3D Printed Homes Pros & Cons
Today we will discuss 3d printed homes. What are they? How can they shift the real estate industry and tips for how you can be prepared for this new wave that could potentially solve the housing shortage in the United States?
Unknown Speaker 0:00
Hey everyone, welcome to the analytics aerial channel. It's your host, Ariel Herrera, your fellow data scientist that bridges the gap between real estate and technology. And today we have a special returning guest, Matt Hawkins, the landlord of over 100 plus units, and the creator of the lumberjack landlord YouTube channel. Today we will discuss 3d printed homes. What are they? How can they shift the real estate industry and tips for how you can be prepared for this new wave that could potentially solve the housing shortage in the United States? All right, let's get started.
Unknown Speaker 0:44
Hey, Matt, welcome to the analytics area channel. Super excited to have you here. Super pumped to be here. I'm glad to be back after my long hiatus. Thank you for having me back. I'm super pumped to be here. So ready to answer any and all questions, um, self managing landlord 43 buildings, 124 units now?
Unknown Speaker 1:06
Yes, we've gotten a little a little bit bigger over the last year or so. But yeah, we'd love to spend some time with you and with your viewers and share with them what I know about 3d homes perfect. And just before we touch on 3d homes, I did just want to call a shout out. Really appreciate all the content you've been putting out there, especially diving into data for fair housing rent. As of recently, though, that was really awesome. So definitely to the audience, check that out. I appreciate that very much. It was tough holding a candle to analytics Aereo. And I started doing something data based, you know, where it's not just this is what I'm experiencing in my market. But yeah, I think the numbers are crazy. And I think it's going to really upset the market a lot. We talked about that on my live stream for about two hours on Sunday, just the fact that a lot of people that aren't on Section eight home programs and vouchers, they don't have any competition, except for other people that aren't on those programs. But now that those programs are going to be priced at pretty close to market, you now just introduced a whole new market of competition for that same class of unit, it's going to be challenging for sure. Definitely. That's about 10% increase, right year over year. Yeah, so it was a 10% increase. It was a 10% increase year over year, it was 10% last year as well. But most of the local home housing authorities are doing another 10% override, which they have to get approval for. But most of them are getting that approval because they don't have nearly enough units. You know, there are hundreds if I had 200 units tomorrow, I could have them rented the second day.
Unknown Speaker 2:48
The challenge is, is that currently they pay a little bit less. And So therein lies the challenge is that they pay, you know, right, it had been significantly not less. Now it's only a tiny, tiny bit less. So it makes it much more doable. Because the numbers, the numbers can be lower, and you can still you know, make the make the money that you need to in order to rent out the unit and actually clear income. Gotcha. Yeah, yeah, really interesting shifts that are occurring. And now jumping into the chef's for 3d printed homes. One of the reasons that I found this space interesting. Over the last few years, I feel like there's been so much technology shifts, including like, you know, virtual homes, tours for real estate agents, drones being used by insurance companies. And then what really fascinated me was 3d printed homes, because the idea that it could really help with the housing shortage that we have in the US. But full disclosure, as I was reading these articles, some of them I was able to digest, and some of them in a little bit over my head.
Unknown Speaker 3:53
So if we could just start, maybe from a simple definition of what is a 3d printer at home, and maybe we could walk through how you think it could benefit the real estate industry? Yeah, so really a 3d printed home, most of them are made of some sort of cement slurry. And that means that it has different components, believe it or not, people that don't know there's all different so cement isn't just cement. Cement is mixed with a bunch of other things. And so they are they have different additives that they can bring into that. Some companies have a proprietary slurry, and other companies don't. But the core of it is it's really basically the ability to instead of using a foundation only in the ground and then building sticks on top of it, which is traditionally what's done. From a residential perspective. It's actually building typically it's something that's on a slab is usually the is usually what I've seen so far, but it's typically something that's slab work. And then it is basically a head
Unknown Speaker 5:00
That actually is on some level of a machine or conveyor, that allows that cement slurry to go through a mixer into a pump, and then literally print it. Based on the design that was put into the software.
Unknown Speaker 5:17
There's a number of companies. So I've been researching that for about three years now, I started talking to companies about two years ago about their technologies. And then you know, what really is the best fit for their technologies. And so all of these companies by no means are created equal. Okay. And so there's a number of these companies in the US, but also outside the US. And there's been a number of these projects being done, obviously, low income for, you know, continents like Africa,
Unknown Speaker 5:48
where a lot of people have done work there. But there's also much larger development in the, in Europe, there's been a number of these companies that have been building stuff in Europe. And really, the argument here is, you know, there's kind of three or four companies kind of fighting over what we did it first, here, and it really depends on what you describe as first being but yeah, there's a few US companies, I've spoken with all of them. And yeah, we can talk machine prices, we can talk models, all that stuff. But it's a very interesting concept, don't believe what you're seeing online about a costing six or $8,000 for a house because it doesn't cost that's nowhere near that. What we're, what we're seeing so far is about it's a, it's usually about a 20 to 30%, or excuse me, 10 to 20% reduction over building a conventional stick build house. Got it. And it's also a lot less labor being used, right? Yep, that's the big thing is it's just much less labor, because the cement material to the wood, the
Unknown Speaker 6:52
you still have to have all the same wiring, you still have to have all of the same insulation.
Unknown Speaker 6:58
A lot of the roofs that are put on our pre built rooms or rooms that are built then in place, we were looking at both options, one, which was basically having all the roofs built somewhere off site, and then having them brought in on a on a back on a truck wide load. And then having them assembled on top of the house with the crane, as well as potentially building them in place. So we looked at kind of both of those models. But
Unknown Speaker 7:24
you've got a lot of really expensive wood shingles and underlayment in those rooms. And so yeah, typically what I've seen is from a completed home, it's 10 to 20% reduction over normal costs, but much faster, much faster. And what does that time to build look like? Usually you can have the pad, and then the building itself done in anywhere from three to four days. It's really fast. Yeah. And the reason that it's so fast is because, you know, with one of the companies, I believe it was, I believe it was icon technologies, they're based out of Texas, they've got what I believe is the coalition machine. You know, for those guys who want to flex with a Lamborghini, I want to flex 3d printer, I want to flex with Lamborghini, too, but I also want to flex to the 3d printer. And so what's really cool about that 3d printer that iKON makes is it's actually on wheels, okay, so because it's on wheels, the terrain matters less. The setup time matters much less. Because with pretty much all the other solutions, whether it's SQ four D, or cyba, or any of these other cocobod. Any of these other organizations or companies, the solutions that they currently have available in the market that I've seen, are stationary, ie you set up pillars, and then you set up the scaffolding on those pillars, and then then it's able to set up the track for the head. So it's a combination software, hardware implementation, and how large are these 3d printers that can build homes? Yeah, so the icon one, I want to see the icon one is 24 feet across or 28 feet across. Yeah, and with the, with the covad Sq 40 Those go those go pretty much as large as you want. What you're actually paying for with that machine is you're paying for the number of sections that you want based on the size house that you want.
Unknown Speaker 9:28
When I talked to them about you know, one of the projects that we're
Unknown Speaker 9:32
endeavoring to do is small single families. So we want to get that instead of people only having the option of a one bedroom, a one bedroom apartment, we want to offer one bedroom homes.
Unknown Speaker 9:46
So if we can offer one bedroom homes, it really gives people a starter home and something that they can buy into or rent and then move out of and get to a two bedroom or three bedroom, a four bedroom etc. The challenge that we had is that a few
Unknown Speaker 10:00
Other manufacturers said, That's too small for us. That's too small. It's not going to be an efficient use of our equipment and how it works and how it operates. We want we we built it to manage bigger homes. Really? Yep, I just assumed that it would have been like, I don't know, 350 to 600 square feet. Exactly. That's what I was like, this should be like everyone's wheelhouse. Yeah, the place that we saw. So SIBO was pretty good with those smaller homes.
Unknown Speaker 10:30
And I can't icon is kind of the perfect fit, but icon is not icon different, took a different track icon took a track where they didn't want to sell their machines to people like me, they took a track where they decided to contract with the government. So they are they are building housing for the government. One of the interesting things was, you know, the quickly the thing that was challenged was most of these printed homes are only one floor. So what you're finding now is hybrids, you're finding that they're building the first floor all with printed, and then the second floor is stick bill. Oh, wow. So that's now that's now kind of the approach some of these guys are taking, which is we can get this underway very, very fast, get everything put into place that we need to put into place, and then just plop another unit right on top of it. And it's still a single family home. But it's being done with wood on the second floor. But you can build that off site as well and kind of pop that on manufactured if you'd like. Very interesting. And then these homes also have like the same type of plumbing that we have. Okay, let's go. Yeah, yeah. All that's been the biggest challenge is, I've worked with a number of towns local to me.
Unknown Speaker 11:42
And we want affordable housing Lumberjack, we have to have it. Yeah, I want to give it to you. Where can I build it? Not there?
Unknown Speaker 11:52
How about? Nope, not there either. What about this spot? Nope. Like, you're gonna have to pick a spot. Yeah, you got to pick one. So the biggest challenges right now is I feel like there's a lot of people talking to the both sides in our mouth. We want affordable housing, I'm ready to spend the money. I did not even ask me for any government money. I don't want any funding whatsoever, I will do it myself.
Unknown Speaker 12:14
But I still got to have the place to build it. And the biggest problem where I am is the density isn't there. So, you know, real brief example that I think will help folks from a math side of things I bought, I was looking to buy a piece of land. It had 10 watts on it. The 10 lots that it had on it. We're all we're all approved for four bedroom homes. And so I'll ask a silly question. What goes in bedrooms and four bedroom homes? That's it. Yes. Kids? Yeah.
Unknown Speaker 12:46
And so the issue is, is that you've got parents in one room, you've got three kids in the other rooms. So I said to them, you effectively have 10 homes, times three bedrooms, you have 30 kids in that neighborhood. Right? The cost in that town to send those kids to school is $12,000 per child. Wow. I said, so just doing math. And I know that counties and towns are usually against that. You're looking at $360,000 for the annual bill. For those kids just go into the school system. Forget about anything else, just the schools. Well, you're nowhere near that for taxes on those homes taxes on those homes in my state, which is one of the highest in the country, because we don't have an income tax, we don't have a sales tax. Because of that our property taxes are very high. So the property tax on that brand new build was gonna be about $12,000. I said, So your net negative 24 grand every single year on all of those homes. I said I have a solution. And I'm not going to ask you for any money. All you have to do is allow me instead of building 10, four bedroom homes,
Unknown Speaker 13:57
give me better density and let me build
Unknown Speaker 14:01
41 or 31 bedroom homes or Yeah, 41 bedroom homes, which sounds logical based off of what you just walked through.
Unknown Speaker 14:10
Right? I love math. We love math. And so they said no. And I said, You are you are opening yourself up to a bill that will never go away. Yeah, because your taxes will never keep up with the cost of the kids in those schools. It is going to cost the best that town could ever hope for is basically a quarter million dollar loss every single year in one neighborhood.
Unknown Speaker 14:39
I said I can turn that around. I said instead, those taxes for that same area. That would be $120,000. You'd probably charge me a little more let's call it 180 That 180 would be 100%. Net because those are all be single. They would all be one bedroom homes. And would you expect that to be more like
Unknown Speaker 15:00
For
Unknown Speaker 15:01
people who are 55 enough, or was there like a target market that you have for those, the target market was not 55 enough? Because I think that there's a lot of housing that's targeted at 55. And up. Yeah, I think the biggest issue is that there's not really anything targeted. Why can't we have entry level housing? Right? Why are we so diametrically opposed to this as a society, we have special housing with special rules for 55. And over now give me special housing with special rules for people that don't have kids. Yeah, I have kids above my kids. But at the same time, too, we created a pocket for 55. And plus, let's create a pocket for the under 30. Or people with no kids, I don't care about the age range I care only about, we recognize that we can price these at what we price them for, because there's not going to be that economic impact on it. On the on the schools and on the all the other systems, what we need is little communities like this, where it's people in their 20s and their 30s know, kids that are pouring money into the community and spending money in the community, then they're likely to put roots down there, and then they're likely to be buying their next home there. That was the that was the presentation that I gave a couple of board members in a couple of the towns that I do business in. They seemed underwhelmed. I thought it was well articulated. But I believe so too. Do you think it's just more so things taking time have?
Unknown Speaker 16:30
I ideas? Yeah, I think that they don't feel the pain of not being able to buy a home. I think they don't feel enough of that pain. And they think for me, I have renters and my most proud moments are when renters say, Yeah, we're buying a house. Awesome. Awesome. Yeah, that's a reason why we don't keep our rents, breaking the breaking the barrier on our rents with as far as high volume goes, We're reasonable with our rents. We're not always trying to chase after the last dollar. So it's really interesting to me as in going through that process. Yeah, it was kind of shocking to me, it was kind of like, can't build here. cabled here. We love the presentation. Yeah. Well, we want affordable housing. And so yeah, but none of those places you can go, right. And you're like, I want to do things that are somewhat closer to downtown because that's walkable. Then people jump on their scooters and electric bikes there even even heaven forbid, a normal bike,
Unknown Speaker 17:24
or maybe even a skateboard or whatever. But jump on there and head down. I mean, there's plenty of 20 and 30 Somethings that still ride skateboards, but make it accessible like that to them. And then that money that they make, they will pour that back into the local community and the kids are the biggest stress on a local community. I never realized that actually. So I'm glad you bring that down. Yeah.
Unknown Speaker 17:46
Yeah, I mean, that's, it's, it's just crazy to see. So hopefully, in you know, we start getting some, I can't buy the machine until I know I can build somewhere, right? What I found with most of these guys is it is typically
Unknown Speaker 18:03
four to six months to get the machine even after you order it. And when you order it, it is going to light in your pocket about on the cheap side, about five to 600k. Okay, that's pretty hefty around 400. But yes, five, 600 is more accurate, I have 605 or 600 is more reasonable. You can get at 400 You're not getting everything you need. And you also need like replaceable heads. There's a lot that goes with it. There's a lot and a lot of conveyor and chain and conveyor pieces, you know, around the moving parts. There's stuff, it's construction, there's stuff that's gonna break, there's stuff that you're gonna need. So, yeah, five to 600 was I was what I saw for kind of the entry level. Okay, and then if you're going up to like the big boy machines, like some of the big SQ 40 machines.
Unknown Speaker 18:58
I don't know about cobalt, I didn't do a ton of work on them. icon now you're talking a seven figure machine. Wow. And six, eight months? Yeah, and six to eight months before you get them? Yeah. So if you figure that, you know, the cost of building a typical, you know, small family home, like just a single floor home, because that's all you're building. It's gonna save you 10% or so, you know, maybe 20. But on the builder side, it's probably closer to 10
Unknown Speaker 19:27
how much you're able to pay for that, like you're gonna You better be doing a pretty big development if you're going to pay for that sheet and in any sort of timeframe.
Unknown Speaker 19:37
You're What's that return on capital, right? Going on to that piece that you just mentioned of like how there's going to be maintenance needs to be done. One thing I heard in a podcast was
Unknown Speaker 19:48
not only like creating 3d printed homes, but having a 3d printed printer being normal to have in your house where if you need to change out a doorknob, instead of going to Home Depot you like download a file
Unknown Speaker 20:00
Your door no door knob is made right there for you. Have you heard of this? And do you think this will like actually take?
Unknown Speaker 20:08
Like, I think it can? I think it can I think that the challenge that there is right now is the cost of 3d printing is believe it or not too high over what I'm getting my doorknobs for, right? And I think that the thing that scares me too is you can actually take a picture of a key and print it, and it works in the doorknob.
Unknown Speaker 20:30
Okay, that's a little scary to me. Yeah. You know, it's kind of like,
Unknown Speaker 20:35
I mean, now you have to worry about your keys being on the bar, or your keys being on the table or something like that. And literally, somebody's just, you know, taking a snapshot of your of that and following you home. Yeah, and you know, they have access anytime they want, and it's not gonna be breaking anything, they're gonna be able to go in with just the key.
Unknown Speaker 20:51
Don't love that. So I'm a huge fan of these Quick Set locks. These are completely 100% digital locks. That's one of the products that's kind of part of our, you know, landlord review series that we do. But love those locks. We use them in every property, we have them on at least two doors, if not three doors, if the property has three exterior doors, but things like that, that's the better technology, I also don't want to be on anything that's not air gapped. I don't want to be on a Wi Fi Nest thermostat. I don't want to be on a Wi Fi door lock that you're screwed. Yeah, I mean, the whole thing that we found is, you know, like Xcel Energy about a week ago, with what they did. They basically everybody that had a Wi Fi enabled thermostat, they actually didn't allow you to go past a certain degree level, because they were essentially browning out, folks. Really? Yeah, yeah, it's all over the internet. It was something that I caught probably in the first couple hours, because that's one of the things that we liked making our apartment smart apartments, but because they're 100 year old homes, we have to retrofit. Right. But I've always been very skeptical, the Wi Fi idea will leave the super Alexa and powered run home with everything Wi Fi, nothing. air gapped. I think the you know, the cyber side of things is become so much more aggressive, that I think that it's going to be something that's very going to be very commonplace, people are going to start getting into those home private networks and hacking and being able to get into those locks. And so a physical lock guy that's been around since the dawn of time these I liked them because they're not air, they're air gapped, so you can't get to him through via Wi Fi, you actually have to show up touch the pad. And so from that perspective, I like it, there's really no access points to the pad because this is pure stainless block, right? So there's no access point to the pad room smashing it. And that's not going to get you in.
Unknown Speaker 22:54
Exactly I have the same because I originally did an August lock, which was all Wi Fi. Yep. And then once the power goes out, you know, you can't even like get in. It's like a hole to go through the backdoor. It's a mess. So I completely agree with that. And if you could expand a little bit more as we close out, like what is your landlord series? And then how do people find you and learn more about it? Sure, on the lumberjack landlord series, so I'm a self managing landlord again, have you know, over 100 and 124 units right now 43 buildings, so we self manage, and we have products that we've deployed in the field and I, I will spend all the money to find the garbage products just to find that one great product. And then when I find that great product, and we've had it in use in the field for a year, two years, etc, then we'll talk about it. But not until then I get sponsorship offers all the time. And I'm like nope, haven't used your product and I'm not taking somebody else's word for it. So everything that we recommend we actually use and so I do a landlord series where it just covers here's the products that we use, and we have specials where it's like if you want to try and get that higher amount for rent, here's like $1,000 package and we provide all the links to all the products that we use right there in the description of the video. So if you like something, click on the link you can get it right off of Amazon and we also have done the shopping to make sure you get the cheapest one.
Unknown Speaker 24:16
Excellent. Thank you so much for sharing that really appreciate your time. Absolutely. Thank you so much area
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