Updated 1.1.25

 

Okay. First on Brady’s question, you know, as a home builder coach, I definitely have people who regularly ask me the question of like, what is what should the timeline be? Because I have some builders that have crazy timelines that don’t make any logical sense. And a lot of times they’ll say, well, what should my timeline be? And if I’m coaching them, I’m going to give them the timeline that I’ve just experienced from, you know, when you build 400 plus houses a year.

 

Your timeline needs to go smoothly. You don’t want it to be causing you extra time, right? Because for the builder, you want it to go as fast as possible. Time is money, right? Every day that they start on their home and it’s not closed. They’re paying interest that comes out of their bottom line, out of their, you know, net profitability.

 

So think of it this way. If I build Brady, let’s say a home builder coach builds the amethyst. Okay. Your amethyst floor plan and it takes me I do a really efficient job of it. And I get done in four months. As the builder, I’ve already factored in an amount of interest that I’m going to pay on that construction loan while I’m building it, waiting for the client to close in.

 

My factor might be 120 days of interest right now. If, it takes me six months to build it instead of four months, what happens to my net profit? I’ve got two more months of interest that I’m paying, and I only budgeted for four months of interest. Right. So now two months of interest on a finished house. You know, a nearly finished house might be $7,000.

 

Several thousand dollars. You know, it might be four grand. That comes out of the net profit of the builder. Right? So that’s a bad thing that literally comes right out of your bottom line. So for the builder, they want the timeline to go quickly and smoothly. So like here’s the events that should happen right. The contract with all finishes selected.

 

What happens if I don’t have all finishes selected? Well, I don’t get all the time. Home builder coach might get to a place where I get to the point of it’s time to install the cabinets, and I don’t have the cabinets yet because there’s a six week preorder time frame or an 8 or 12 week pre order time frame for the cabinets.

 

And now I’m sitting here stalled for four weeks because 12 weeks ago they stalled me three weeks finishing their selections. Does that make sense? So that’s three more weeks of interest at the Builder pays. And then I like to do that. So a lot of builders when I first meet them they don’t have a timeline like this. So what ends up happening is they have they are making the customer select the thing right when they need it.

 

They’re like, hey, we’re going to install lights next week. Could you go to the lighting store and figure out what you want to put in the house? Or they’re like, hey, we’re going to install counter countertops in a week. Can you go to the countertop store and pick your countertop and tell me what you want me? Most builders, when home builder coach first meet them before I start coaching them.

 

That’s what they’re doing. And both of you guys included, actually, so that that’s kind of a little bit of a crazy process, because now I know, though, my costs upfront, I really can’t tell the customer exactly what it costs either. So and it slows down my process. So you guys write the contract with all finishes selected up front, right.

 

This is what you want to do to have an efficient build. Then the next thing that happens is the contract goes to a different person so they can see it and make sure there are no errors if at all possible. So that’s part of your process. Then we order the, construction loan from the bank. So McKenzie does this for you, Brady.

 

And, I think Leah does this for you. Ty. So they order the construction loan from the bank. They literally. They send the contract with the customers approval letter over to the bank, to their person at the bank, and they say, hey, this is the next home we’re going to build. Can you get this ball rolling? Okay. Stop me if you have any questions as I’m going.

 

Otherwise, home builder coach willl just keep going. Then that same person. So we’ll say,

 

This is done by your admin person. This is done by your admin person.

 

This is done by the sales person. And then the admin then sends the The. Oh, well, sorry. Let me back up. CAD is notified to draw the plans. And create a site plan. Right. So what they do is that goes to us when you guys click done and the the admin clicks. This contract is good.

 

Everything is good on this contract. Then what happens is it triggers an event in your software that tells the person to draw the site plan. Which do you guys know what the site plan is?

 

Yeah, that’s where the house footprint is outlined inside the building envelope on the site. Right. So that’s drawn. And then the plans for that particular customer. So when you guys pick stuff, the the customer selections are adding into okay, okay. Are adding into, the CAD plans. And so those get drawn and then the admin takes the plans and sends them to the city building department.

 

And they.

 

Fill out a form for the permit. For the building permit. So that’s what happens next. Is this what you were asking for in my answering the question you have? Yes. Okay, so they they fill out the form for the building permit. Next. Right. That process, the city, you know, is usually.

 

Four weeks to get a building permit. The period of time for,

 

For getting a construction loan, usually four weeks. So the building permit. This is important. The building permit and the construction loan. We can’t start the home without those two things. Those two things usually both get done about the same time. Usually the construction loan is closed at the bank in the name of the builder. Right. And the building permit usually comes in on the same day.

 

That usually happens kind of simultaneously. And then the next thing that happens is this triggers.

 

For the excavator.

 

To come get the build site ready.

 

Now in that process have we already ordered materials? Yes. Okay. We started ordering materials literally. Okay. So right here.

 

When Mackenzie for you when your admin gets the contract and goes through it and there’s no errors, they do a thing called ratifying.

 

The contract. That’s what happens at that point. That is a process in the software that they ratify the contract. So the very moment that they ratify the contract, that’s when the clock starts ticking. So that’s when all the events begin to happen.

 

Right. So building permit, CAD construction loan ordering materials, all of those things begin the on the schedule for your excavator the day that Mackenzie ratifies the contract. All of the building trades from beginning of construction to the very end of construction. All the guys who do the work, the building trades, all the guys who are suppliers, who supply the materials, the lumber for your framing, the lumber for your, finished carpentry, the carpeting, the drywall, the shingles, all of those things basically drop into a schedule that they can all see.

 

So if you if we ratified a contract for a build today, the guy who’s supposed to put the doorbell on at the very end has been notified. Hey, four months from now, here’s the date you’re going to install that doorbell. The guy who’s supposed to order the shingles, which aren’t going to come for another, you know, 60, 70 days.

 

Those shingles. The order has been placed. The framing lumber. The order has been placed. And we’ve told him what day to drop it on the day you ratified the contract. As a home builder coach I see that most things are ordered way, way, way in advance.