How to scale from 15 homes to 150 homes with Thomas Joseph, Joseph Design Build

Thomas Joseph, co-founder of Joseph Design Build, joins Reece to talk about moving from high-end custom infill homes to building at scale—with intention. He walks through how getting out of the “just wing it” mindset and leaning into systems, numbers, and rhythms changed how he runs his business—and why clarity is the difference between having a job and building an actual company.

https://jdbatx.com

Show Notes: 

Introduction and Background of Thomas Joseph (0:00)
Challenges and Market Conditions (6:55)
Strategic Shifts and Organizational Changes (12:09)
Final Thoughts and Closing Remarks (46:39)

Find Our Hosts:
Reece Barnes
Matt Calvano

Podcast Produced By:
Motif Media

Transcript

0:00

Welcome to another episode of builders, budgets and beers. Today we have Thomas Joseph of Joseph design build from Austin, Texas on the show. This is going to be an episode for the guys that really have some big dreams. Big dreams meaning like competing with DR Horton and Lennar. Thomas goes through their 10 years of building in Austin, the product they were building, they're all doing infill, speculative building. They typically were doing a three to call it 8 million product. And now they're going for volume. They're going down to the 750,000 to a million, million and a half price point, and they're wanting to go to 150 to 200 units. So in this episode, that's where we talk about knowing your numbers, getting to a position to making that decision, and how to do it the smart way. Learn from Thomas. Let's go ahead and jump in. I was on the HOA. What were you talking about? When your beard was shorter, you looked like you were an active member of the HOA, like the guy that complains about the trash cans. It's like, should we really allow trick or treating this year? That's what you look like. But the big beard, you look like the wild man that I know and love. So this is my That's right, that's right. Um, yeah, you know, I'm definitely, I'm definitely going back for length. You know, when I live down in Texas, I really get nervous about people cutting my hair, and I, like my guy in Denver, so I just, like, completely went rogue when I was in Dallas and came back. But I didn't plan accordingly, so I ended up getting a different guy at the barber shop cutting my hair anyways. So I'm kind of on, like the third, fourth month of getting back to zero, getting a little bit of a canvas for him to work with, right? I mean, the turnover at Supercuts is crazy, man, I see why you're struggling over I'm a Sports Clips guy. I'm a Sports Clips guy. I'm going for endorsement stunt. I mean, super cuts, that was, was it super cuts or super clips? I don't know. I feel like there's, that's a Walgreens CVS thing, right? I think it was, you get a haircut for like, six bucks, right? Crazy. It's just like a genius person, fresh out of school, ready to mangle your head. That's right, that's right, that's right. They're just trying to get some some cuts under their belt. But how are you dude? I'm doing good man. I'm a little tired, but I was like, I'm not gonna cancel on Reese, no matter what. So I'm here and I'm excited to talk to you. I appreciate and you just look all dolled up as normal, just just absolutely polished. What? What do you what kind of shirt is that? It looks like a doily turned into a shirt? Yeah, that's a game set. Games like you look like you're wearing a tablecloth. It's Ted Baker. It's kind of like a old Teddy Baker, huh? Yeah, it's like, almost like a modern Sears sucker. This is hot weather fancy T shirts. This is, this is Austin summer garb, right here. Yeah, yeah. Like You I look like, it looks like I could light a match off of your over. I didn't have to see the label. No, that was Carhartt, yeah? No, I just, I threw it on. You know, it's a little overcasty, kind of chilly here in Omaha or in Denver. I was in Omaha this week, yeah, because you're so blue collar, it makes sense that you wear tons of work, dude. If you knew me in my personal life, you'd know that I just cannot stay away from hammers, you know, right? Just Give me. Give me on a house on a framing krill. That's my life. You spent a weekend in the garage. You know, you're just tinkering around the house. I'm a tinkerer. I just like to find things to do. Hey, hey, honey, I got this bass on the wall that talks to me when I walk by. You're that guy, right? I'm like, sharpening my chisels on the weekend. Like, I never use them, but you gotta make sure they're sharp. Yeah, wall where it's, like, there's the outline of the thing that's supposed to go there. I have a I get a neck and my level, and I just go bananas, right? You snap it over your knee. I'm going for this is worthless. Now this is worthless. It's completely out of touch. How am I supposed to know if anything's plum? Yeah, right, yeah. Okay. Well, I mean, we're recording, so this is, like, good role. We could start here honestly. But so I always like just to start it off for the listeners to know who is on the show. You give them a little background, little background yourself, and then we'll just dive into the backstory of JDB. What's going new in your world? Just some some nice chatter. Sure. So I'm Thomas Joseph, one of the co founders of Joseph design build. We are an infill luxury builder in Austin, Texas. We're vertically integrated. So we do the whole stacks. We do everything from the real estate piece, the acquisitions, architecture, interior design, structural civil engineering, construction, and then the marketing, sales on the way out. We historically. Been focused on architectural homes in the downtown Austin area that would be luxury, kind of three to $6 million price point neighborhoods within 10 minutes of downtown. And this is infill, so it's knocking down an old house to build a house, so no subdivisions. It's all scattered lot. That's historically what we've done. And then this year, we went out and we raised money and we created a new partnership that led to a merger. And so now we are pushing down in price and up in volume and scaling at a pretty rapid pace. So now the city changed the rules, where instead of doing one big house, we can do three on a lot. So now we're doing more of like a townhouse type product. So these will be like 750, to 1,000,005 trying to get our average down below a million. And we'll push to do we're on pace that we will have in the pipeline, probably 250 homes by the end of the year. We're up to 130 right now. So that's stuff that we'll do ourselves, and then we also do third party design and build for other developers. So we're doing 100 houses for developer in Austin and another 100 in Dallas, with the same kind of program where we'll, we'll do the full stack, the design, the build, and it may or may not do the marketing, sales at the end, dude, that's a really big deal, like I've known you for three years, you know, basically. And like you guys have always been doing, like, homes that you see, and you're like, if I could own one one day, that would be insane. And not to say that you guys are gonna be dropping on quality, but the fact you're gonna be doing 150 to 200 units now? Yeah, I'd be like, this is a huge pivot. It is, like, it's a, give them a little background on JDB. I mean, what 12 months ago? Like, if you give like, a 12 month look around, like, look back. Is that like, I just, it's like a flip switch, isn't it? Yeah. I mean, I'll just being transparent. I mean, end of 2022 they started raising interest rates, and depending on where you were in the market and the price points, but if you were in Austin and you were selling house above $3 million you had about a 30, 40% drop in values within six months. And then it's been an absolute bloodbath, where probably half the builders in that segment are out of business. Your bigger, more scaled operators are out of business, and all kinds of crazy Fallout investigations and stuff. So the mom and pops are gone, the big guys are gone. And that market really went off cliff. It was the biggest run up in the country, and then it was probably the biggest drop in the country. And now that's, that's luxury infill. So that's a subset the whole market. It wasn't that bad. The whole market is probably down 12 and a half percent from the peak, if you just went dead averages. But it's lower volume transaction. Things aren't moving. That's on the sales side, on the, you know, on the custom side, you know, the consumer confidence is low, so people really aren't building so, yeah, I mean, 12 months ago, we were staring down the gun barrel of, hey, we've got all these big, expensive specs. They're not selling that market's probably not turning around anytime soon. You know, we also, at that time, did customs and was like, hey, people don't feel comfortable spending three, four or $5 million on a custom because, you know, feel worried about interest rates. Are worried about the election now they're worried about trade war and real war, and that that consumer confidence at the high end is everything right, even if, logically, people can still afford the homes, and even if they still want to be in the city, and even if they have a job or a tax advantage or a real purpose to be in the city, when that confidence goes, people just pull out of the market completely. So sure that's where it was. And in an effort to pivot and try to get to a deeper buyer pool and more affordable price points, and in response to the city changing the rules, we went hard after that, developed a program with the kind of thought that, hey, can we take what we do really, really well on these big, more elaborate, more custom, kind of, more architecturally focused homes, and can we do something more approachable, where we take all that cool design, but we do something a little bit simpler for the missing middle, you know, kind of saying like, hey, What if you shouldn't have to spend $3 million to get an interesting home that's architectural, that's got a lot of features, that's got a lot of technology. You should be able to get that at a lower price point. And so that was kind of the thinking it's like, All right, let's take advantage of what the city's doing with density, but let's bring what we what we know and what we do well, and bring it down to lower price points. So make the designs cool. These are, you know, smart homes where we're giving them a full Smart Home package with speakers and automated lighting and, like, a Wi Fi hub and automated blinds. Like, like, this is a package that we would have put in a $5 million House, you know, we're putting it in a $750,000 townhouse, right? Hey, let's, let's really deliver a lot those price points and and the bet is that the folks that would have spent a million plus when interest rates were low now, if you can offer something that's really great, that's more affordable there, they'll come back to the market, you know? And they'll stop renting, and they'll say, yeah, let me pull the trigger on something that's really great, because there's not a lot of good offerings in that price point, right? Especially in these cities. It's like, you get real garbage if you're not willing to spend a lot of money. Totally, two things and help me, help me remember the first one in terms of like, the numbers, because, like, I think it's super interesting that you're taking or you made the comment of, like, you don't need to spend three, 4 million bucks to get the architectural design and like that high quality type feel like, why can't we just scale that back and go into like, 1,000,007 $50 million product? So that's the first one. But the second point that I wanted to talk about, I think I lost my train of thought. I'll think of it hit that first question, you could do the exterior completely out of Carhartt? Wouldn't that be an attractive home? I think so. And if we're thinking like dungaree finishes like that, would just be beautiful. AX handle for the front door hardware, you know, you just got lost in your in your, like, workman fantasy. There you just, you went, No, it was good. It was inside the Bass Pro Shops. Dude. Now you're not helping, dude, I'm further away. I'm further away talk to me about the price. Like, dude, so what do you have to know from your numbers? Like, the confidence standpoint, because you, again, you and Gabe were just like, call it 10x our volume drop our prices by a third. Like, where do you get the conviction on that? Because it sounds it's simple, right? It makes all the sense in the world on paper. But how do you have the confidence that you can do that? You know, my mom was really nice to me when I was a kid, you know, and I've rested like 17, so I just have all this confidence, no, so the so a couple of things. One was merging, so joining an organization that was already doing a few things really well at scale. One of the things that organization was doing is they were using a combination of local and offshore folks for their design team. So your ability to build a lot of operational capacity without a ton of money by utilizing some lower cost folks overseas was massive, and that's something we'd never done before, opening up your material sourcing to be willing to go factory direct, whether that's domestic, near shore or offshore, and deal with the complexity of buying things in bulk and going directly to factories and cutting out retailers to get pricing down. So they brought that that was extremely helpful to feel good about, hey, we can get our build costs down low enough to actually be competitive at these different price points, because you can't just spend $500 a foot. You know, if you're not selling for 1000 so there was that. The other side of it was one of the, one of our main partners just brought a level of financial sophistication that was very, I mean, it's it for me, it's very inspirational. Because I'm like, wow, this is, this is all the stuff that I would like to know and get to, and that really helped us start looking at things like, okay, how can you be process oriented? How can be systematic? How can you fight for every inch and always be hammering your process to be like, how do you be a little bit faster, go a little bit smoother, pull out extraneous cost, and really think about these things at with a with a mindset towards scale and and that, I think, was the big the big shift. So it's the combination of organizational change, and then some individuals with different mindsets really hammering this idea of process and organization right. Because you can build a bunch of houses and be incredibly inefficient. You can have terrible financials. You can do all this stuff really bad. But if you build cool houses, ultimately, no matter how you get there, they'll sell, and you'll make some money, and you'll think you did a good job. But you can't do that 1000 times unless you're really, really dialed in and and that, that volume, I think, fleshes out all the mistakes and the weaknesses. So yeah, so seeing a different way of doing it, and really focusing on getting organized and capacity building in ways that we hadn't before, and having some good people involved to help lead that charge, and kind of, you know, bring us along and help us evolve and change our mindset totally. Do you how long have you guys been building, you and Gabe, we've been building, well shit. I mean, so here in Austin, it would, we'd be like 11, going on 12 years, okay, but we grew up in construction. I mean, my dad was a builder, my grandpa was a building we've always been around job sites. I mean, Gabe was a framer. I was a laborer, so I used to pick up trash, yeah, rates, which is, yeah. Trash man, this was summertime in Albuquerque, so you just covered in dust and, like, even, like, the lowest level guy in the job sites, like, pick up that trash. Like, oh, man, you might as well. You're probably doing community service labeling is like a job by your Doug you're probably doing, yeah, at risk youth, you know, they're like, Hey, go to a job site. We've always been around construction our whole lives, and been on job sites, and then a little bit of finance and, yeah, just always been in that, that world, nothing, nothing like this, candidly, but totally Well, and that's kind of what I'm getting to is like, we'll dig. I want to hear some of the tactical stuff that helped with this merger. But even more, like, Okay, call it 10 years in Austin and like, let's just assume that you've been building the product that you've been selling for the last 10 years, right? Like, a big high end product. Could you have done this earlier? Like, do you think you could have, like, done the high end luxury thing, built a brand, built a name, gotten to the like, the quality market, and then pivoted into volume earlier. Or do you think that this was, like, all good experience that was worthwhile, and it was the perfect storm, and you saw an opportunity and took it like, Tell me about that? Yeah, that's a great question. No, I don't think we could have done it earlier. And I'll tell you, and me and you talked a lot about this, I think, when we first met, so we tried to take a run at scaling earlier before interest rates shot up. We I spent better part of a year really learning capital markets, getting familiar with private equity and sort of how institutional finance works, and then going out and engaging all these different private equity groups, working with, like a capital markets person, and getting the point of, like, getting term sheets and getting taking the credit committee with some big institutional private equity investors, all with the business model of, Hey, let's scale the three to $6 million stuff. And I'm so glad it didn't work out, because basically all of that happened right before interest rates raised. Interest rates are going up. All of the private equity across all asset classes, pulls back and does nothing for the last three years. I think had we done that, I think we would have gotten started and then just got caught in the bear trap. Even worse, we would have started buying land. Rates would have shot up, and then we would have just sat there. We would have had a bunch of half built projects or a bunch of dirt in, you know, in the permitting process, and the light switch would have got flipped off, and we would have, we would have ended up in a much, much worse, worse position because of timing that so timing wise, no, I don't think could have done it earlier. If you back that timeline up even more. Had we done it five years ago, we could have been doing 1000 houses by the time rates shot up and then really exploded, and we would have ended up like some of the bigger guys here in town. So that would have been worse. But the other thing is just temperament wise, I think that seeing all these lessons the last three years of the market being so brutal, and having spent enough time kind of studying what the more scale operations do and stuff to understand that, like, hey, there's a way to get there, but it's not the way I was thinking. And then had some really hard learning lessons along the way. I think we were much more prepared for the opportunity now than we've ever been, and I think we were poised to not make some mistakes that I think I would have made, like not emphasizing process, and not being as tight on everything and not taking the mindset at you know, every single second and Dollar and inch counts, and I think that's the only way that you can really scale effectively. And so I think, had I tried to do this any younger, if had we tried to do it any sooner, I think we probably would have done it in a fast and loose way, and we probably would have made a lot of money, and then at some point, just blew up. Already team. So today, we're actually piloting our first ad, if you want to call it that, it's really more just a promotion. We just got back from the contractor coalition summit in Omaha, Nebraska, and it was a fantastic event. I suggest it for anyone who's doing a million dollars a year in construction costs to $50 million a year in construction costs even bigger. I mean, the entire gamut of people that were there were pretty incredible. And really what this is, is just an opportunity to learn from the best, extremely collaborative. When I'd asked builders, why are they there and what the value of this event is, they said networking and learning from others. So what we have with the contractor coalition Summit is actually a promo code if you go to my Instagram, adaptive Reese with A, C, R, E, E, C, E, and you go to my bio, you'll actually see the adaptive code, and the code to get 20% off your ticket for the contractor coalition Summit is adaptive 25 again, you can use our code. To get 20% off the contractor coalition Summit, and that code is adaptive 25 you just have to put that in the promotion Link field when you're getting registered for the event. Now, when's the next event? The next event is going to be in Chicago, and it's on November 7 through the 10th of 2025 if you have any questions, or if this promo didn't land, jump into my DMs again. My Instagram is adaptive, Reese, R, E, E, C, E, and we can DM back and forth. You can give me a call. You can leave comments in the section, but we'd love to get you there, and we're incentivizing you as well. What we're because I know, like, the last 18 months were like, pretty tough. What were some of those just, like, beat up moments for you, like, just the brutal at the time, but awesome learning experience situations for you? Well, I mean, I think you talked about interest rates. So, yeah, so interest rates go up. Houses aren't selling. You can imagine the fallout with that. Now you've got, you've got investors that are upset because they're going to lose real money. You're watching future income erode, which starts to jeopardize your ability to carry overhead professionally and personally, right? And so the stress of that, because you've got, you've got a lot of people that trust you with their livelihoods, with their money, with their families. So carrying that weight is a big deal. And then I think just, I mean, seeing like, hey, there's no end in sight, right? Just being like, All right, well, you know, I thought when rates started going up, I thought maybe this is 1218, months, you know, but it just keeps going and going and going. And even now I look at it, I'm like, man, you know, I've thought for sure this would have been a recovery year, you know, and rates start coming down. We got past the election, and then people are still freaked out because of the trade war stuff, and now the Iran stuff and Israel stuff. What's coming around next month? Who knows. And so I think that having that weight of, okay, you're watching everything go down, you're you're flying the plane, and the ground is getting closer and closer and closer, and the plane is full of people, and you don't have the ability to, you don't have a way to pull up, right? You can't just, you don't have more power, sure, the stress of that, the pressure that, I think, was tough because it was just, it was so long lasting, right? It wasn't like, I had a bad week. It's like, it's just like, like, us, like, year three. It's like, it's like, when these, I don't know, I was a big fan of Band of Brothers, right? It's like, guys where it's like, they follow him. It's like, all right, they're in D Day. And anybody would have been D Day men. Like, ugh, glad I got my arm blown off and going home. That was crazy. And these guys, like, they made it all the way through Europe, and then they end up in the Pacific, and it's like, yeah, we're still, we're still here. We've been doing this for three years. This is brutal. You know what I mean? It's like, you don't even recognize them. They like smoke unfiltered cigarettes now. And it's like, you know what I mean, they're, it's crazy. So that's, that's chugging white monster energy drinks. Yeah, I feel like I've gone on campaign and, you know, I mean me and my brother now. He's like, when they release a pig in the wild, and it turns into, like, a wild boar, growth of tusks and like, all kinds of, like, yeah, every hair that's that's how I feel. Yeah, you kind of, you look better than that killing machine now, because it's been so brutal. But I kind of like it, I'll tell you, it's brought out the best of me. So, yeah. So I think that's where it gets hard, is just managing all of that. But I think what the positive in that is that I think it's really important, and there's probably a lot of builders going through the same stuff right now, is you got to look at it and say, like, all right, what have I done? Right? All right, you've built a bunch of houses. You've done a lot of really good work, and I think everybody's done good things, right? You got to understand that you're the same person that was capable of doing those good things that you've done, even though you're in a bad market or bad climate or a bad period of time, and that you don't actually ever really lose your capability, right? So you can lose money, you can lose staff, you can lose clients, you can lose your house, you can lose all these different things. But if you were capable of producing in our industry, great work, you're still capable of that. And so there's still a value in that and that you now just have to pivot and find where, where can you apply that skill set and that ability, where it has value again, so you never really quite lose that. So yeah, I would caution everybody to remember that, because when the markets shitty, you just tend to think it'll be like that forever, or like, Why do I even build these houses? Nobody wants them, you know, but Right? It's a it's a real capability. And so the market does turn around. Eventually, an opportunity presents itself, and you're still that's you still have that same skill set. So you just got to being willing to kind of tough it out until there's an opportunity to use it again. Totally. No one. I think that's so that actually reminded me of what I was going to say is like, like you're never, like your skills never going to diminish, right? Like your your ability isn't going to diminish. Like you go through these things, you go through these trials. Tribulations. And like, as long as you're methodical and rational about what's going on, like you're you'll still climb and climb and climb, right, not even considering the market conditions or the external factors that you just cannot control. It's like, that fluffy like, control what you can control. Lot of validity in that, right? But it gets overused. And like, this is just kind of a great example of that. So I don't forget, I was in Omaha this weekend, the contractor coalition Summit. Have you heard of it? No, so we can talk about it later. But basically what it is is it's like, Nick Schiffer, he's NS builders, Brad Levitt, aft and Phoenix, Mark Williams, Morgan, molotar, Tyler, Grace, like all these big builders have these big Instagram followings. They put on this summit of, like, knowledge transfer, awesome, okay? And they bring all these builders in to, like, just open book discussion, like, how do we do things? You know, from a marketing standpoint, from an ICP standpoint, to a sales funnel, to a build practice to a financial practice, everything, okay, well, adaptive, we sponsored it, awesome. We were one of the sponsors, and myself, Daniel Martinez and Matt gummersbach. Have you met Daniel or gum? I don't think so. Yeah, you'd love Daniel Gomez Bach. You would love gomsbach too. He's just again, one of the smartest guys I know. We can talk about gum later. Point being is we were there, and I do naming tons of dudes. I like that. You named like 40 people. This is a lot of build up. Yeah, there. You know it is every everybody. I'm a Name Dropper. You are, man, I don't know any of these names. Like, it's okay, we can make introductions about, don't feel bad. What are you feeling bad for? You just settle down. Are you getting nervous? I think you're getting nervous, people. I'm like, was these characters on The Last of Us? What is he saying? Okay, let me get to the point of, I did like, a 20 minute presentation on not adaptive, like the features, but the problem solution that we're solving, right? And one of the pieces that I really wanted to drive home, and we see this with bowlers all the time, is you got to know your numbers. Okay, I pose it this way, like before you start to scale, know what the cost of your widget is. More importantly, know what you're gonna profit on the widget right? Like, before you start, like just running out and chasing a bunch of volume, know that you're at least going to make money doing it right. And I wanted to bring that piece up because I want to know how much of your and Gabes and the rest of the team's decision making and again, going from how many units were you doing 10 a year, we would do like, 10 to 2510 to 25 and fills a year. And now you're gonna do 150 to 200 like, quite literally, 10x your volume. Yeah, how much of that was you knowing the cost and the profit on the widget, or the three to $5 million home, and then your ability to track that down into a product that you're like, we can certainly make money on this. Yeah, we're bullish enough to go raise and execute, yep, no, I think that's I think that's everything. So I'll tell you, like every single piece of the business is designed to maximize margin. So the fact that we do infill instead of suburban production, it's because our margins are three times what they are in the suburbs. The reason we do the vertical integration, and we perform so many of the pieces of parts ourselves, is to capture margin. We control the marketing and sales so we can get the feedback, so that we can optimize the houses to increase mark. I mean, everything we do is, is margin driven. So I think understanding how all these pieces impact that. And then also, like, saying, like, What business do you want to go after? Like, point you're making, it's like, hey, not all business is good, right? And we've done, we own a concrete company too, where, like, we did a school, and it was, like, a huge job for us. It was, you know, it was probably, you know, we would do slabs and stuff for other builders. So maybe an average slab was 50 to turn 50 grand, and this school was, like a three and a half million dollar concrete job. And we thought, like, bigger numbers can be awesome. It's gonna be just like the other thing. And we weren't clear on our numbers weren't clear on margin. And it was, it was a new type of work for us. We lost a ton of money on it, and we thought, you know, more is better, or bigger, numbers are better. And on the House side, it's like, yeah, like, you can specifically go after client, go after clientele, and sub markets where the margins are better, and I would encourage people to, it's like, yeah, you it's harder to build an infill. You're in town, you got people on top of you, and you're the middle of a neighborhood, but your margins are way better than if you build out in the country, and there's nobody there's nobody around, right? Or if you're wanting to deal with the complexity of building in a mountain town, you know, like in a resort town, your margins are insane because there's no competition. And where's your where's your consumer elastic and what they're willing to pay? So, yeah, I think that hardcore focus on margins. And that's not, not just to help you make money in your business, but if you're out marketing to clients, knowing your numbers to where, if you get a chance opportunity, and you get a five minute conversation with somebody, and you know your numbers can build a ton of confidence and really convert people. So yeah, I think it pays to be to be quantitative. You do not want to be somebody that just, well, I think we can do it and, well, it seemed like a good job. And get to the end be like, I don't know why we didn't make any money, damn it, you know, like, I know a lot of people are like that, regardless of the type of business. And I think that's you can. You can be a lot more focused and deliberate with your time, and you'll make a ton more money, and it's a lot more stress, it's a lot less stressful. And the thing I've learned too, is like, high margin stuff will protect you. If you've got big margins, things can drop and you can still be okay, right? If you got a 30, 40% margin, it's like, well, you can absorb a lot of a lot of bad things, but if you run on a 10, 12% margin, you better not make a mistake. So yeah, I think knowing those numbers, knowing your margin, being deliberate about finding niches in the market where you can do better, there's less competition, and you can stretch your margin, stretch your advantage, I think, is huge. Using the same skill set, doing the same amount of work to build the same kind of thing, just different target clients and different target areas can make all the difference. Make all the difference, totally, margin, totally. What would you say was, like, the most impactful and tactical takeaway that you had you and you brought about this up a little bit earlier in the conversation with the merger, right? You'd mentioned, like, there was some finance person that you were talking to that, like, offered a lot of insight and a lot of inspiration to you. What were some of the more tactical takeaways that you took from that experience on this? Know your numbers, know your margin, know your cost. Yeah, so, okay, am I asking the right question? Yeah, so this, so he's a, he's an active partner of ours, and not a finance person per se, but just a brilliant financial mind. And part of what the way he thinks that was helpful in shifting our thinking was this idea that, like, kind of realizing, hey, if somebody else is doing it, you can do it. If a national builder can get their build costs down to 70 to 90 bucks foot. There's a path. It may be difficult. It may be something that you have to get to a certain size before you take advantage of it may involve financing structure that's unavailable too. There may be reasons why it'll be harder, be more time consuming, or take a longer time to get there, but it's possible, like, so if someone's doing it, you can do it. And I think tactically thinking about that, like, Okay, how do we need to? We like to use tons of Windows, right? Very modern designs. Like, well, how do we get our windows down? Well, can we buy them Factory Direct? Okay, well, that cuts out these, like, sales reps. We save a little bit of money. It's like, okay, well, what factories can produce windows for less money? And then where are they? And, okay, how do we buy from them? And does that involve shipping and logistics and ordering in bulk? And, okay, is all of that worth it? Do we pick up enough savings like that? Idea of like, Yeah, this is all doable. None of this is impossible. So I think tactically thinking like that that like the big nationals don't have it's not, I mean, if you talk with them, it's not, most of it is just scale. But it's not like, it's not proprietary technology, right? It's not like they're like, nobody knows how we do it. It's like they're framing stick, framing houses in mass. And they just have really great supply chains and really great organizational processes so they can do it faster and cheaper than most people. But a lot of that you can lot of that you can mimic and totally apply to your business. So I think just tactically thinking like that, like lower costs or higher margins or more profit or more volume, aren't these unobtainable mysteries. They're all things you can do. They just may take more effort, time and money than you're willing to take on or, or, it may be a fact of you, you can take those things on. You need to bring in some other people, or raise some money, or make some partnerships or or find ways to cobble together. But it's all. It's all much more doable than I would have thought, totally well, and dude, I think that's like, what do you think keeps people from doing it. To your point, like, it's not like, it's a secret, it's not out there. What do you think keeps people from doing it? You know, it's funny. So especially in our business, there's a lot of like, what I would describe, and this is nothing wrong with this. If these people are probably happier than I am, and probably sleep more than I do, but there's like, what I would describe as like hobby farmers, where they're not Monsanto, right? They're like, Hey, I just want to build a handful of houses a year and make a great income. And they like to be on the job site all the time, and that's how they want to do the business. And they have no no interest or desire in more than that. And it's not because they couldn't or because they're afraid of it, like. Just, it's safe. They just, just wanted to have, like, a lifestyle business. And I think building homes, you can make a lot of money off of a few houses, and so it enables people to do that. So I think that's one part of it. I think the other part of it is, you know, people, in general, we are way more scared of loss than we are excited about gain. We're just wired that way, right? And it's a survival thing. Like, you'd be crazy if you were like, I can jump that cliff. And we, you know, there wouldn't be people over wired just to be psycho risk takers. But I think a lot of times, people just get in their head about, oh, but if I take that jump, then it's gonna, it's all gonna fail, and then, you know, that will be so bad and so unbearable. I don't care if I would have made more money or had a little bit more, I'm just not willing to take that chance. So I think there's that hardwiring component, and then there's a cultural thing that I've seen broadly where and it's, I think it's an American thing, where we're I say that, like, I'm European or something. I'm like, oh, it's America, aren't you? Armenian, I'm Lebanese, whatever. We're from state New York. So that's like, because Americans are kids, it's like, Bruce, yeah, you know, basically like leather jacket and a flag bandana. But we have a cultural thing of winners and losers, right? Everybody wants to be Brady. Nobody wants this burger. And it's just, we make people feel so much pressure, like, one you got to be a winner, but if you ever lose, you're a fucking loser forever. And that's but we make people feel like you just either win all the time, or once you lose, you're just this, like, white t shirt with a big old like, red stain on it, and you're a loser forever. And so I think that that paralyzes a lot of people, because they just feel so worried of the embarrassment and shame of failure and this idea that they will then be blemished as a loser forever because they took a chance. And I don't blame people, because look what we do to people like we, you know, publicly, we like, tear people down if they stumble at all and totally, you know, social media makes people feel like everybody's doing better than them, and so there's a lot of pressure on people to like, don't fuck up, don't ever fail. But it's resulted in people don't take a chance. And I think the sort of the secret, or the thing that people that are successful aren't telling people is like, everyone fails constantly. Like, like, every person I know with a lot of money has had multiple periods of time where they almost lost it all, or they were scared of losing all, or they did losing all, or they did lose all, and they went and built it back, like, right, take these big risks, and they got desensitized to the risk taking. But we but for some reason the mainstream makes everybody feel like you just it's so binary. So yeah, so I think that fear of failure because of the cultural implications of, of how it relates to your identity, that you now are a loser because you you failed for some period of time. But I just, I don't, I don't think that. I don't subscribe to that, and I've just seen it too many times that, like, I know tons of people that, and I've experienced it, you know, gone within an inch of broke and then made a ton of money, and with an inch of broke, made a ton of money. And you so I but I think that holds a lot of people back. They're just, it's been beating their head that they should be afraid of it kind of at the root, at the root of who they are. So are you, like, what's next for you? Are you gonna like, like, give Grant Cardone a run for his money? Or, like, Tony Robbins and like, just pump people up or no. Dude, that was great. It was great. It's a truth, dude. It's like, roll the dice. Roll the dice. And the skills that you've developed and like, you're gonna lose either way, yeah. Oh, it's true. Well, what's next is, I'm gonna go to Bass Pro Shops and I'm gonna try to buy you, you know, your Christmas present, your birthday present. I'm just gonna be like, I need, like, 200 yards of really scratchy fabric to give the wreath, and I'm gonna go and raid every grandmother's limb closet, and we'll have miles of gar garments for the rest of our help produce me a full doily outfit. You know, the shirt I need, the doily pants and some doily shoes, you know? Yeah, you probably have them on. There's probably a one piece. There's probably something you scooped up on, like the beaches of Mexico, or, like, an outfit you bought for Turks and Caicos, and you're just like, rocking it right now. That's right. Last serious question here, and I am curious, just because I love you and your brother, it's been awesome working with you guys. Do you guys actually want to do like a DR Horton Lennar type thing, or 100% so cool. The goal is to be a national, national scale infill production builder focusing on design technology. So the idea is, give that missing middle in all these urban areas really awesome, technologically advanced, well designed homes in these price points that people can. Board and not just produce really boring stuff that feels like a compromise to the consumer. We want to do that in multiple markets. We're in Austin, Dallas now. I think next stop is probably Nashville and Raleigh. And the goal is, in five years, to be a billion dollar company and be in five plus markets. And I think we have the right people and backing and knowledge base to do that, dude, I love it. I think that's sweet. And that's, I mean, I think in terms of, like, the boring product conversation we were talking about this in Omaha, and it's like, how many of the Lennar and DR Horton, I'd love to have one of their, like, execs on the pod one day? Maybe that's a goal. But like, how, like, the product that they're actually building. The people that I know that have bought a DR or Lennar house, it's like, in the first, like, year, two years, five years, they have some, like, really serious shit go wrong with their house, and you start looking at like they're just cranking production, and they're trying to fill an inventory shortage, and this is the opportunity for them to hit their velocity. But then you're getting a 30 year mortgage on a product that's going to last 15 years, 20 years, like it might even last the life of the loan, right? No. So this is going to be a contrarian opinion here. I'm gonna give you my oh, let's hear it. Let's hear it. So I actually think what I think national the national builders actually do it really, really well. And I'll tell you, when it comes to floor plans, utilization of space sort of optimizing, I think it's hard to beat what a national builder can do with space. I think that their process of production is by far the best their ability to produce more things in a cost effective manner. Now, I think that because the price points that they tend to operate in, and because the cost they have to get to, they can't do all the extra things always, that would probably be more beneficial to the consumer, but it's a function of the price point that consumer wants and the scale they're playing at, right? So it's a to me, it's like, hey, people want Zara. You're not pissed at Zara. That's not Laura Piana. You're just like, hey, I went to zarix. I wanted a $20 leather jacket because I'm going to a nightclub, because I wanted to write Thomas, because we're in Vegas since my birthday, right? And it's white, sure, totally. And that's, that's how I forever see you just an all white suit with no shirt on in the ARIA lobby, but smoking a cigarette and then telling you Happy birthday, dude. If only that happened. They do it really well, is my point. And they do it really well, and I think they do it as best you can in the price points. They're in my only knock on them, and it's not taking away up tomorrow and decide to do this and decide to do this and probably smoke it, but they're just selling to the fattest part of the bell curve. And so I don't think there's much emphasis on design to be interesting, right? They're like, we don't really need to these don't need to be cool. There's no there isn't a tremendous value in them for that. Because I think turning a big ship like that is slow and difficult. And I think that for them, they're like, hey, we need to have 20 floor plans that we can build 20,000 of a year. We're not going to do a bunch of cool, tricky things. And we really don't need to reinvent ourselves and be technology focused or be very like design oriented, because they're really there. They've already cornered, sort of the beef of the market that maybe doesn't care about that, right? Like, not everybody is buying a shirt that looks like a doily. Some people just bathe in Carhartt and, you know, and that's like, so, yeah, think they're the villain that people think they are. And I know, like every builder listening this, knows we all get warranty calls. We all despite best efforts, houses are, you know, wabi sabi, the imperfection of creation. They're hand built in the field by 20 year olds outside, right? There's always stuff that messes up with them. And so, you know, hollow core doors is, you know, a decision based on a price point. But it's not because they're villainous, and you know that they're bad at it, it's that they're so good at it, but they're valuing different things. And so I think there's room to come in and say, Let's value design and technology, and then do the supply chain things to do that and be competitive on price, and go where the market can afford that, right? So totally focused on infill. There's a little bit more money to spend and make the houses a little bit cooler, whereas at the absolute entry level, it's a different it's a more difficult proposition. You got to have real scale. But I think there's still room for it. But, yeah, I think the national builders are good at what they do. I think there's just room to do it a little bit cooler. I like your perspective a lot better than mine, and truthfully, like that makes a hell of a lot of sense. I think that's probably a message that needs, like, shared a little bit more broadly. Yeah, you were hoping I'd say yeah, they're so no, no. I think a year in sales, what happened is exactly what. Should have happened, because, like, I'm like, I truly sit here and I'm like, Dude, what is happening with like, every everything I hear about these houses is just like, falling apart. Shit happens. Hear that and the other and it's like, yeah, okay, well, are you, like, is this like, a recency bias, or is this, like, actually the case, and it's probably more of like a recency bias and like, but go ahead, yeah, it can be, it could be that. I mean, it's, you know, especially if you're a first time home buyer, you're just living in apartments where anything goes wrong. You just call somebody right, and then it's like you weren't living in that nice of an apartment, right when we were in our 20s, you know? It's like we weren't living good. So we get into a home, and here's what it is. The expectation is, everything is a manufactured good. You buy a car from a factory, it's perfect. If it's imperfect, you give it back that you get another one. It's perfect, right? Everything has to be perfect. But houses are hand built by a bunch of crazy, just slightly older than teenagers. Right outside, right? The craziest part outside, it's 100 in the elements, smoking cigarettes, drinking monster energy drinks, and no and, you know, with a hangover, and they're building these out. I mean, that's just the reality. It's like, it's like your dad building you a fort. You know, were you pissed that that force didn't pulled up? So good. So I just think we're used to buying perfect things, perfect products, you know, we get an iPhone, it's fucking flawless. And you get house, and you're like, this fucking the you know, the drywall cracks a little bit and that door sticks a little bit, and, you know, they touched up the paint. But I can see that they touched it up. And isn't that just all of us, Reese, aren't we all just imperfect creations, you know, just doing our best, you know, so if, if anything this podcast, I hope this was helpful for the listeners, but it made me realize how much I do miss spending time with you, wealth of knowledge, just a salesman at heart with nothing but logic. Just, you know, it's awesome. It's awesome. I love it. I'm gonna go to Bass Pro Shop and catch some lunch. Thomas, I appreciate you for hopping on, dude. This is a great, yeah, well, you're back in, you're you're in Boston now, right, dude, so the wife and I were selling our house in Denver. So if there's anyone on here is trying to buy a house in Denver, it's on the market, and we're getting ready to move to Boston? Yeah, to stand up a little go to market office for adaptive. Well, I'm gonna have to come see you in Boston and just harass you. This is the thing I always forget. I give you so much shit, and then I see you in person and you're a big dude, and I go, Oh, why did I say all that? Theresa's like six three in burly and clearly affiliate football. Dude, I'm not six three. I'm not saying, Sorry, I look like a center. Maybe you're a big dude in real life. Yeah, you take any of my shit when I see you, it's because you wear cashmere sweaters and chains. That's right. Like, I'm scared of you. It's like this guy knows someone that could give me a pair of concrete lashes. At least I'm shiny enough that you, if you, if you attack me, the light will reflect, and people will be like, something's going on over that nice, shiny man, I love it. I love it. Okay, well, we'll catch up more here later, I've got some updates for you on the on the old adaptive But dude, I appreciate the hell out of you. Thanks for jumping on. Yeah, for having me, man, of course. Well, we'll talk to I mean, thanks later. Yeah.