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Interviewer: Greetings everybody and welcome to Episode 39 of the Panelized Prefab Kit Home Building Show. With me as always in his special president seat is the President and Founder of Landmark Home and Land Company, a company which has been helping people build their new homes where they want exactly as they want across the nation and worldwide since 1993, and that man is Mr. Steve Tuma. Steve, how is it going, my friend?
Steve Tuma: It’s going great.
Interviewer: Now, everybody is going to be envisioning you sitting on some kind of throne.
Steve Tuma: The pedestal.
Interviewer: Game of builders.
Steve Tuma: Yeah. Well, yeah. We try to help people have the knowledge base so that they understand how we are trying to help them and what we are doing to help them.
Interviewer: Right. Well, it makes sense. You’re the guy that they’re going to come to so you’re the one that needs to have the knowledge and you seem to know what you’re talking about after 39 episodes.
Steve Tuma: Yeah. Well, also, been doing this this since 1993 helping people design and build their homes.
Interviewer: Yeah, not podcasting but building.
Steve Tuma: Right.
Interviewer: So, we are going to talk today about something that we touched upon from time to time. And that’s the phrase, owner/builder. And a lot of people probably wonder exactly what we are talking about. It may seem like it’s sort of self-explanatory but we are going to get into it today. So why do people own or build? Let’s get into that to start with.
Steve Tuma: Well, it’s kind of interesting because own or build, we’ve been talking about it so it seems kind of specific to us. But a lot of people call it self-build. There’s a variety of different words that can be used. But the owner/builder can go range from the person that’s just managing a crew to build and it could also mean the owner is building, digging the hole, pouring the foundation, framing the house. We’ve had customers of all ranges like that. Some of them hire a contractor to build it. Some of them act as the general contractor so they coordinate the building but they don’t actually do any of the building processes. We have some families of friends that get together and they do the work out on the home that they know and then they hire people to do other components. And we have had customers that literally build the whole home. They’ve got friends or family that can literally do the whole process. So the idea of owner building is just – I would generalize it to the point of someone wants to know what they are doing, why they are building a home, they want specific details, they want to know it’s done to a certain degree, and a lot of times, they just don’t want to pay someone for what they can do themselves.
Steve Tuma: They want to have an involvement. They might be a little skittish as to the margins that contractors can make and they say, “Hey, why should I pay someone for what I can do myself?”
Steve Tuma: Sometimes it’s financially driven that you can get more of a home for the same price or you can save money building it. Others just desire. People have just always wanted to do it. We do have some families that work with every adult in the family to get a house, do a new house every year or two. Others just build a house and in two, three, four, five, ten years, they move out and want to build again. It’s just kind of something that people want to do. So that’s what and owner/builder is. It’s someone that wants to, in our perspective, someone that wants to have an involvement in the building. Now, a lot of people think that hey by going on a contractor, you give the job and the headaches to someone else. It’s not true. You’re still involved with decisions, things come up, change orders, cost overruns that a contractor will give you that you need to address where with an owner/builder, you can control the design, the materials, and the budget and the schedule. You have better control so you don’t run into those awkward situations.
Interviewer: And it’s got to be fun too. I mean even if you are not doing all the work, I would imagine you are calling yourself and owner/builder can mean, “I’m getting in there and helping to mix cement,” or something like that.
Steve Tuma: Yeah. And sometimes it’s the case. Other times, the owner/builder drives by and takes pictures every day. Other times the owner/builder is literally out there, digging holes or calling saying, “Hey, Steve! I’m six-foot down in my basement. I just want to give you an update.”
Interviewer: And nothing wrong with that.
Steve Tuma: Yeah. So it covers a span of what people choose to do. I’d say ultimately, people just want to know how their house is built and they want to get the house they want. They don’t want to buy a house that someone else has and tells them it’s a great house. They know what they want in a house and they want to do it.
Interviewer: Right. Do owner/builder tend to take longer to build their homes or is it something on the contract that they are actually quicker?
Steve Tuma: Well, it all really depends because we don’t consider home building to be a race. It’s not like, “Hey, let’s slap the house up and move in.” It might be done in other systems. And our customers want to be involved and work on it and they are saving a substantial money, sometimes in the hundreds of thousands of dollars.
Interviewer: Yeah, that’s substantial.
Steve Tuma: So a lot of them also build their own home to avoid banks, just the fees and the hassles associated with working with some banks. So I would say in general, owner/builders might take a little longer. They are detailing their house differently. They have more involvement in the design of the home. They have more involvement making sure that it gets built the way they want. They have more involvement in controlling the budget. It’s their own money so they watch it compared to going somewhere else and someone is saying, “Oh, you want to move that? You want to change that? $2,000. $2,000.” So they are able to go through. But the thing about it is this allows the owner/builder to be on their schedule. Some people intend to take six months or a year to build their house because they are doing it as they get money or they might take two years if that’s their schedule. And a lot of markets, so you get into the Rockies way up, you can only build a few months out of a year so the people might say, “Hey, let’s put the foundation in and the walls up and then work on the inside in winter or we will do the rest in the following summer.” So the key to it and the timeline is the customer gets to work on their schedule. We always suggest that people move along, do it well, make sure it’s a quality built home and they do have to understand that sometimes in some areas, there are restrictions on the time that you’re allowed to build a home. So most people get their houses done I would say in four to eight, nine, ten months, depending upon what their work schedule is. But sometimes people say, “Wow! The local builder told me you could have it in three months.” I’m sure he can but if the customer sits there and figures that they are saving a $100,000, they think it’s pretty cool to work at it themselves.
Interviewer: Right. Yeah, yeah.
Steve Tuma:When you look at the opportunity cost of that $100,000 and the cost of that and interest to a bank, it’s a tremendous savings to people. So when you look at the long-term savings of that or the ability to work off of a slower mortgaged amount or expenditure from savings, the financial savings is huge.
Interviewer: Well, I guess being an owner/builder comes down to bang for the buck. I mean do owner/builders in your experience, do you think that they would actually do get more bang for the buck?
Steve Tuma: Well, what we’ve generally found is people will build a house at a lower cost or they will spend the same money and get a better appointed home.
Interviewer: Got it.
Steve Tuma: So they might go through and instead of a 2-car garage, they have a 3-car garage or they’ve got cathedral ceilings or they’ve got a game room or they’ve got different features that are in the home. So yeah, by doing the work yourself, coordinating it, there’s a substantial savings and/or if you want to spend a little more money and just detail it out, it’s something that can be done. And what we found is our customers aren’t just building a house to sleep in. They are building a house – it’s a source of pride. It becomes kind of an heirloom. We’ve had a lot of families that are building homes and they’re on a family land that has been in the family for some time or the family saved, three, four family members have saved to build the lake house where everyone could get together for the special days, the holidays, the birthdays, different things like that. So in a situation like that, people want to know, “Hey, there’s the grand living room. There’s a dining room,” that’s big enough for their particular needs. We’ve had people specialized houses, equestrian properties, tack rooms, and houses. We’ve had people that are building oceanfront or lakefront and they want to pull their kayaks right out of the lake and put them in the house or have a boat ramp right out of the house.
Interviewer: My dream home.
Steve Tuma: So that’s where it gets into it. It’s not just the financial savings. It’s what are you getting for it. Kind of like I’m saying, “Well, are you going to buy the cheaper shoe that doesn’t fit or are you going to get the shoe that does fit?”
Interviewer: Right. Yeah.
Steve Tuma: That’s the point. You want one that fits and works for your land and your family’s lifestyle as well as your budget.
Interviewer: It seems to me designing your own home to begin with is going back to that shoe analogy, it is kind of interesting. It seems to me that what Landmark provides as much as just the knowledge and the ability to help a customer build their house, it’s building a house that fits them and you can’t just walk into a pre-build house and find that. That’s an interesting thing and I think you guys should be proud of what you do over there.
Steve Tuma: yeah. Well, that’s where you’re getting in a situation of controlling the quality and specifications. I kind of say, “Let’s just pull a random birthday party.” Do you go to a store and buy a chocolate cake with vanilla icing or is your grandma making the cake?
Steve Tuma: Grandma’s cake is always better.
Steve Tuma: So it’s kind of one of these situations where you are able to go through and put things where it’s a priority to you. If you want a nice fireplace, maybe put a little more money into that. If you’ve got an exceptional view, maybe you need some more windows and a deck outside. If you’re someone that likes to cook a lot, maybe your kitchen needs a little bit more detailing. So that’s what’s able to happen. And people could choose within that. Like most products, there’s always a good, better, best. And the price varies with that. So someone that doesn’t cook as much would probably go for a more typical kitchen where if someone is really into cooking, their family get together, friends coming over, they’re going to prioritize a different quality kitchen, a different quality stove. So that’s what we are able to do is work with them to make sure that the money is spent in a priority that they want for their house.
Interviewer: Right. And we are talking about – you just mentioned quality and specifications of the home. Quality is a big thing. That could go back to you talking about building it fast or building it right. Quality is a big thing it seems to me like becoming an owner/builder helps you to control that. It’s a big thing to control. It’s really a nice option.
Steve Tuma: Well, what’s nice is when you are controlling the quality yourself, first of all, our plans will help you understand what it is that’s being done. Like take for example, an insulation.
Steve Tuma: You will have an understanding of the insulation that goes through. There will be mandatory measures of how to install the insulation properly. So what that’s able to do is make sure it’s built right but also, a well-built home will last better. It will have less maintenance and the resell is better.
Interviewer: Right. Yeah.
Steve Tuma: And that’s a key to it. There’s not – there’s probably no one that I know of that wants to build a home and they have a maintenance issue every week. They want to build a home once and then enjoy it. So that’s the key to it. Someone could say, “Hey, this is what’s of value to me. I’m going to put money into it.” Or something isn’t as important, we still want it to be good quality but maybe you could work with a material that costs less. The end result it you end up with a comfortable home. So that’s the point that we try to tell people because this is kind of, “What do you want?” And we can help them formulate the idea if they haven’t done so themselves. We’ve helped a lot of people so we understand the needs and some customer’s pitfalls and being able to visualize a house or understand how it comes together or how do you put a house on a piece of land. We are able to kind of have a little discussion with them and bring it together so that they can then go through and work on the details. We are a resource to help them, the classic one-stop shop idea.
Interviewer: Right. Right. Yeah. Now, what about qualifications? Is there any special qualification that an owner/builder needs to have? Do I need to go take a test to become an owner/builder?
Steve Tuma: Well, this is what’s interesting about it. A lot of people are like, “Well, I’m an owner/builder. I don’t know. I’ve never swung a hammer. I’ve never installed a furnace.” And what’s interesting about this is we’ve had all different types of varieties of customers. Some are professional builders. Some are professional developers. Some have never built a home. Some of them built a dog house. Some of them just naturally have different mechanical abilities or understanding of building. But the reality of this is, it’s kind of a coordination project. So sometimes we will have someone go through and say, “Hey, I’m a single man. I’ve never built a house but I want to do this. I want to do this. I want to build the right house for my kids and my future wife. But I don’t know how to use a saw.” And I say, “Well, you’ve managed the family or you’ve managed your life. You went through school or you got a certain career or you do it. That’s an understanding of what needs to be done, coordination, and scheduling.” And then when they see that they are kind of like, “You are right. I go to work and I manage so many people. I work in a group and manage people. I manage my family. I do whatever it is.” And their own person hobbies or jobs. And they realized that this is theirs.
So there isn’t a test that I know of. I know that there are people selling books and stuff but sometimes I think people are – they sell books instead of knowledge. So what we have found in situations like that, it’s more driven by the desire to go through and coordinate a project. So if you happen to be that person that can coordinate and paint and put a roof on and install a furnace, that’s great, but if you’re also the person that’s strong at managing, understanding things, putting it together, it will work. Every year, we’ve got a lot of people that are in the – you could consider them professionals. You can consider them people that have built multiple houses. We have just as many people that have never done it before. They all finish their homes. They all work with us for plans. They all get permitted. And I think the key to it is no matter what the level of knowledge, it’s kind of interesting. The number of calls or questions we get from the professionals in the business compared to someone that has never built, their customer support calls are about the same.
Interviewer: Wow! That’s an interesting statistic.
Steve Tuma: Yeah. So it tells you it’s more, are you determined to do it? Is it a desire? Are you paying attention? If you need help, do you ask for it before you get into the problem? And that’s what we found the key element to it. It’s just an understanding of the management of a job. A lot of people will say, “Hey, I should get a builder.” Well, the modern day builder is a coordinator. He is not doing the work.
Interviewer: Right. Right.
Steve Tuma: The general contractor is hiring a subcontractor. He is pointing his fingers and coordinating stuff. So that’s why people do it. General contractors make 20 or 30% of more. So what they are able to do is save that money by coordinating. It’s what they are doing every day in their life already. And we are here to help them with the plans, to understand the process, and move forward. That’s part of our service is customer support. That’s a key element.
Interviewer: I’d be interested to know the percentages that you think of people who build the home themselves or hire people to do it like you said. That would be an interesting thing to find out and also to find out if you’ve ever discouraged anybody from swinging the hammer themselves.
Steve Tuma: Well, we want to have strong and reasonable product and service or someone isn’t up to it. We don’t suggest do this. We want the house done right. The houses get done. They all get designed where they get permitted. So sometimes if people, just talking to them, they will generally tell themselves, it’s like, “Steve, I’m getting into this and it’s just – I can’t get this deep.” Then we will say, “Well, coordinate it or get a guy …” sometimes there are retired contractors, building inspectors with side jobs that become a “job coordinator.” So they can be involved but maybe they don’t understand electrical installation. They can go through and work with the person. But what’s interesting about this, this is just like anything in life. If you have good quality people, they are going to help you.
Steve Tuma: So the reason that people that maybe don’t have the skills to actually go do the work themselves, they coordinate more, is they understand. Get a good electrician. Get a good foundation person. Get a good heating person. Because then they will be able to go through and help you through the process. They are coaching you on that situation. So that’s what it is more. I don’t think that there’s a general contractor out there no matter how long he has been in business that know every single detail about every single component.
Steve Tuma: He may – he or she may know a lot or a bunch but they probably don’t know every single detail with the changing codes, the new technologies, the new materials. So at some point, they are relying on the “specialist” subcontractor to get it done. So when you look at that map perspective, what’s the difference of the general contractor and the owner/builder? The guy might have a little more experience. He might have an understanding. But the thing is, that’s something that a customer, an owner/builder, can gain themselves and see the financial savings in doing so. So you asked how many, I’ve actually never run that number. I would say it’s a pretty even split of people that are general contractors and do some work and then others that hire it all out. The people that do it all like literally friends and family literally do every process is a smaller component. But most people, I would say, most of our customers are acting as a general contractor and hiring subcontractors to do the work that they don’t do themselves.
Interviewer: Got it. And Steve, talking about contractors and if you go back, that’s another reason that’s good that if you go back to the Landmark website, you will find these archived podcast. And we do touch upon that on a couple of the podcasts on the best way to find a good contractor, how to go about doing that. And if I were owner/builder or a perspective one, Steve, and I had a question like that like if I called you, “Steve, I want to build a panelized home. How do I find a good contractor?” Is that something you guys would easily delve into?
Interviewer: Well basically, what we found is that once people have a set of plans and they have a schedule, the contractors are available. Now, sometimes there are market conditions where people are busy or if someone is building in extremely remote area where it might be a little harder to find, but once they hear that you are serious about building, you can go through, get one contractor. Generally, one contractor can lead to another. So an excavation contractor always knows a septic installer, always know a foundation person. A foundation person always finds a framer. Plumbers, electricians, and heat people are always around each other. So it’s generally one of those things. Get one or two people and go through. Our customers have generally thought this through. They understand what’s going on. They’ve done preliminary reviews of these details. And it’s not as hard as people may think to go out and find a contractor. If you are organized, you understand what’s going on. You have a schedule of the financing in place. The contractors will pay attention because they know that you are a serious person.
Steve Tuma: If you are out there saying, “Well, I might build in the next 20 years. Can you meet me Sunday morning?” And talk about your house. They are probably not going to show up. If you say, “Hey, we are building a 1300-square-foot home in this town, I own the land and we are starting in 30 days,” I think the people will do it. The contractors and subcontractors are busy so they want to know that they are spending time with customers that are interested in moving forward. And we have a similar opinion. We want to help people plan their home. But sometimes if it takes a year or two for them to do it, that’s fine. We’ve had people take years to sort things out, the finances and land, get the land in line, just get things timed together. So we are willing to do whatever it takes to help a customer. And we also have fun doing it.
Interviewer: Well, that’s important. I mean if the owner/builder is going to have fun, you guys might as well have some fun too.
Steve Tuma: Right.
Interviewer: Perfect. Well, that’s going to do it for us today. But before we go, Steve, as we always like to do, let’s tell our listeners how to get a hold of you guys over at Landmark Home and Land Company.
Steve Landmark: The best way is to look at our website at LHLC.com. That’s basically the initials of Landmark Home Land Company. It’s actually Landmark Home and Land Company. But it’s L as in Landmark, H as in Home, L as in Land, C as in Company dot com. You can check our website out. There’s a variety of details, videos, these podcasts. And you could also send an email inquiry. You can email us directly at – you can reach me at Landmark@LHLC.com. Again, that’s Landmark@LHLC.com.
And you can also call 800-830-9788. Mike will answer the phone and take care of you and walk you through the process. We do understand sometimes people just want to talk and get a feel for what we do and how we can help them with the project. We are proactive. We do answer our phones. We will spend the time to talk to you. If for some reason you get a voicemail, we will get back with you right away and get you taken care of. Communication is very easy with us and I think you will find we are very supportive. We enjoy what we do and we want to help our customers to have good homes.
Interviewer: And you guys are known for customer service and that’s something that you don’t get a lot of these days.
Steve Tuma: Yeah. We do everything we can to help whether it’s related to our component of the project or not. We realize we are in the owner/builder business and sometimes there are little curve balls that come up. Chances are, we’ve seen it before but our customer may not have but we are there as a support system, a resource to make the process enjoyable.
Interviewer: Well, 1993 was a long time ago. So you guys have been doing this quite a while and experience is what a lot of what people are going to get from Landmark and that’s important.
Steve Tuma: That’s it, and a good time and relationship and information. That’s how we can help.
Interviewer: Great. All right. So for Steve Tuma and myself, thanks again for listening to the Panelized Prefab Kit Home Building Show. Be safe out there folks and we will see you next time. Thanks, Steve.
Steve Landmark: Thank you. Have a great day.