?

Jason Dell:

That was a decision made by us. My business partner and I decided that we didn’t have anything that urgent in that category, so it was probably best until we figured out how the virus was working. We thought it was best just to keep people out of occupied homes.

Paul Wurth:

Yeah. You and you and your business partner, Chris, was it a crazy time to say the least? Was it sort of all hands on deck between the two of you?

Jason Dell:

Yeah. I mean, it was obviously unprecedented times for everybody, but Chris and I are pretty quick on our feet. I had some of the technology already available and have used it a lot in the past just with traveling and stuff like that, so we were able to put it together pretty quick. My staff is very nimble, very capable. The guys that were in the field ready to work, wanting to work, tell us what we can and can’t do. People that are more office based, on Zoom calls at 8:00 a.m. No problem. Everything worked pretty well.

Chris and I, I think we all did this, first in March we’re all watching the numbers every day, worldwide numbers, state numbers, county numbers, trying to figure out what that meant for us. I thought we made some pretty good decisions. I thought we kept our team safe, while still being able to provide that experience for our client. Certainly, clients were very reasonable. The ones that we had warranty and renovation work were perfectly fine with us not being in their homes. The ones where we told them we’re not certain where this is going to lead, schedule wise for your jobs, were fine. They said, whatever you have to do, you have to do, and we’ll accept it.

We did not lose much time on the front end of the COVID-19 scare here. We’re losing more, quite honestly, on the back end with supply chain issues and material shortages and stuff like that.

Paul Wurth:

Okay, that’s interesting. Let’s talk about that. There were a lot of companies that we spoke to on this podcast back in the second quarter of last year that really did see a full stop in terms of leads and that part of their business. That came back for almost everybody in a couple of months, which was great for this industry, but we always did talk about this supply chain and that’s got that tailwind of like, what, six to eight months until we start, or now we’re seeing the effect of that. Is that what you’re saying?

Jason Dell:

Yeah, more or less. I mean, we’re the same way. Once March 15 ends, we’re dead in the water on sales and didn’t pick back up until probably August, early September. And then the floodgates opened, and we can kind of get into what that means later on our discussions. But as far as the supply chain issues, the way I heard it from my suppliers was that a bunch of mills shut down immediately and then once everyone realized the demand is there and it’s growing, they picked them back up. So, we had lost some timing on the frontend of that just based on that’s more lumber commodity stuff. And then we’re seeing a lot of lead times that were three to four days are now four to six weeks.

Paul Wurth:

Oh, wow.

Jason Dell:

Things that are unheard of in our business and we had to completely adjust our template schedule and Buildertrend in order to do account for all these change and our schedules in general, obviously, had to be adjusted to account for those.

Right now, it’s really miscellaneous stuff that we need a certain color of a specific piece of decking board and it’s not available, whereas early last year, 2019, it would have been there. It would have been three days out and now it’s six weeks out, and we have to reassess what we’re doing with the schedule.

Paul Wurth:

What do your suppliers and your vendors say to you now as we look into next year? Is there going to be some timeframe when we’re back to normalcy as relates to supplying and ordering things like that?

Jason Dell:

Well, I hate to use this term but the new normal might be things just take longer to get than they had in the past. I think our vendors are trying to keep us up to date on how long things are taking to get so we can properly prepare and schedule accordingly. Certainly, everyone were hopeful species.  Everyone believes that we’re going to be back to normal at some point, and hopefully that means the construction and supply chain world will be as well.

Paul Wurth:

Yeah. Well, we’ll see how it goes over the next couple of months here or the whole year. Now, you had mentioned that floodgates sort of opened up. I think you and I had a separate conversation before this, and you had talked about how there was a couple of things that changed for the better, I guess. I don’t want to put words in your mouth as relates to this COVID-19. Is that what you’re talking about there? New opportunities?

Jason Dell:

Yeah. Obviously, I’m a micro organization in the whole building world, but I will speak from our experience. We’re, again, 10 custom homes a year is what we’re shooting for, providing that exceptional experience but the mindset of our clientele, or people who are purchasing homes that we build has certainly changed.

We’ve seen people moving away from urban areas, not only regionally, people coming down from the northeast but even super locally, whereas people were moving out of the town of Chapel Hill out to the next county over. They are wanting more land. They are wanting, I wouldn’t say bigger homes, but right-size homes. They want every room to make sense and to use every room, so they’re willing to put more money into probably less square footage as long as it’s the right size square footage.

I think the biggest change that we’ve seen is people focusing on that indoor-outdoor living. That’s your living room and kitchen flowing onto your screen porch, which flows out onto your pool deck with a fire pit. We’re seeing summer kitchens, outdoor kitchens, swimming pools in almost every home that we’re building, hot tubs, fire pits. People wanting almost as much square footage outside as they have inside on the main level.

Paul Wurth:

Wow, that’s really interesting. So, for you as a business, what does that mean for you? Does that just mean more complexity in the project, a higher price point, both?

Jason Dell:

I would say a little bit more focused on design and needs than we’d seen in the past. Certainly, higher complexity. I would say that’s a fair statement. And then higher price point. Probably higher price per square foot plus higher total price point based on having that exterior space, and you know swimming pools are not inexpensive these days.

Paul Wurth:

Mm-hmm. Especially, yeah. They’re some of the busiest trades in contractors that are out there right now. There are some pools that are 12 to 18 months out. Good for them.

On a national level they’ve had this discussion about people leaving the big metros, understand they don’t have to be in the city centers to live and work. You’re seeing that in real life?

Jason Dell:

Yeah. I mean, we’re seeing that locally. We’re seeing people that have left some of the bigger metro areas and coming down this way. That wasn’t uncommon in the past, but it kind of, I think it gave a lot of people that extra push to just go ahead and do it. Certainly, people being able to work from home has changed that as well. Because of that, quite honestly, we’re seeing another design change, which is that usually it was maybe we’ll put a study in, now it’s we’re definitely putting an office and then, hey, find us another spot for a second office, so we don’t have to work in the same office. That kind of thing. Or find us a nook somewhere where I can work four or five days a week instead of going to the office.

Paul Wurth:

That’s interesting, yeah. So, in general, when you talk about right sizing for people, that’s a great example, are they getting rid of superfluous places like dining rooms they would never use, formal dining rooms or a family room and a living room? Is that kind of what you’re seeing?

Jason Dell:

Yeah. I mean, I would say in general we’ve seen … and the trend was happening before this, but we’ve definitely seen the formal dining room go away, we’ve seen the formal living room go away. We’re even seeing the bathtub in the owner suite go away and just go with a larger shower. I think there’s a lot of changes that are happening. One of the other things we’re seeing, there’s a lot of guest suites on the main level. You have your owner suite on the main level, and your guest suite on the main level. That’s becoming more popular with thoughts of visitors or multigenerational situations, that kind of thing.

Paul Wurth:

Yeah. Have you guys seen this trend that I’ve seen too, and it happens typically, in better climates, a separate outdoor structure of the guest house or an office in a large backyard or anything like that for your renovation?

Jason Dell:

Yeah. I’d say we have a few with that thought in mind in design right now. We have not … I’m just trying to think if we built anything like that. We had a house came out of ground probably in 2019 that had a separate exercise room on a detached garage with a little summer kitchen off of that. We’re actually designing a multigenerational house right now that would have what we would all consider the main house and then it has a full two-bedroom guesthouse with a kitchenette and a dining area.

So, yes. The answer is yes. People are looking to do that. It’s not necessarily always a detached. Sometimes it’s attached or we have a breezeway connecting it.

Paul Wurth:

Wow. I’m definitely looking at 2021. It sounds like you guys had a bit of a rollercoaster, but in general things are good right now, you guys are busy. What do you sort of foresee for 2021? More of the same or?

Jason Dell:

So far, yes. I mean, we are working with more than a handful of clients right now on designs. We’re expecting those designs to turn to contracts pretty quickly and expecting to get those 10 houses done in 2021. Many parts of 2020, I didn’t think that was even going to be possible, so we’re very blessed and fortunate that we’re here where we are, but I have not seen a slowdown. I don’t predict it as of yet.

Again, I think there’s been a mindset change. I don’t think it’s a temporary mindset change. I think it’s more of a we should have been doing this all along kind of mindset.

Paul Wurth:

Yeah, more of a push.

Jason Dell:

And if that’s the truth, then I think our business will be pretty strong for a while.

Paul Wurth:

That’s great. Well, it sounds like you and Chris had yourself set up right for this unpredictable pandemic as it relates to the system you guys had in the business and you guys were using, a system like Buildertrend, so you made that transition well. Kudos to you and Chris for having your business in the right place. We’re fortunate to have you as a client for this many years and definitely hope to have some for many more years, and wish you the best, man. Thanks so much for coming on.

Jason Dell:

You’re welcome. Thanks for having me, I really appreciate it. Thank you for what you do for us. We certainly couldn’t do without Buildertrend. And, if I could add one more thing, having Buildertrend for out of town clients has always been a dream for them. They’ve been able to check in, see how the jobs are going, check pictures and all that kind of stuff. And in the COVID-19 climate, we’ve had multiple clients from out of town that have not been able to visit their house. I mean, literally 10 months in, they haven’t been able to come see their house, and Buildertrend has been a big help in making sure they know what’s going on and are comfortable with moving forward without actually getting their hands on the home.

Paul Wurth:

That’s amazing to hear. Well, thank you for those kind words, and again, we wish you guys the best. One of best companies in North Carolina. They’ve been with us a long time. Jason, thanks so much and here’s to a great 2021.

Jason Dell:

Thank you very much. Appreciate it.

Paul Wurth:

Thank you again for tuning into this episode of “The Building Code.” Make sure you subscribe and like wherever you listen to podcast. Also, head out to Facebook and join The Building Code Crew. And finally, drop me a line at podcast@buildertrend.com. We want to hear from you, suggestions on guests or topics, anything. Thanks so much for joining, and appreciate you.