Benchmark Happenings

Land2Homes: Creating Affordable Housing Solutions in Northeast Tennessee

• Jonathan Tipton, Steve Reed & Christine Reed

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Steve Reed, Co-owner of Benchmark Home Loans, shares the story behind his new venture Land2Homes, which provides affordable turnkey manufactured housing solutions for buyers priced out of the traditional market.

• Land2Homes developed after seeing first-time homebuyers priced out by high interest rates and rising home prices
• The company purchases land, handles permitting, orders homes directly from factories, and delivers complete turnkey properties
• Modern manufactured homes feature quality construction with 2x6 framing, energy efficiency, and durability
• Homes typically range from 1,500-1,800 square feet on approximately one-acre lots for $250,000-$270,000
• Properties include extras like landscaping, gutters, and blacktopped driveways not typically found with manufactured homes
• The "agent commission builder" program pays realtors 2.5% on referred clients who purchase complete packages
• Future plans include creating a small "village" setting with model homes for buyers to tour
• Credit rehabilitation services available to help buyers improve scores and qualify for better rates

If you have questions about mortgages or Land2Homes, call us at 423-491-5405 or visit our website at www.JonathanAndSteve.com.


To help you to navigate the home buying and mortgage process, Jonathan & Steve are currently licensed in Tennessee, Florida, Georgia, South Carolina, and Virginia, contact us today at 423-491-5405 or visit www.jonathanandsteve.com.

Speaker 1:

This is Benchmark Happenings, brought to you by Jonathan and Steve from Benchmark Home Loans. Northeast Tennessee, johnson City, kingsport, bristol, the Tri-Cities One of the most beautiful places in the country to live. Tons of great things to do and awesome local businesses. And on this show you'll find out why people are dying to move to Northeast Tennessee and on the way we'll have discussions about mortgages and we'll interview people in the real estate industry. It's what we do. This is Benchmark Happenings, brought to you by Benchmark Home Loans and now your host, christine Reed.

Speaker 3:

Now your host, Christine Reed. Welcome back everybody to another episode of Benchmark Happenings, and today the star of our show is Steve Reed, with Entrepreneur of Benchmark Home Loans, and my husband. So, Steve, thank you for being on today.

Speaker 4:

Glad to be here. I was starting to wonder if you were ever going to invite me back, so thanks for having me.

Speaker 3:

You're always welcome. You know what this is your podcast anyway.

Speaker 4:

Well, yeah, jonathan and I, but you know he's even harder to get on this podcast than me.

Speaker 3:

He is. I mean, I would have thought Jonathan would have really enjoyed being on podcast, but he doesn't want anything to do with it, he loves it once he gets in here.

Speaker 4:

You just getting in here is the tough part, yeah yeah.

Speaker 3:

So, steve, today's going to be a special podcast and I'm really excited and I'm glad that you wanted to come on because I wanted you to share your why on a new business adventure. Because I've known you for 25 years and you are the epitome of what an entrepreneur is and does and I have so much respect for you and admiration and you've been such a successful businessman over the years in developing business and God has truly blessed you and I'm blessed to be your wife. So today we want to talk about a new business that you've started out of necessity, and we know that all great ideas stem from necessity. That's the mother of invention, right? That's what they say.

Speaker 3:

Yeah, so'll let you um talk about your new business venture with you and jonathan and and really tell us about the why, but give us the name okay, we'll start with the name.

Speaker 4:

The name is land, the number two homes, so land to homes land to home and there's a reason behind the name. I'll kind of go into that. But yeah, the why is probably the most fun thing to talk about with this business. Because I've kind of been re-energized here and if you've known me over the years, I've never been one to go a lot of different directions. I've kind of laser focused on whatever I did and tried to do that well, and you do.

Speaker 4:

Yeah, well, thank you, but it's and I don't like to be the Walmart of, you know, of mortgages. We like to focus in one direction. But I guess a couple of years ago Jonathan and I started seeing we had a lot of clients that got priced out of the market and a big portion of our business used to be first-time homebuyers. We hope that eventually will come back, yes, but while we watch those first-time homebuyers get priced out of the market due to a rising rate environment and rising price environment, which is still going up even to this day, rates have kind of stabilized but they're still high sixes versus 2% and 3%. So that's kind of stuck right there and it probably will be for a while. But we just watched a lot of those first-time homebuyers get frustrated. They couldn't afford the kind of house they wanted. You know a lot of them look in that two to $300,000 price range Definitely couldn't get anything new construction for that. If they found existing construction, it needed a lot of work, and so we were losing a lot of these clients to mobile home dealers and, you know, like Clayton Homes and some of those guys, and so we just thought we'd take a different approach and it's really what I think our why is a pretty noble, is a pretty noble reason, and it's really to help inventory, help first-time homebuyers or any type of homebuyers you don't have to be a first-time but we really feel good about our why behind this. Now, don't get me wrong, I don't want to sound all noble, like we don't make money, because we do make money at this, but this is a heck of a lot of work too and it's a lot of investment as well. So we do make money, but we're sticking our neck out a lot to hand a turnkey package to a buyer.

Speaker 4:

So what we will do is we'll go, we get a lot of auctions and we look for property a lot during the day, day and and night, trying to find land, which is really tough. But we'll find that land and then we'll go, uh, purchase the land. We try to keep as much as we can in inventory and then we'll order homes and put on that land. We will go through the permitting process for septics, for, you know, just getting the water tabs, for getting the electrical, um, for just getting the water tabs, for getting the electrical, just any kind of permits you've got to have. We'll go through that and we'll line up all the subs, we'll order the home direct from the factory and we'll put that home on that property and hand a buyer a turnkey product so they don't have to go out try to find their land, try to find the home, try to find subs All that would be impossible if you don't do this every day.

Speaker 4:

You know. Try to find their land, try to find the home, try to find subs you know all that would be impossible if you just you know, if you don't do this every day. So we've learned a lot over the last I don't know year, year and a half, and it's just kind of taken off. You know we're we're doing. I think we have four or five going right now. Most of those are already sold before they hit the market and it's delivering a product in the 250 to 270 range that meets a lot of needs, normally about 1,500 to 1,800 square feet, and so we feel like we're really helping out the first-time homebuyers and just homebuyers in general by being able to keep the price point what it is. If you did similar new construction on site built, you would probably be about double that. So we feel like we're providing really adequate more than adequate really great housing at a good price point.

Speaker 3:

It is and it is and I'm proud of that and I know that you've always you've worked really hard on this and it's been a lot of learning that you've had to challenge yourself. But I've watched you over the last two years in this process and you've loved it. You've loved it because you know we should think that you know if someone has $250,000, $300,000 to spend, they should be able to afford a nice home, but that's not the case in today's housing market. And I don't think we'll go back either.

Speaker 4:

No, and the interest rates are not.

Speaker 3:

we won't see 2% and 3% interest rates again, yeah yeah, percent interest rates again, yeah, yeah.

Speaker 4:

well, and another thing that played into it when jonathan and I first formed the company was we were looking at you know, if you go to a traditional mobile home dealership and you get that type of financing, you're going to pay 10, 11, 12 percent for your financing and people pay that yeah, because we're mortgage bankers, we're able to do the same sometimes with that financing get them a way better rate, give them a way better experience, and everything being under one roof uh, just makes it so much more streamlined the whole process, because there's a lot of um I don't know oars in the water there, water.

Speaker 4:

There's a lot of things going on with that process If you think about it.

Speaker 4:

if you're trying to finance a home and you've got some credit issues and then you're trying to pick out a home and then you're trying to find land and you're you know there's just a lot of different inner workings there and if you've got that all under one roof it's so much easier for the communication aspect and we've learned a lot. Like I say, we used to laugh at ourselves a year ago and we just said we're two morons trying to be builders, and so we realized what we didn't know. So we kind of went to school on a lot of that stuff and studied it and some of it was the school of hard knocks.

Speaker 3:

We've learned some hard lessons but I think the product that we're putting out and really from the start the product has been second to none really yeah it, and I've seen, you know, and all the properties are so nice and it's so much more than what you see in a typical double-wide mobile home. And I mean you guys go the extra mile of landscaping. You know you have gutters put on them. You even blacktop the driveways and most of the driveways are dirt or gravel, but it's just so nice and it's cleaned Turnkey. We have someone that goes in and does the final cleaning there and it's just there. It's great and it provides a wonderful new home for a family, a single person, a small family, young, older, couple, and it meets. I think what you guys have done is you've seen that need and you're meeting that niche in the market and providing that turnkey solution with land to homes.

Speaker 4:

Yeah, and we're pulling on all of our prior experience because we've been financing these type of homes for years.

Speaker 3:

Right.

Speaker 4:

And that's really helped us, just having that background. We kind of know what's required on a foundation inspection and what kind of product you have to have to get a loan on the secondary market in the mortgage world. So having that knowledge has just been incredible. As far as for our success to be able to do what we do, and what a lot of people don't realize is that these homes are built now, you know, with two by sixes. There's a lot of HUD requirements on these homes.

Speaker 4:

And it's not your granddaddy or your daddy's double wide. These things are built really well and you know they stand up to high winds if they're tied down correctly, which we're required to do, and so the construction of these is really high quality. I mean, it's not.

Speaker 3:

It's not what they used to be right and they use lasers when they build so there's not a lot of waste. You've been to the factories. You see how these are built. You've been to shows and I think it's exciting. So the why I love the why it it excites me and I know it meets a need and it helps so many people. What's your vision? Where do you see land to homes five years from now, steve?

Speaker 4:

well, at this point, this point, we haven't even advertised and so it's going really, really well even without advertising. So we're almost afraid to advertise at this point because there's only so many hours in a day, so I think the sky's the limit for this. We're right now. We're not your stereotypical mobile home dealer. We do have the full license. We could have a lot out there with 20 homes on it, but we choose not to have all that overhead.

Speaker 4:

So we can pass on some savings to buyers where it's not so expensive. But we do see in the future probably having a small lot with, say, four or five homes and kind of built like a little village and you can kind of go tour those. But 99% of the time buyers don't buy the home you've got sitting on your lot. They want to pick out their own, which we can get these in in six to eight weeks normally, unless it's a crazy, crazy market. So we would like to have a few that sitting there where people can look at they. Can we try to. We tried, starting about six months ago, to keep a lot of pictures of the ones we've done previously so you can look at that. But no matter what you look at on a screen or on your phone or whatever the case is, it's not the same as being able to go into something so we're trying to do as much virtual as we can right now, only out of necessity, but it's kind of the way of the future too.

Speaker 4:

but I do see us growing into a kind of a really cool little village lot with picket fences and astroturf, just like you'd be in a little neighborhood with four or five houses where you can walk in and then still have the virtual piece with that, and I think that's where we'll be in five years and way sooner than five years.

Speaker 3:

Most likely at the rate you two are going and as hardworking as you are and I know there's been several of your realtor partners that have been super excited about this and have stepped in- I'm glad you mentioned that, because that was another part of the why that I left out.

Speaker 4:

I'm sorry I forgot that, but the realtor aspect was in there too. As far as the why. The realtor aspect was in there too as far as the why.

Speaker 3:

Because if a typical customer came to us wanting to buy a home and let's say they had a $250,000 price range and they got disgruntled because they couldn't find anything for that, well and if they do find one in that I didn't mean to interrupt, but if they do find one, steve, it requires so much work, exactly, the houses are in such disarray, yeah, and then you have to find people who can do that type of work and they don't have the money to fix up these homes no, so that that and and it's really hard to get a loan that you know buy a house and get extra money for home improvement.

Speaker 4:

So that's a product that's out there, but it's. It's a little bit more difficult. So we had a lot of these clients that we would have pre-approved and a great realtor would have sent us this client.

Speaker 3:

Right.

Speaker 4:

And next thing you know, they've defected over to another mobile home dealer.

Speaker 1:

Sure.

Speaker 4:

And that mobile home dealer is going to capture them. They're not going to pay a realtor commission. In most cases they are going to have a higher interest rate on the loan. And so with our program we call it the agent commission builder and it helps agents build commissions because if they send that client to us and they buy a home, we pay them a 2.5% referral fee. That's great.

Speaker 4:

And they don't have to do that much. All they have to do is give us their name, we take it from there. They don't really have to be involved in the process from start to finish. We take it and then, when that home closes, we pay them a commission on the full price of the home, the improvements, the land. We pay them commission on the whole package. So it keeps realtors from losing clients, losing commission, keeps us from losing loans and it gives a client a really good package, really good product. So hey, it's a win-win-win.

Speaker 3:

It is a win and it doesn't put them in an exorbitant amount of debt. I can't imagine having 13% interest rate.

Speaker 4:

Yeah, I mean in some cases that's on the high end, but I've seen a lot that's 11 and 12.

Speaker 3:

But a lot of these people that with their credit and stuff it has to be higher because of the risk.

Speaker 4:

Well, we've got a program, too, that we've got people in what we call our sales funnel that want to purchase now that they've had some credit issues. So we get them with our credit rehab guy. He's in Texas, he's great, does a great job. We've worked with him for I don't know, 10 or 12 years, I guess, and so we get them to him so he can take their credit, maybe from a 600 score to a 650, which sometimes will take three months, sometimes it'll take six, sometimes it'll take a year.

Speaker 4:

But if they're willing to walk down that path and's a cost to the client to for him to do that. He don't work for free, but it's not exorbitant or anything. It's not bad, but that's another service we offer for people that can delay a little bit of gratification. You know, if they're not quite ready to buy, we will put them on the path to home ownership and get to where they maybe in six months can get their family in a home.

Speaker 3:

Well, that's fantastic and I think we've really addressed, you know, those looking for a home, realtors, and so if we painted a picture of what this mobile home looks like, this is what you can have within your price range. So you have a beautiful new home, three-bedroom, two-bath, open-floor plan. You have an acre lot, maybe just a little bit smaller, so you're not enclosed in so many neighbors around you. So you've got room to grow. You've got some land, you have a nice driveway. You've got room to grow, you've got some land, you have a nice driveway. I mean to me. I think that will appeal to a lot of individuals and families.

Speaker 4:

Yes, and most of these are not right downtown, so they're more out in a little bit of a rural area and you know. But most people want that. They don't want to be right in the middle of town. So they're out a lot of times where they can shoot their guns, raise their chickens, whatever they want to do, because it is unrestricted most of the time.

Speaker 4:

But we do try to buy our lots in nice areas I mean, you know, if it's a real depressed looking area and you know Billy Bob's not taking care of his bubble home next door, we're not going to probably buy that lot. So we're going to try to buy things that are in a desirable location not on the side of a cliff, correct where they will have a nice three quarters to one acre of property.

Speaker 3:

And we've even got one that's two acres we're getting ready to start on, so we're excited about it yeah well, steve, thank you for um talking about landa homes and just sharing your why and the vision of where landa homes will be five years from now. I think it's exciting and, uh, I love the um. What's the why behind it is truly helping families and that's what you've always done here at Benchmark as a lender. You really look out for people and it's it's really. You know how does that person feel at the end of the day when they've done business with you, and those are the people that we know that's going to want their families, their children, their grandchildren to continue using Steve or Jonathan at Benchmark.

Speaker 4:

Yeah, it's a blessing and an honor, and I think what we do every day it's just. I've got the best job in the world and God has entrusted us to people's you know, with families making decisions on homes. So that's a really big responsibility for us and it's one we take very serious and we love it because we love looking after people and making sure they, you know, get the home of their dreams and also get a great deal on their mortgage, Absolutely.

Speaker 3:

All right, steve, thank you, thank you.

Speaker 1:

This has been Benchmark Happenings, brought to you by Jonathan Tipton and Steve Reed from Benchmark Home Loans. Jonathan and Steve are residential mortgage lenders. They do home loans in Northeast Tennessee and they're not only licensed in Tennessee but Florida, georgia, south Carolina and Virginia. We hope you've enjoyed the show. If you did make sure to like rate and review. Our passion is Northeast Tennessee, so if you have questions about mortgages, call us at 423-491-5405. And the website is wwwJonathanAndStevecom. Thanks for being with us and we'll see you next time on Benchmark Happenings.

People on this episode

Contributor

Christine Reed

Host
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Jonathan Tipton

Co-host
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Steve Reed

Co-host