Housing Innovation Alliance's Podcast

Innovation + Growth in Homebuilding with Michael Thurman

December 02, 2020 Housing Innovation Alliance Season 1 Episode 14
Housing Innovation Alliance's Podcast
Innovation + Growth in Homebuilding with Michael Thurman
Show Notes Transcript

Michael Thurman, President of Thurman  Custom Homes , LLC talks with Dennis about their approach to homebuilding, the innovation happening in Austin at Whisper Valley and the importance of getting the next generation interested in building and creating...

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Speaker 1 (00:06):

You're listening to the Housing Innovation Alliance podcast in partnership with the university of Denver's Franklin L burns school of real estate and construction management. The housing innovation Alliance is a nationwide community of game changers driving the future of home delivery through crowd accelerated innovation. We represent thought leaders from dirt to dweller with a focus on the production builders business environment,

Speaker 2 (00:32):

Dennis Steigerwald president of housing innovation Alliance. And you're listening to our podcast series today. I'm joined by Michael Thurman, president of Thurman homes. How are you doing today, Michael? I am rolling Michael. Well, we had a chance to connect on a whisper Valley and talk about what you've been up to throughout your career. You know, there was a lot of exciting elements of your story and, and a lot that I think our community can benefit from hearing from, um, everything from, you know, kind of how you started out some of the infill projects you're working on and, and now where your business is going, uh, with, with the homes you're building out at a whisper Valley and how you're looking to scale. Can you, you want to just give us a little bit of background who's Michael Thurman and, and, you know, what's Michael Thurman builders all about.

Speaker 3 (01:07):

Yeah, so Thurman homes, Thurman custom homes, we've got two different little divisions there. One that focuses on our customer base. That's a, that's a custom client. And then our spec side of the business, which is what we're focused on out there and whisper Valley I've been in this business. You know, I, I say that I was born into it. My father, our father was a general contractor and a real estate agent. There was never a repair man around our house. It was, come on, go out to the garage, get the tools, let's fix it. So I was kind of born with that hammer in my hand. And that's, that's, what's brought me up through the industry. I've got a background in remodeling and flipping houses with my father back in the nineties. We we've slowly brought that up to where we're at today, which is, uh, building in very cool developments, like whisper Valley. I have a corporate background as well as a military background. So the construction industry suits me just fine.

Speaker 2 (01:54):

When you were establishing these, these two different, um, kind of intertwined brands within, within your building company, kind of, can you tell me what was most important to you?

Speaker 3 (02:04):

I mean, we do is kind of guided by what we like to call unique quality. So we want to have a unique product, uh, regardless of whether it's a custom or a spec home, we try not to get too far sucked into that nomenclature. Um, we'd like to call our product a niche, a niche product. We combined with my team of designer. I have a designer Camille and she, and I make every attempt that we can to bring every, make every house as unique as it possibly can be. We just finished 16 homes along one street as an example, and every one of those homes were painted a different color. So we really avoid the, um, we try to push the envelopes on those architectural control guidelines, let me put it that way. Um, and, and we're constantly, uh, looking at the quality that accompanies that uniqueness and quality for us allows us to walk at the end of the day. And, uh, I feel good about what we've built.

Speaker 2 (03:02):

What is it you hope to bring to the industry? What is it you hope to bring to these families?

Speaker 3 (03:06):

The ability to, to head out to an environment like home building and take a series of problems and address those problems usually very quickly. I mean, we're able to make decisions internally between my designers and myself to resolve customer issues, uh, to resolve construction issues, you know, to get that quality product that I mentioned at the end of the day to, um, be a part of a bigger community of building and doing that was one of the reasons why we picked whisper Valley. So we could be a part of something a little bit bigger than what we'd been doing and, and bring forth our philosophies to a little bit larger scale. And, uh, that's, that's what gets me out of bed in the morning,

Speaker 2 (03:55):

Been committed to sustainable building practices, um, looking at it at an advanced, uh, solution sets such as modular and really focusing on resilience and materials and construction over your career. So I'm kind of wondering if you could just share a little bit, you know, w w what was it that made you decide to make that commitment early on?

Speaker 3 (04:13):

It is through the various things that I've been involved in. I mentioned the military and my corporate background, as well as my upbringing. A lot of what I try to focus on with our business approach is a common sense approach. It makes common sense to a buyer to be able to save money on their utility bill. It makes common sense to a buyer to be environmentally friendly, intelligent, progressive. And so for us, the commitment to building a house that encompasses a lot of common sense elements of what the average buyer wants, and even our custom clients want it. It's really not a far-fetched for us to think about it. It's ingrained in everything that we do.

Speaker 2 (04:57):

Yeah, that's exciting. So let's, let's dig a little deeper into that. So you mentioned some common sense elements. You talked about the BMC ready frame solution. Um, there was some hints at sustainability there. What are some of the things that you're, you're doing either within your business or providing to consumers that you say, you know, follow the lines of this common sense approach?

Speaker 3 (05:15):

Sure. So waste is a big one. I mean, we are in the construction industry, guilty as charged for producing pretty good amount of waste. Um, we looked at the ready frame product this year, and we're bringing that on board, you know, a hundred percent we're on our second house. And the amount of waste from a lumper perspective that we've generated is it's negligible. It wouldn't even fill up a five yard dumpster right now, our goal is to not even fill up a dumpster with all of that, uh, excess material that's going to be left over, which again is going to be very, a very small amount

Speaker 2 (05:52):

On the common sense approach for consumers. So are we talking solar, renewable energy with solar? What, what types of solutions are you bringing to them that makes their life better adds to the bottom line of the operating cost of the home, those types of things.

Speaker 3 (06:03):

So everything we do from a sustainability, we try to keep in, in the current price model of what we do, what we've been doing over the years. So the ready frame doesn't add, if any costs, I don't see it. Um, so then you transfer all of those things like ready frame and the intelligent construction, and you start intertwining the sustainable things like solar, like geothermal, um, intelligent landscape design, all of those things combined that consumer, we are trying to bring to that consumer the same price model of product that has them on a day to day, month to month, year to year operating model, that is much, much less expensive. We are somewhere in the neighborhood of six to $800 per year is our goal right now for our homes that we'll be building out on whisper Valley. And that's electric, that's your air conditioning. That's, you know, that's everything

Speaker 2 (07:01):

Now in a, in a booming market like Austin, how do you, how do you keep up

Speaker 3 (07:08):

The way we treat our subs, the promptness with which we deal with them either through payment or through problems, um, addressing it, making sure that we accept any responsibility for our own screw ups. It's, it's how we deal with our trades. Most of my subcontractor base has been with us in excess of six to eight years. Some of them as long as 15. So we get a very respectful and prompt response when we request something out of our trades, because in turn, we try to do the same thing when they ask things of us. So we don't have any hesitation about our growth strategies or our growth capabilities in this hot housing market. As you mentioned, Austin is down below 1.5 on the less available on market right now. So the demand is there, but we have to continue to take care of our subcontractors. And, uh, and we've been doing that for 17 years. So our, our growth capabilities are strong.

Speaker 2 (08:11):

You want to share anything about your, your growth plans? Are you looking to really scale up Michael Thurman homes over the next few years from a production building perspective and move away from the custom side and grow both sides of the business? What are you thinking?

Speaker 3 (08:23):

Uh, we're thinking all of the above both sides of the business. So we, uh, oftentimes have customers come to us that like our product, but don't necessarily want to live in a subdivision. So we end up as a result, um, with some custom buyers in that equation, in terms of whisper Valley in wrapping up, we are very cautious to try to steer away from that production term. We will be building a lot of houses. Let's, let's say that I don't, um, what that volume looks like, but I can tell you that conservatively, our estimates for 2021 are somewhere in the range of 25 to 40. Um, and some of that will just be dictated on land availability. You hear it across the country right now that that lots are at a premium in terms of just getting them. Um, Doug is doing a good job of getting, you know, trying to get those ready for us so that we have a continued supply out in front of us. If that continues to be the case, then we will ramp up to meet that demand. Um, but I don't want to wrap up in a, in a way that sacrifices, some of our core values, which I said, like I said, is that unique design element. We want our product to stand out in these subdivisions and, uh, and we want them to be quality. And that's, those are the two paramount issues for us.

Speaker 2 (09:49):

Now, a lot of your work today is site bill, correct?

Speaker 3 (09:52):

It is. So we, throughout the process of construction, Michael Thurman started off in remodeling. We did modular in the late two thousands. So 2005 to 2010, we did, uh, we shifted over to a modular, uh, configuration. We built coastal homes that were modular, um, in-field projects here in town that were modular. And at the time that product, the modular element was a very good product. Uh, the part that that pulled me away from it, uh, was that unique design element capability that is somewhat limited when you are building in a factory and you can only get that box built so many ways before you ended up doing so much work on site to make it unique. And we found that when we started to try to bring the originality to each of our homes, that it was becoming cost prohibitive from a modular perspective to do that when we could start off from scratch with that unique product and just build it on site. So we transitioned over to site built at that time, uh, in 2012. And that's what we'd been doing ever since. Um, we are a seven time modern homes tour, uh, participant and title sponsor, look forward to the, the pandemic coming to an answer. We can crank those back up if not in 2021, but definitely I would think in 2022. And, uh, we hope to be able to engage this for Valley in that conversation and actually have the tour make its way out there.

Speaker 2 (11:30):

All right. Great. And one of the reasons I, I asked that question, um, and one of the reinforced kind of some of the things that you've done in the past and w w how you're building today, you know, as you look to grow the business, are you starting to evaluate, um, alternative building methodologies and materials?

Speaker 3 (11:45):

We are, um, the, the ICF play is something that we are looking at. Um, I not tell you that I am an expert on, on my alternatives just yet. Um, but the ICF, um, component or the, the block material that is used, um, where you are filling it up with concrete, and it's providing both structural and installation value, we're, we're dipping our toe into the investigation, investigative waters of that. Um, as well as steel framing, steel studs, we are looking at that. I wouldn't tell you if we'll get to either one of those. Um, but those are both definitely more sustainable. Um, and we'll just have to assess them from a cost perspective, uh, relative to our current designs and what we can, how we can modify our, our, our designs to work in with those materials

Speaker 2 (12:41):

Right on. So great, great story that we covered here. What I would like to share with our community here, our audience audiences kind of better understanding. So where you sit today and as you look out at the industry over the next three, five, seven years, is there any call to action? You have some things that you see other, you know, you've identified a couple of points we need that we need to be building, right. We need to use common sense, reduce waste, you know, so those are a couple of great ones. Is there anything else you'd like to leave our audience with? Um, it's kind of a call to action over the, you know, the short to mid term

Speaker 3 (13:13):

Kids into it. The industry as a whole is in a deficit of qualified personnel in all arenas, all arenas of construction and building, not every kid's going to go to college. Not every kid is going to be a code writer. And even if they are, this is still an introductory, getting them involved early in the ability to build something, create something, um, screw something up because let's face it. We do getting them involved in that arena. Mike, my son is out as often as I can get him out there. And the industry really needs that young blood in it to again, use that word sustainable for us to be sustainable. I mean, there's only so many old guys that are going to be able to continue this tradition on, right. And building's been around forever. So it's not just the innovation, but it's the dedication to the building industry that we really need to foster.

Speaker 3 (14:10):

And in the younger generation to say, Hey, this is a cool place, guys. You want to go climb in your truck and go drive around and look at stuff. Instead of sitting in an office, this is the job to do it. So, um, that's that, that really is my, my long-term goal and remains to be seen if my son will agree with me or not, but, and just, you know, our shorter term goals are just trying to lead by example, that things can be done a little bit cleaner, a little bit better. My job sites stayed pretty tight. Needy. Our product stays pretty tight, neat. And, uh, we like to see how we can push that envelope in terms of being just clean as a builder on the block and how well we can be doing what we're doing. And just tried to do that with

Speaker 1 (14:52):

Leading by example. So we'll, we'll see if anybody,

Speaker 2 (14:55):

But Michael really appreciate your time today. This has been a great story that you shared with us. We'll look forward to checking back in with you as you continue to progress in a whisper Valley.

Speaker 1 (15:04):

My pleasure. Good talking to you on behalf of the housing innovation Alliance and the university of Denver. This is Dr. Eric Holt. Thank you for being part of our journey. This is where innovation calls home.