S3 EP8 | Builder Deep Dive

Show Notes:

Focus Discussion of the Week:

Matt and Mollie are back together for a special episode to chat about what’s working well for New Home Inc. Listen and learn helpful video content tips, processes and efficiencies, communication tactics, and more! This one is PACKED with easy-to-implement ideas you won’t want to miss.

Mollie: I am so excited to have, I, I can’t even refer to you as a guest because you’re, you know, created this podcast together, but I am so glad to be reunited for another episode of building perspective. And I have Matt Riley here to talk about all things, housing. 

Matt: Hi, it feels fantastic to be, I got to say, is, is it a guest? Is it a guest appearance as it just you’ve you come back for a reunion episode? Is it like the friends episode where everybody comes back together? Like, how does that work? 

Mollie: I love it. I think it was more of us just having one of our regular talks and saying, this is stupid, we should push record. 

Matt: Yeah, we should record this. And who knows? Maybe it’s helpful for someone. Maybe it’s not, but we’ll find out. 

Mollie: Yep. So we’re going to do an overall check-in. I know our listeners are dying to hear what you’re up to. What’s going on. So tell us, like, what is going on? How is everything update us on where you are and your company and just big picture?

Matt: Yeah. So things are moving along. So we in 2021, but we pulled our first building permit in July and we closed a whopping five houses in 2021. And this year we’re on pace roughly for 60 to 65 closings.

Mollie: Okay. You’re going to talk about that for a second? Because that is like unfathomable for most people to think about, like you just started this new company, you went from five, and you’re projecting 65.

So like, you know, that has to be a reflection of the people, right? 

Matt: Yeah. I mean, certainly it’s a reflection of our people, my partners, the team that we have in place, obviously something that had been being worked on for a while. And it’s something that we, you know, we had some land position right out of the gate.

So that certainly helps. And we were able to pick off some land where we didn’t have to go all the way through the entitlement process. So it really allowed us to just kind of jump off into the deep end. 

Mollie: Yeah. And you obviously have the best marketing partners out there. 

Matt: Absolutely without a doubt. And we helped create a brand.

We created a brand that is distinguishable from everyone else. And so we just dove back in and we really will hit 60 to 65 closings this year. I mean, it’s really about builder lingo. It’s about keeping the starts out in front of us. Right. And really monitoring. And one of my partners was I’ve worked with for years and he’s, he heads up construction and he’s so good about just monitoring lead times.

And so we know, all right, well, if windows are taken, X or doors are taken, Y doesn’t, you know, like we know how far in advance we need to start home so we can close them on time. It’s just management, it’s just construction and backlog management. So that’s what we’re doing. And that’s where we’re going.

It’s fun along the way. I always tell people it’s easy to sell homes. That’s not as easy to put them all together. It’s fun. It is. It’s a lot. But it’s really, it is really fun to be back in kind of the swing of things with in the market and talking to buyers, demoing houses. Talking to realtors, really having a super hand up on the pulse of the, of the local market and just kind of seeing what people are feeling right.

And what they’re looking for and as rates scare them off, or, you know, what a realtor is saying, like all of those kinds of things, that’s really fun to be getting that stuff firsthand. 

Mollie: Yeah. One of my favorite things is you are the master of video content. I love that because you just get out there and you talk and you talk how you would talk to me how you would talk to a buyer.

And I think that it’s something that really scares people. And it’s a big part of your approaching your strategies. So will you talk a little bit about that . 

Matt: Yeah. You know, it’s something, obviously I’m comfortable on camera. It doesn’t bother me, but I also don’t concern myself with making it overly scripted and overly polished.

You know, I went out and bought a little hand. We just kind of go, yeah. And it’s okay. Like it’s okay to stumble because I think, you know, the goal for me when I’m doing some of the video content is really just to talk directly to like somebody was standing there.

Right. And it’s okay to be a normal conversation. So what’s interesting though, what I’ve found is are banks actually really like it? So they really pay attention to the marketing side of things. Every single banker that we do, construction loans with our line of credit, even land develop. They even talked to, like, they watched those videos and they make comments on them.

Mollie: And that’s without you putting them in front of them.

Matt: Totally, unprompted.

They’re going out and looking at the website, they’re looking at what you’re doing, they want to know. Right. Because if you don’t sell it and close it Efficiently and then they got money in the game too. Cause it was just looking at my, my loan sheets and with one bank there’s nine and a half million dollars worth of construction loans that are out there.

And they want to feel secure about what’s happening, but it’s, it’s just me getting out to some of these. It’s just me grabbing the camera, walking down the streets. “Hey, here’s what’s coming. These houses are in framing behind me. And let me walk you through this house.” It became out of necessity because I didn’t have anything else to talk about because I didn’t have any finished product.

So I literally was like, well, I gotta talk about something. So we just started, I just started doing framing walk-throughs trying to give like selfie, framing videos, like this wasn’t a super complicated stuff. I was able to obviously make it look a little bit more professional in doing some of the editing it’s myself in final cut and things like that. So it made it a little bit more polished, but as far as everything else, it was low tech, and just hit record and hold the video camera phone out in front of you and go. 

But one, if this is anecdotal because it’s not like we’re talking thousands upon thousands of people, but what I can say is that 100% of everyone who bought a home from us, watch those videos. They made a comment that they specifically, I mentioned this at IBS at my session with Chad, I can tell you 100% of the people who bought a house, watch those videos. And I can tell you a least 75% of the people that I’ve engaged with, even if they didn’t buy it, wasn’t because they didn’t buy because they didn’t like the houses.

It was probably because they didn’t buy it because they couldn’t, it was limited inventory, but they watched him too. But I have specifically had people ask, do you have any more videos? And as I have product finishing, I am doing a more professional, like video demonstration of each home, not to sell that home, but to sell that floor plan. And I really talked through all the options that you can do around that house. And then I’ll point out like, this is the way this home is built, but when you have this and this and this option as well, and everything that I’m doing right now, like when I’m doing this, as these homes are finishing, it’s not for today, it’s not to sell that home or the next home, because those things, those homes are already sold.

It’s to sell stuff in a year from now. To have it. It’s a lot easier to go for, you know, to already have it. And that’s what I’m really making a focus on. It’s I’m spending a lot of the dollars on the content creation and less dollars on literal advertising. 

Mollie: What I love about this approach is that you said before, you’re doing a lot of, low tech videos where you’re just kind of going and walking through, but you’re also doing this more professional style video content.

There’s a value in both in talking about the low tech ones, because I think everyone understands some of these more like professional videos. And, and I think we tend to think that every video needs to be that when it really does. Yeah. One thing that I noticed about them, the more low tech videos.

They’re high energy. And a lot of that is you. And I will say, not everyone in our industry has the natural passion that you do. And it can be tough too. You have to like rally or like the sun has to be out. You have to be in that positive mood. You can do that off the cuff. Not everyone can do that.

What’s your advice there? Like how do you get people to rally to do that video? Cause for you it’s more organic. 

Matt: It is, but I mean, to me, it’s also really motivating to see that you’ve got all right, well, that’s a $700,000 house that I have a $500,000 loan on that I need to get sold so I can get paid. That’s self motivating.

Mollie: That’s like, all right, get out there and turn the camera on. 

Matt: Yeah, that’ll make you motivated to go sell something. But even the energy level that we have right now, I guess the best thing. Myers Barnes gave me this advice a long time ago. And it was, when you’re in front of the camera or you’re on stage, like you have to almost take it up two to three notches because of what you’re comfortable feeling. If you feel like a little bit of a goober, that energy is probably just where it needs to be on camera, or from onstage perspective. It’s not that natural. Like I feel comfortable in this moment. 

I have to look around and what’s interesting is I don’t even like people around me watching while I’m shooting these. I’ve had people like, oh, I wanna watch you. I’m like, no, you can’t. Yeah, you can watch the video, but you can’t watch me do the thing because I, because I feel like a complete goober because I’m really trying to like amp up that energy level. And

Mollie: I love that. I want everyone to try to use the word Goober in an organic conversation for the rest of the day and just like use the word goober randomly, because I I’m really excited to try that myself. 

One of the things I do, because I don’t have as much natural energy as you do, but I obviously am very passionate. I’ll get out there. I’ll do some jumping jacks. I’ll smack my cheek. I need to do that to give a talk or do video content.

I liked that analogy from Meyers just about like taking it up two notches because it does come across on the camera as well as like just smiling and showing that you’re really into what you’re talking about.

Matt: Yeah. If you’re excited about it, then people have a natural tendency to also get excited. And I think that even carries through to house demonstration. One thing that in the previous builder life, I started off selling houses, but then obviously you transitioned into leadership and executive and you get out of the day-to-day selling and now putting it right back in the day to day selling, because right now I’m handling things in batches.

Somebody was asking me like, how are you able to manage? Because I’m handling the boots on the ground marketing. Obviously we have Group Two. That does the marketing, but then, you know, I’m the OFC, I’m the salesperson on site, but I manage it by releasing homes and blocks. So I’m not just out running around like a chicken with my head, cut off showing houses all the time, but it has really brought me back in tune with how important house demonstration is.

And I think that that also carries through to the video itself, because you really have to demo the houses the right way. And I even have people say, like, I can tell how even customers, like I can tell how excited you are or how passionate you are about the homes that you’re building and how you’re building.

And I’m like, I am, and you should be too, because you’re going to live here. 

Mollie: Yeah. And that’s the piece. Not everyone has that passion. So like really getting that right person who is excited about your product, being the voice, I think is so important because you are excited and that makes your audience excited.

Matt: Yes, absolutely. A hundred percent. And you’ve got to figure out truly identifying your niche is the builder, because that’s how you’re going to get your team excited. If you’re the low cost provider and that’s not a bad thing, that’s just a different business model. That’s not my business model, but that is a business model.

And so if you are all about bringing price per square foot and true value, Then you’ve got to make sure that the team, the sales team and even the marketing team truly understand that. So then they can be excited. But what are all the exciting things about being that low cost provider? Right? Because you’re bringing real value to people to get into a home that couldn’t before and the, or you step up and you’re like, all right, I’m kind of in the middle of the road here, as far as like price and value.

What are the things that separate me from everybody, but identifying what those value propositions are, and then being truly excited about it was how the rest of the team is going to get excited. 

Mollie: Yeah. I love that. I think there’s too many builders try to own the same message and then they just kind of all blend together and that’s the last thing you want to do with sales and marketing.

Matt: Right? Because everybody says, we build a quality house. Nobody says, Hey, buy home from me. I build garbage. Right? Like everyone’s value proposition can’t be quality. ’cause it’s expected you’re building quality. If you’re not building, if you’re not building something, that’s going to stand the test of time, you’re not going to be around that long. 

Mollie: Yeah. It’s so true. So what has changed? I mean, you said you’re, you’re now the OSC. You’re now doing the sales. You talked a little bit about blocking and I would imagine you’re talking about your schedule. Like, what are some of these things? Or tactics that have helped you, that our listeners could benefit from.

Matt: So now this is my process as a small , 60 unit a year builder and we’re spec only. So there’s no presale. We have staff, we have office staff, we have construction people in the field, but. We’re doing everything spec only, and I’m getting houses to basically dry wall. And then once they’re drywall, then I’ll list them and put them on the market.

But I do that in sections. So I’m like, all right, I’ve got a release of four homes in this neighborhood that I’m going to do. And then a week from now on the new to two homes over here. And then it’s all based on the construction schedule, the starts and sales are playing off each other, right.

Once we get into certain stages, cause. I can’t have three neighborhoods active at one time. Cause I’ll, I’ll never get anything else done to saw the company to run, you know, so I just can’t be the sales person out there running around. And so that’s what I mean by blocks. Then it comes into, what’s the process of actually marketing, putting homes in the market and actively selling.

And so for me, this is for me, this. This is not this broad brush stroke, but for me, what I’m doing is once I create an inventory home, it goes on the website as a coming soon, it’s essentially doing a coming soon campaign for a new neighborhood, except I’m doing it for blocks of homes. And then I’ll build a list, build a list, build a list.

I’m not doing showings and not doing any of that stuff while I’m building the list. I don’t have pricing anywhere. And then about a week prior to when this home would go live, why do you want to sign up? How do you build a list? Why do you want to sign up on the list? It’s because you’re going to get inside information before the general public does about release dates and pricing and what the homes are and specifications of them.

So about a week prior to the home going in the market, then I’ll send out an email to our list of people who were interested in those homes and or that neighborhood. And then I open up for that week, previous showings. So all I’m trying to do is build urgency, showing houses, people wanting to bring their checks.

Like, no, you can’t buy this house yet. It’s not for sale for a week. Hold on. You can’t, you can’t pay me yet. And then on one of that next release day comes. That block of four homes is sold in like 20 minutes. Not because you blindly throw it up online and people just decided to buy sight unseen, but the work went in, it took a week to sell those four homes, but it’s building up to that release day and it creates that sense of urgency.

If there wasn’t already a sense of urgency in the market, because inventory is so low, but we’re also not doing bidding wars. So it’s first come first serve. Right? So then we have to. I essentially know who’s going to buy what based on interest levels and conversations that we’re having. So that’s the process, what allows me to control my schedule a little bit more.

So that way I’m not running around. Like I said, showing houses all the time because I never would. And then that leads into, from a content perspective, how do I duplicate, replicate myself over and over and over again, without having to go show houses all the time, insert video content as these homes that we build for the very first time.

That’s when we do the professional full it’s not here’s the kitchen. It’s an actual demonstration of the home and the different options and why they’re that way. Healthy home features, smart home features talking that through. So you’ve got this long form video, and then also breaking that up into sections and then inserting those sections into say Matterport tours and photography and virtual staging and all of this stuff.

Because when someone says, well, I want to see this house. Well, I don’t have one for. Here’s this right? Here’s the video tour. Here’s the Matterport tour. Here’s the virtual staging or, you know, I, I’m not showing you this house because I’m not in the showing phase of this release yet, but if you want to see one here’s this content, it helps alleviate.

And a and B I don’t have to build any models. So I’m doing, I have no models. 

Mollie: I don’t know how you’re doing all this. I mean, you’re the builder, you’re the marketer. You’re the salesperson you’re doing lead management. You’re closing. It’s really a lot. And I I’m happy that you said this idea of, replicating yourself through video content, because that does become something that you can sustain over a long period of time, knowing that and creating these processes and systems while you’re in it to make sure.

What is in your mind is kind of sustainable longterm when you aren’t the one necessarily doing it. Sure. 

Matt: You get to see those things and identify them right out of the gate. And then there’s the stuff that you go, okay, I’m going to do this, but I can’t do it now. I’m going to do it a little bit later when I, you know, like I’ll have to hire some salespeople later this year, probably late this summer, 

Mollie: we’ll have resumes. Now. 

Matt: Bring them on. We’re looking for builders. We’re looking for salespeople later. We’re looking for builders now. That’s the process. Right. And so it’s a little crazy, but it’s also, it’s also a lot of fun and it’s also like, like I said, really like finger on the pulse of, of what’s happening. And you gotta be real careful in a market like this because you can’t get overly confident about how A- how good you are. B- how good your sales and marketing is. C- how good your product is. 

We’re talking about this with the interest rates. If you’ve got this giant pool of buyers, right. And then I’ve got this much, which is a much, much, maybe a 10th of that, which is your actual inventory levels. And so I’ve got, I’ve got the Delta, which is. 80% and 90% of that, even if interest rates is interest rates are ticking up there, know 4.75 or so.

I mean, even if on the extreme, let’s just say 50% of your buyer pool falls off gets priced out, or they say they get sidelined and they say, I’m going to take a breather. You still have less inventory than you have people. Yeah. It’s wild. It’s the craziness. 

Mollie: You really went from talking to builders around the country all day, every day.

I know you still do that, but now you’re really talking and engaging mostly with buyers and realtors. So, what are you hearing? Like what should our listeners be aware of just from what you’re hearing from buyers and realtors. 

Matt: Well, first off, I mean, the one thing I couldn’t express enough is communication. I get people that are just delighted that I returned their phone call and even realtors are like, oh, thank you. Thank you for picking up the phone or calling me back. It’s that basic level of talking to people like they’re human beings and not like, they’re not like you’re like, I don’t give a crap buy this house or not.

The big thing is communication and be like, all these builders think they can do anything, and you kind of can, but it’s going to do that brand damage. I’m trying to build a brand at the moment, and then I’m watching other people tear theirs down based on poor service or poor communication.

I’m a big advocate of, we can deal with any problem as long as we know about it, and as long as we communicate it. So one of the things that I tell customers when they buy a house is listen. We’re bringing you into the process at this stage of construction. We feel like the major bumps in the road have been all smoothed out prior to you coming in.

You can’t make any changes and you’re not going to have any walkthroughs until we get to the very end. I’ll keep you in the loop about what’s happening, what I can tell you is if we have a problem or we have something I’ll communicate to you openly, transparently and in real time, and if there’s a problem and I’ll let you know that there’s a problem and there’s a potential delay or there’s a potential, whatever.

Mollie: But the follow through on that. So it’s not an empty promise. It’s not scripted. It is a genuine we’re partners in this, and I’m going to communicate with you. And I think that when you say it, someone believes that because you prove it over and over again. 

Matt: Yeah. And, and one of the things that I do, right?

They’re like, Hey, congratulations. We just wrote a contract. I’ll create a text group with the buyer, the co buyer. If there’s a realtor with a realtor and I’ll name it for me, I’ll name it the lot number and community name. And then I’m like, Hey, this is our, this is our real-time communication tool. I’m going to be walking through your house on a weekly basis and I’ll snap pictures and texts, text the group, picture updates.

Mollie: How many group texts do you have going? 

Matt: I hate group texts. These are, but here’s the good news is this isn’t chatting. It’s Hey we want to schedule an inspection or, Hey, I just want to let you know that we had to change your flooring color and this is what it’s going to be. Or Hey, drywall went up today. House is looking great. that’s the communication. What’s great. Is everybody stays in the loop.

No one can say, I didn’t know. You get really quick response rates cause it’s texting, not email. And then at the end of the transaction, Export my text messages out to a PDF and I just save it in the job file. And I have all my communication with the buyer post-contract. 

Mollie: Okay, we could do an entire talk just about that because keeping the thread of the conversation, everyone has text message. That’s really interesting. I like that a lot and I don’t think most builders are doing. 

Matt: We talk about low-tech it’s low tech. It costs nothing. Right. 

Mollie: And it makes it easy for everyone involved in the process. So that’s really interesting. I love that. See, these are the kinds of things that you have to really get just the experience and like you’re not overthinking it.

You’re okay. We’re using text message here. We got we’re all on here. Like I just love. 

Matt: And the buyers love it. They’re like, oh, that’s great. The realtors love it because they stay in the loop along the way, you know, and all it does a lot of times, all it is is a thanks for the update response from the realtor.

Are they like thumbs up the picture or heart, the blah, blah, you know, whatever it is, but everyone stays in the loop along the way, but it really is just about. People know, specially in this day and age, in this scenario, people understand their supply chain constraints. Right? They understand that whatever it is, as long as you communicate to them, Everything’s fine.

It’s just all about communication. You can drop the ball on a lot of areas, but if you, at least, if you’re communicating openly and honestly, then it’ll, it’ll work out in the end. I truly believe it. 

Mollie: I love it. You know, we talk all the time and every time I talk to you, I learned something. So I do believe that besides Amy, I am your biggest fan.

You’re just an exceptional person. I love working with you. And you’re a great friend. So I do want to wrap it up. I know our listeners are happy to hear from you and hear what’s going on with you. We’ll have to do this more regularly. What is something you’re looking forward to you like in the next three months or six months, whether it’s related to housing related to something personal, you’re looking forward to what’s coming up for Matt?

Matt: What am I looking forward to asleep? I’m looking forward to some sleep 

Mollie: you want to leave you, you wouldn’t be able to sleep and you would like go out and be doing something.

Matt: No, I it’s fun. Building the team. It’s fun. Bringing people in. I look forward to continuing to expand the team and I look forward to not being the salesperson, but actually, I mean that in a, not in a selfish, I don’t want to sell any more, but I mean that in a, I feel like got some more recent insights I look forward to working with and helping develop people along the way. So that’s, that’s exciting 

to me . 

Mollie: Yeah. We have a lot of people in sales who are listening right now. And I think that they know that that’s coming from a place of respect. Like we respect you and what you’re doing.

Matt: Yeah. Awesome. Well, that’s a home building in 30 minutes, right? 

Mollie: There we go. 

Always great to chat with you and we’ll do it again soon. And thank you for being on the podcast, which you created building perspective, and we’ll keep doing our thing and. 

Matt: All right. Thanks guys. .

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