Craig Evans, the owner of Douglas Brooke Homes, is a licensed Building Contractor in the State of Florida with nearly 30 years of construction experience including: Residential, Commercial and Municipal. A third generation builder, he has worked front line activities through management as a subcontractor, laborer, foreman, superintendent, project manager, midlevel manager, and executive management, truly learning the business from the ground up.
Craig has successfully grown multiple companies into quality brands by focusing on adding value to every facet of the project and not letting details go unnoticed.
He believes in teamwork and has put together a quality team in house as well as some of the most trusted trade partners in the industry to build Douglas Brooke Homes.
Narrator This is The Norris Group’s real estate investor radio show the award-winning show dedicated to thought leaders shaping the real estate industry and local experts revealing their insider tips to succeed in an ever -changing real estate market hosted by author, investor, and hard money lender, Bruce Norris.
Bruce Norris What was really interesting about that dynamic and Florida is that once again, you have do you know, what percentage on a normal year new versus existing homes? Would it be? 2080? Or…
Craig Evans I want to say that we’ll well, on a normal year…
Bruce Norris Yeah, normal year.
Craig Evans Normal year, not the last couple of years, but a normal year, you’re pretty close to 20%…
Bruce Norris Althroughout? Okay, so yeah, you can imagine so, the 80% side that supplies is not 80, if you’re talking about, let’s say, number of houses, if the normal supply was 20, from the builder and 80 from this side, this side is not tossing 80 out. I don’t even think it’s tossing 40 out. It’s tossing 25 out?
Craig Evans Yeah, that’s probably. Yeah. And that’s interesting that we’re talking about this, because that’s actually what I talked to my team about yesterday, and one of our meetings is, I wanted to see the stats to know, what is the amount of inventory coming on the market in relationship to what is the amount of inventory being sold, that’s new construction?
Bruce Norris There.
Craig Evans So, they’re, they’re shooting to have me that by middle of next week to have all those items lined out. S,o I’m anxious to see that once I get it, I’ll shoot it over to you.
Bruce Norris The new build percentage in California, which is, was historically terrible, usually, in a boom cycle, end of a boom cycle 150,000 new homes for 50 total sales. So a third, that’s it, that’s a normal end of the boom cycle. So, 2021, ’22 to 60,000, new homes constructed 400 and say 40,000, sales total. So it was only 15% of the whole market. Well, now you’re down to below 240,000 sales, and you’re building a 60,000 homes, and there’s no inventory, that there’s no no glut of inventory, pushing prices down very much. So, the this side is now maybe 70% of the market and going down. So, I get emails from the people that are flippers there. And sort of like what you were saying a few weeks ago, all of a sudden, it kicked in maybe the interest rates went down to where it was a five and change at the top or something. And all the guys sending me an email is going San Diego is just on fire. Everything’s multiple offers, and it kicked in because of you know, they didn’t have a lot of inventory. John Burns, you know, that name the guy that’s the consultant. Yeah, he just emailed me the same day and said, housing crash over? Basically, it’s cranked again. So, but I do think that existing inventory probably will have a hard time showing up unless there is a major pile of that homes that has to get sold. And that would mean you lost your job.
Craig Evans Well, so interestingly, I talked to three of my friends that don’t work for me that sell outside, you know, resell real estate. And one of them is this top producer for his firm. He’s closing on average, about 20 homes a month right now.
Bruce Norris Oh my gosh, wow.
Craig Evans He and his team do volume. But out of that, what he was able to tell me just last week, is a little over 85% of his sales that he’s creating, are generated because the homes the people are moving out of the area because they’ve transferred because of work.
Bruce Norris Right. That makes sense.
Craig Evans It’s not because they want to sell matter of fact, they’re, they’re frustrated and struggling because he said Craig, as I’m talking to them, they’re going into different markets and they’re buying stuff, they can’t buy anything for the value of what they had in their home. And as you said, you know, they he said most of them had taken advantage and reified somewhere in that two to three mark. And now they’re looking at at a seven rate.
Bruce Norris Yeah.
Craig Evans Is it you know, while while the the job shift is is outweighing that to a degree, they’re still frustrated because they’re like, man, we’re taking a beating by giving up our home in that process because we could win at a different market cycle.
Bruce Norris Right. No, no doubt about that. So yeah, that I think that’ll be a natural deterrent for how many homes come from have come from where most of the inventory that’s going to get sold comes from existing inventory.
Craig Evans Right.
Bruce Norris It would take a while for the builders to catch up and say, Oh, we’re going to double how many homes we build. That’s probably not an overnight thing.
Craig Evans Well, this goes back to even the question you asked a moment ago or a few moments ago about what’s the national’s doing? It’s interesting, because, you know, most of the national corporately are starting to ease back their construction. And then the amount of new starts, they’re doing. Even in Florida. You know, I’ve got friends in Jacksonville, that they are there, they build in seven states, they’re there. They’re a, I think, the top 20 builder in the country. They are, but they’re not in southwest Florida, they come down as far as Ocala. They’re pulling back dramatically, the amount of new starts that they’re doing. They’re pulling back the amount of new sales that they’re doing on pre sales in southwest Florida, because I got a small division here that they do. But it’s not because they’re not selling. It’s because they sold so much through these last two years. They still have a glut of material and product that they have to perform on, that they can’t perform on. Oh, wow. And that’s part of what happened with one of the large nationals here. It’s it’s the one of the top four builders in the country. They were, they knew they could perform about 100 to 110 houses a month is what their capabilities of putting out in this market were. There were months they were selling just shy of 300 a month.
Bruce Norris Oh, goodness, gracious.
Craig Evans So, they ran that for you know, they were running those things for 11 to 12, 13 months at a time to where they were hitting those numbers. And so they’re looking at the market saying, while yes, we can still sell, we’re doing ourselves a disservice because, we’ve got such a glut of things that we’ve got to perform on that we’ve already sold.
Bruce Norris At a price though probably that they wish they hadn’t.
Craig Evans Well, interestingly, most of those, you know, the the one builder had pricing structures in their contract that they’re able to change the the price and you know, the houses are still moving. So, if someone walks away from a contract, because I can’t afford the right now or something like that, we’re selling and we unfortunately, we had a buyer that due to when they went under contract, they could afford the price and the rate at that time, you know, we we did not have price escalations in our contracts. We for our, our retail buyers, we locked those rates, or we rocked those pricing, to try to give some assurance through that time. But obviously, that’s a retail price. It’s not, you know what we do with you. But in that we we actually lot we only lost one person, but that when it came time to rate was what knocked them out of it. But we sold that house in a matter of a week or so. But it’s interesting, you know, we just sold two on Saturday. I think I talked about that earlier that we got to I mean, it’s exactly the asking price, the terms we wanted. I think somebody needed a consent, one of them needed a concession on closing. And we ended up pricing up the term on that to help cover it. So, it was the market that we’re not seeing drops in our market from a price perspective. It’s a very stable market in this area right now because of lack of inventory.
Bruce Norris What’s interesting about how you feel about a market, when you come from euphoria, it impacts how you feel about normal, right? S, when you get done with a home a year ago, it’s available for 15 minutes and 11 people were giving you cash offers and you get used to that, that’s the new normal and then you go you know you list a house and 24 hours passes and you don’t hear anything you’re all bummed out.
Craig Evans You know when we go through a sales meeting every week and you’re saying wait a minute, we’ve still got a house on there this week that was there last week why why is that?
Joey Romero I know in the past Craig you’ve you’ve mentioned that you build homes for medical Middle America and you want people to be able to afford and to have the American Dream adding to the lack of inventory you know around the country has been these Wall Street REITs and hedge funds buying up all kinds of homes for BTR you know Bill to rent. Is that happening a lot in southwest Florida, Florida overall.
Craig Evans Oh, yeah, I would be I would be remiss if I said it was I mean there’s a lot of Wall Street coming in and looking because again, they recognize what’s going on in this marketplace. They recognize that there’s a need for housing here. And they’re coming in and buying. Now, some of the parameters are changing, you know they’re there are some things that they’re looking at. I’ve got a friend of mine that that we were my other company does some of the subcontracting work for them. Some of those terms of how they buy is changing. But yes, there are investment pools, Wall Street money, pe firms that are that are coming in very heavy and looking at this market and how this functions and what takes place in the market.
Bruce Norris I think, Joey, a lot of those funds are waiting for the REO glut to show up, isn’t going to happen.
Joey Romero They haven’t read your report?
Bruce Norris Well, we know that they’re not the best timing experts actually, that’s kind of funny, but they’re not.
Joey Romero Well, and that’s their more buying tracks, right, you know, what we do is scan a lot models. So, it’s, it’s a little different, is that correct?
Craig Evans You are correct in that, you know, we got with our scattered lot, most of the Wall Street money does not look at doesn’t like to look at scattered lot. Simply because for them, they’re looking at how does their management process work. And so, you know, obviously, with the partner that we’ve got in place down here with you guys, you know, through empire, they do a fantastic job of lease ups of management of that, and they do a lot of specializing in that scattered lot and open policy. So our open product rather so. So, that is that is definitely different from what what we do, compared to what Wall Street is typically looking for in tract product or you know, multifamily opportunities, things like that. Because obviously for them the management costs can change and, and the availability of how they manage is completely different.
Bruce Norris The demand for rental property how, how has that still been?
Craig Evans A matter of fact, I, I spoke with Empire and Joanna the other day, on the two that I’m looking put in, she’s expecting that she’ll have somebody in she will not just she’ll have tenants moved in inside of 14 days.
Bruce Norris Okay.
Craig Evans So, it’s it’s a little worse than the the eight days that she was a year ago, right?
Bruce Norris What is the price difference from a year ago? I’m just curious.
Craig Evans Exactly. We are one of them is a 1723 model will be I’ve got some in couple different locations, because I’ve got some in the Cape. And I’m actually starting to put some in Lehigh, because we were seeing a lot of different stuff happening there. A lot of people from Miami are starting to come over and move over. Because they can travel, you know, 55 minutes and be at work and they can live for you know, a whole lot less than what they can live in my Wow, never thought about that. So they’re they’re taking some of the back roads and coming in. So, there’s several areas of Lehi that, that we’re starting to build in and attacking that market. But you know, so depending on Cape Coral, or Lehigh, that that that 1723 model, a two car, four bedroom, not a three car but a two car with a four bedroom. Depending on Cape Coral, or Lehigh were anywhere around 26 to $2,800. A year ago, we were in the low twos.
Bruce Norris And a year before that you were in 1650.
Craig Evans Yep. 1650 to 1700 bucks.
Bruce Norris Yeah. I mean, that’s a that’s an incredible, and see that’s also supportive of the monthly payment. So, when we take a look at, wow, I gotta rent this for 27. What’s my, what’s my monthly nut at four or 350? Or something at seven? You know, that’s why I like practical decisions. So, I run those numbers and say, if I was that family, would I rent or buy if the number was the same? I would buy? It’s true.
Craig Evans Right.
Bruce Norris I want my name on the deed, I want to be able to have a pet and whatever else I want, you know, so I can understand that. So, I think the rent going up has actually been very stabilizing to the housing market.
Craig Evans Yes. It is. It is really had a play in that. It’s still interesting, though. And you and I’ve been talking about it. There are there are a lot of people and whenever we had three people that came into our showroom last week, talking to us do we have rentals? You know, so Douglas Brooke omes does not own rentals. You know, I have through my private equity firm that we own our rentals. You know, doubletrack homes doesn’t own them. And so you know my staff, there’s no Douglas Brooke Homes doesn’t do rentals, we talked to him for a few things. But obviously our, our job there is to sell homes. And all three of the people that were in specifically looking for rentals, they said, no, we, we just don’t want to own homes, well to deal with the maintenance. And interestingly, one of them had moved from up north. And they said, We don’t want to deal with that, if we’re moving here. When it gets to the weekend, we don’t want cut grass, we don’t want to deal with if my water heater goes out, if we want to when we’re done working, we want to go to the beach, or we want to go play we want were there. So, it’s interesting to see, as people are, you know, coming into this area, from other areas of the country that the migration is coming in, from out of state migration, they’re coming in not just for, you know, a home or a, you know, cost of living, but they’re coming for a lifestyle. You know, and I know, when we do our boot camps, we talk about that. But the lifestyle is a real thing here. You know, it’s, and so that’s it’s been interesting to see what’s going on with the rental market. Because people there’s a, there’s a large section of population that just don’t want to deal with maintenance.
Joey Romero So, what’s what’s the lifestyle that you participate in? What’s the stuff that Craig Evans, you know, likes to do on the weekends, and participate?
Craig Evans You guys know me, I’m a huge family man. Som I am all about my wife and my kids. So, you know, when we when we’re off, I mean, we’re doing stuff with our kids, we’re but like this Friday, there’s a thing in Fort Myers, which, interestingly enough, Fort Myers and I forget the publication, but it was just put out last week, Fort Myers was number two on the list for places in America to live that were safe, and, quote unquote, according to national demographics throughout the country, affordable. So, you know, but we’re like this Friday, we’re going down, and we’re doing what’s called Artwalk. And they shut down two blocks or two streets on the in the downtown of Fort Myers, they shut off. I mean, just part of the total of 10 blocks, there’s bands, there’s restaurants opening, there’s street vending, and it’s just a good time where everybody goes and hangs out. My kids are actually one of my daughter’s her high school band is the jazz band is playing down there this weekend. So, we’ll go and we’ll spend most of the day Saturday doing that, and we’ll watch her play. Pass that we go boating a lot. I love to boat. We do a lot of golf. You know, we play golf on the weekends. But there’s some great parks here. It’s just it’s a great place to live.
Bruce Norris Well, you and I we’re gonna get, we’re gonna have a conversation last night and I get this text. I have a concert. I got to go to at six o’clock. Because I call you in the morning. So, that’s what he’s doing.
Craig Evans That’s right. That’s right.
Joey Romero I didn’t I didn’t hear baseball. Let’s what’s going on? And spring training is all over southwest Florida.
Craig Evans Oh, it’s it’s all over the place down here. Yes. Let me know when you want to come and I know you’re a baseball fanatic.
Bruce Norris Yeah, I’ve got to do that one of these days. All right. Well, we are. Bruce, before we sign off sounds like you’re not gonna sign off.
Joey Romero Oh, yeah, I wanna I want our audience to hear something about the team that we have down there in Florida. You know, we kind of touched on it briefly, of what, you know, what we did when Hurricane Ian came in the stuff that you and Craig did, you know, jumping on the boat and helping people out. What we didn’t talk about, and what not a lot of people know is that Craig and his team, every day, almost twice a day, were giving us updates. And, and having all of us on their, you know, radar, like just didn’t seem like it should be right, because they had so much to worry about down there. You know, Craig’s talking about, you know, hey, I don’t have an update for you, ow, give me a couple hours, because I still can’t find one of my employees, you know, stuff like that. This stuff that he was doing with his church, and, you know, in inspired our investors to get involved, you know, Craig, you know, I don’t have a number because we weren’t keeping track, you know, we weren’t, we weren’t doing it to get the exactly at the end. But I know that a lot of our investors donated and sent things, you know, to the church that you were working with, because of the stuff that you were doing, you know, and I have to tell everybody that as soon as Craig and his team could and Joanna too Joanna, you know, they all went to every one of our properties, hundreds of homes, and visited them as soon as they could to assess and put our minds at ease 3000 miles across the country. And that’s the type of team that we have in Florida. And that goes a long way in that I gotta tell you, and if my voice is shaking a little bit, it’s because I’m emotional about it. You know, they didn’t have to do that. They could have said, Hey, buddy, like we got a lot to worry about here but no, we were able, I was able to give out every day, for about 10 days after the holiday, the hurricane. I was able to update every one of our employees, every one of our investors because of the stuff that Craig, Heather and Joanna were doing on that end.
Bruce Norris No, I’m just gonna say April. Go ahead. Very cool. Well…
Craig Evans Yeah. And Joey, I appreciate that. Because it was crazy. And, you know, Bruce, you saw a little bit of that. And, and I’ll say, listen to to the people that you that follow you, Bruce, and that follow what you do, and that are investors through the Norris Group are just, you know, follow what you do and listen to what you have to say. I know within the first, probably two and a half weeks, you know, I started getting calls from our church, saying, hey, who are these Norris Group people? That would come in with somebody’s name, you know, and it would say, attention, Craig Evans, the Norris Group, you know, and so they were asking me, who is this? Who is this? Who was this? There were pallets of items that were sent. I know, gift cards that were sent to us, you know, had amassed over about 10,000, a little over $10,000 of gift cards that were sent to us that we took and went. And, you know, my wife, you know, was like, hey, we got another $1,200 today and like, go buy some stuff and take it you start getting it out? You know, so yeah, it was a it was a huge blessing of being a part of that and seeing that transpire. You know, we had another group that put out a bunch of stuff as well, but it was it, was because let’s face it, Joey and Bruce gonna test I mean, coming up to that we were coming out of a year and a half of getting our, get our tails kick, you know, just one thing after another every week, labor this price increase this can’t get blocked for six more we I mean, it was just like a never ending barrage that felt like wasn’t ever going to end. You know, how do we go from building houses in the timeframe that we were to, you know, now we’re in a 12 month build cycle, what is I mean, it was it was the most uncomfortable and foreign thing to us. But to do that, and and to to see the outpouring from groups like you guys and a couple other people that we deal with. That was a huge, huge thing to see that, you know, but, I will also say this as a shameless plug. Our team has worked tirelessly. And I think over the next probably 60 to 75 days, you guys will be pleased with some of the things that are coming out, Joey, and I’ve talked a little bit about some of it, I don’t, I’m always hesitant to say this is what it is. But we’re we are seeing shifts in how our marketplace is starting to turn, especially from from build cycles, things like that. So, we’re getting very, very excited about what the next 90 days of our future looks like.
Bruce Norris That’s, that’s great. Well, we look forward to bring into you a group of I know, this is how it works. We have past attendees come to Florida boot camps multiple times. And then we have a new group that’ll come in that’s, that’s April 21 and 22nd, right?
Joey Romero Yes.
Bruce Norris All right.
Craig Evans Yeah, we’re looking forward to that. Now, fortunately, it was supposed to be originally the next week, but then we’ve got some concerts and things going on the next week, but I couldn’t go.
Bruce Norris Oh, I thought it was the opening of baseball season for Joey.
Joey Romero They’ll be gone by then. It’ll be real baseball season….
Bruce Norris All right. All right, Craig. Hey, thanks for, thanks for spending time with us today.
Craig Evans It’s been a pleasure, Bruce.
Narrator For more information on hard money, loans and upcoming events with The Norris Group, check out thenorrisgroup.com. For information on passive investing with trust deeds, visit tngtrustdeeds.com.
Aaron Norris The Norris Group originates and services loans in California and Florida under California DRE License 01219911, Florida Mortgage Lender License 1577, and NMLS License 1623669. For more information on hard money lending, go www.thenorrisgroup.com and click the Hard Money tab.