Bruce Norris is joined by Craig Evans. 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, mid level 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. Bruce and Craig talk about block construction in Florida, Florida building code and how he got started in the business.
- Who is Douglas Brooke Homes
- How did Craig get started in the business
- Why did TNG partner with Douglas Brooke Homes
- The importance of block construction in Florida
- New Florida Boot Camp
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 Thanks for joining us. My name is Bruce Norris. Today our special guest is Craig Evans. Craig is the owner of Douglas Brooke Homes is licensed building contract in the state of Florida with nearly 30 years of construction experience, including residential, commercial and municipal. A third generation builder he has worked from the line activities to management as a subcontractor, labor foreman superintendent, project manager mid level 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 that project and not letting details go unnoticed through The reason we’re interviewing Craig is that he’s the building partner for us and we’re going to have our new Florida bootcamp coming
Joey Romero September 11 and 12th.
Bruce Norris Okay,
Joey Romero Southwest Florida, Fort Myers.
Bruce Norris So Craig, we welcome you to our radio show into our investment group. Thank you, thank you for having me this one verse. When I read your description, it reminds me of my my son, Greg, he had helped me start fixing homes that probably age 12. And ever since then, I’ve been involved in the contracting business one way or the other. And, and that is a that is a great way to learn what was what was your first exposure to the contracting business? Was your dad your grandfather?
Craig Evans Well, yeah, so like I said, I’m a third generation and what we do and my, my grandfather, you know, in his career was a lot of large municipal stuff in a bridges and roadways and airports. And like that. And then my other was in commercial construction and built a lot of a lot of the high rise buildings up in, you know, 3040 storey buildings up in Cleveland, Ohio and Chicago up on the Great Lakes and then for I was born he had moved to Georgia and started started in residential construction. So I literally grew up, you know, afternoons and weekends you know, I would be going around with him the jobsite and playing on a on a plans table while he was inspecting and checking over some jobs and so I grew up as a young boy on job sites and that was that was really where I think my teeth into wood into this industry that we’re in. I think that’s really important. And I know Greg is just got an instinct about things and it part of it is he just been exposed to it for so long. And it’s a big help he had. He kind of took over a track and 93 houses we built in California to him it was a piece of cake and to me it was overwhelming because he had I just had done so much of it. You know, when I was 15 going to stick my dad wanted to really teach me from a master carpenter process. And so he had one of his superintendents said, Hey, listen, I want to build a workshop out behind our house. And I want you and Craig to build this. It’s a two story workshop and I wanted all the mortise and tenon. Of course, at that time, I didn’t realize that that meant no nails that no screws, that means everything is, you know, knots and pay it but it really taught me and gave me that bag of tricks of really understanding how to really build something that lasts and build build us a especially from a structural component, you know, especially with where we’re at structure is so key really created an interest in what I do to really see how things are made, you know,
Bruce Norris You could help the Amish do their their structures.
Craig Evans So interestingly, we my wife and I lived in Ohio for a number of years and we had several good Amish Friends that lives there and I’ll tell you watching them build was a was just a joy to see people that still build in that manner. Now, obviously from a production standpoint of where we’re at now with our company, that really doesn’t work today’s world but, but I love the passion for their perfection to the craft, that was a great thing to see.
Bruce Norris One of one of the things that you really have is to make your construction, your general contractor but you also have a lot of the sub businesses under your own ownership. I think that’s pretty unusual, isn’t it?
Craig Evans It is, you know, when I when my wife and I moved to Florida, part of our process was I was looking at it as a business owner. So you know, one of the real niches because coming into a new market, you know, I knew that for me to to compete. I couldn’t just go out and compete with a lot of the large homebuilders, things like that, because, you know, I was than is bigger than nobody knows who I was. So I had to develop the niche of how to create our market share. And so what I started looking at where the weaknesses were, and fortunately for me, the weaknesses were all in the front end quote, unquote, front end of the jobs on the structural components, you know, the, the sidewalk, the dirt, the compaction of that the concrete and the block and framing and roofing and all of those components. So, you know, I started putting those teams together and developing that niche of how do we deal with that, which that was right up my alley, because again, I go back to the summer of my 15th year and 60 birthdays. That’s what my father taught me was how to build things that last. And then the force was with me as a businessman growing into how to make things efficient and still build a strong structural component that was right up my alley. So we did that for several years as the actually the only business that we had, which was all of our site work. You know, the land Clearing the grading, hauling all the dirt components. And then of course, all of the concrete in the block all of our framing, components setting, the roof trusses, all of that, and then the roofing as well. And then also we have our own plumbing division that we do commercial and residential plumbing. So just that company alone stays extremely busy as a subcontract company, then obviously from from a building standpoint with Douglas Brooke Homes, that makes our job a whole lot easier because as you said, we control those trades, control those timelines, which help us to be very efficient, but at the same time, we know exactly what we get with that. And that’s a big key to me.
Bruce Norris Yeah, that’s a very big key in Florida, you know, from investors come in California. Generally, we’re looking at a building lot. Okay, there it is. And it needs maybe a finish grade and you’re done. That’s never true in Florida. You look at it. It’s intimidating, you know, you look at is that a forest that’s on my lot? I mean, you could look at that and go Okay, well how is that ever going to turn into a Building lot.
Craig Evans Exactly. It’s that and knowing what to look for, as far as you know, even like you said, in that process, is that even a good lot to buy? You know, do we do even buy that lot, but once it’s purchased, knowing how to work those parameters, and knowing how to deal with those situations, has been a key component of our business, which obviously for Trinity, you know, we build for so many other people because we’re a large subcontract company. So, in that process, you know, knowing how to handle those scenarios for other builders as well makes us a very, very viable company. Now, we’ve had a lot of people that look at us and say, Well, isn’t that kind of counter intuitive that you’re, you’re also working for your competition. I look at that as for one from a business point, point of view is cash flow is is provided income but the reality is that as a business owner, myself, and so many people, just as you mentioned, really don’t know what to do. I mean, you know, I mentioned earlier I came from Georgia, down to Florida and in Georgia. On most lots, we’re maybe pulling out seven or eight trees. And we’re gonna remove two to three loads of dirt because there may be some, some undulations in the terrain that we’ve had to level out. And so we’re removing a loader to have dirt. It’s not uncommon in Southwest Florida that that you’re taking off on one lot, we may take off 40 5060 trees at some point just because it like you said it like you mentioned it looks like a forest. You know,
Joey Romero One of the thing that Craig mentioned yesterday is the flood elevation levels are you know, they’re set, but when they clear, can you talk about when clearing it might drop the actual how high but the lot is, is at that time?
Craig Evans Correct? Yes. So So there’s a couple of those things in play is as as we you know, as you mentioned earlier, we have so much so many trees and vegetation on a lot of these lots. When we do go through and clear these, that’s another component of literally just how much you know when we call infill. In other words, the dirt that we’re bringing them to the jobsite has to come in because if we’re taking out, let’s call it 40 trees and a lot of underbrush that’s on there to make way for a home obviously from from an environmental standpoint, we have to go back and, and plant additional trees to replace things and make sure that we’re protecting our air quality and the environment here. But within that process, when you think about all of the the structure of horticulture that’s underneath the ground, but the root balls and the root structure that they are that when we pull that out, because obviously we can’t build on it, because it has to be you know, that would decay and we have to create a structural integrity that they are even underneath the soil. So when we pull that out, a lot of times we can have up to you know, 10 to 12 loads of infill and dirt that are required just to get us back To quote unquote a starting point. So that’s where I think a lot of people don’t realize how much how much dirt is used on these job sites to make it to where it is a livable side and obviously that we’re still hitting flood zone elevations that we have to hit within areas that are floods on cable because again, we live in the state of Florida and the ocean is you know, sometimes just just right around the corner there you know, so we got to make sure that we’re attaining and reaching those elevations.
Bruce Norris In California, honestly, you sit there look at and go, Okay, well, that’s not even a lot. There’s never going to be a lot. That’s a park or something. So it is it’s a little bit overwhelming when you come from a background like that. The other thing is the additional dirt. You know, somebody asked me where do they get all the dirt from I said, You know what, I’ve never asked that but it’s a lot of dirt every time.
Craig Evans It is it is most of the houses down here you’re going to be dealing with 50 to 75 depending on the the the area that you’re in, you can deal with 50 to 75 maybe even 80 loads of dirt per lot for a single family residence. And that’s a lot of dirt. But fortunately you know, we’re we’re in Florida so we can only dig so deep but there are several areas of the state that have been approved for the mining pits for materials. And they’re Of course they’re pulling dirt out for for house pads and construction, things like that, but they’re also pulling out rock and different materials that they’ll use for roadway construction and that type of process. Okay, fortunately there are there are a couple mines down here one of them still has about 83 years left worth of material to be to be able to pull out of and
Bruce Norris I’m glad you said that because that’s that’s probably just about as many lots as there already are available in Florida.
Craig Evans Well, you know, in Cape Coral alone, we’re worse we’re we’re our headquarters is that there’s currently right about 80,000 vacant lots still available. You know, people don’t realize the landmass headed down here. You know, because when you look at a map, Florida’s this little strip of land sticking out in the water, and they don’t realize the land method is available, and it already has roadways put in and most of the infrastructure is there, we just got to develop the individual lots, which is very cost effective when you’re coming to build a single family versus trying to go in and develop an entire neighborhood, right.
Bruce Norris That’s the big difference. I think just out of the gate if you’re in California, you know, you’re usually buying a finish lot that depending on the county, you could be 100 to a lot more than that. But here the lots of very reasonable because they’re so plentiful, and they probably will be for a while. That’s what’s very attractive. to California investors, we’re not used to a new home starting with a two, we’re used to the lot in the permit starting with almost, you know, a two. So that’s that’s why it’s really, really attractive, or one of the reasons why it’s attractive to buy a new home is that you do have the elevations and sometimes they, they change and they’re, they’re more strict or the building codes are more strict. So when you buy a new home, you’re up to the code that they’re demanding right now and if you buy something 20 years old, then it’ll be at a different code and you could even pay a price for that. The other thing is everything you do is block and that’s not true some builders in even in Florida, so block is obviously a superior product. When you have a hurricane.
Craig Evans You are exactly correct in the process that a lot of people that have some of the older homes, they struggle when it comes to certain things of purchasing insurance. Getting replacement utility systems, you because everything’s failed after time. So if we’ve got a house that’s, you know, 40 years old, and there’s a septic system in that, that has to be replaced at that point. You know, the the elevations of where that was placed 40 years ago, are now completely different. So now the landscape of that house looks completely different because the code heights have changed based off, you know, what the, the theme of floodplains and flood levels are set up so buying new construction in that process, you know, really assures you that you’re, you know, what we call high and dry down here, you know, you’re getting in a place to where when the storm comes through, we’re not flooding home. So that’s that’s one big component of the new construction process. But the other aspect is just as we saw with with the storms coming through the Gulf, you know, this week and weekend and you know, we our prayers and thoughts are with everybody in the the Gulf Coast up in through Louisiana and Texas is there going to be getting pounded with some of these storms, but You know, fortunately, and this kind of goes back to to 91, when Andrew came, you know, Hurricane Andrew came through Miami, all Florida codes change dramatically then so the the amount of steel that is in the footers and in the walls themselves and what we call a tie beam, which is the top color of the wall structure itself that really locked everything in place. The amount of steel that are put in these walls is pretty intense. I mean, there’s a lot of material and steel that’s put inside these block walls. And inside the footers themselves, the foundation footers. But then like I say, the size of the splitters, the placement of them, and then the amount of concrete that not just that it’s the block walls themselves, but the amount of concrete that goes in to fill certain sales of the wall so that we’ve got columns of concrete also going through that are encasing the columns of steel that go into these walls. It’s actually a very, very strong country. construction product, and it was interesting to see after Hurricane Andrew hit the amount of damage that was caused. And then when we had hurricane Charley and oh five, how much less damage was caused and then when Irma, you know, Hurricane Irma came through and of course, just from a sensor that devastated the state, but the reality was, there was not a lot of the homes that were demolished if we want to call that we’re actually the old we’re still the older homes, the new construction. There was not a lot of damage that call us I mean, my personal home. I literally had one roof decks that came loose. That was it. So I had no interior damage. We lost no roofing material, we lost the I mean, no windows. So everything was fine
Bruce Norris In Hurricane Andrew actually came into Florida at the invitation of somebody that was an investor to look at damaged homes and when we were driving around You’d pass neighborhoods even back then that were that were blocked construction with minimal damage, then you go to a track that was stick built, it was a whole different story. It was unbelievably different. So you know, you kind of made a note to yourself, okay, we’re going to do anything in Florida is going to be blocked. That is for sure that I think what I want to try and press with people is that when you walk into Florida, you need somebody that understands the dirt in the lot business. It’s just really important. Because also when you go to different areas, you’re going to have choices that may be in California, or you know, you don’t have necessarily areas that still are septic, or well water. And so it’s really important to have a local knowledge of okay where these areas are and by the way, that doesn’t necessarily mean you want to avoid those areas because they’re some of them are very high in demand and and bring really high rents. But you just, you just need to have somebody you can rely on that knows the area knows how much dirt is gonna be moved. So you get a, an accurate number from the start, because that’s where we have. We definitely had problems with that with that we’re not intending to have it again
Craig Evans With us on the job, that will not be the issue against you know, and I think part of that versus one of the things that you mentioned in the relation of where a lot of these lawsuits are and their demand. The this these areas where, let’s say we’re a sceptic, and a well is and those types of processes. Those are actually some of the highest demand areas currently, based off the absorption rate of the market. Just Yeah, cause with the amount of lots that are available and the price that people would the affordability that people can get in whether it’s whether it’s for a rental, whether it’s you know, the single mom that’s looking for a home whatever the scenario, the affordability of these markets within these areas are fantastic for them. The purchaser and the buyer to be able to buy and I know a lot of places coming from other marketplaces in the in the country. You know, the the the concept of a well and septic versus a city water and sewer, you know, from a city perspective a utility is is our municipal utility process is a foreign concept. But again, just like we can block construction and all of the things that have transpired in the construction techniques and the structural technique, the the septic design, the materials that are being used currently with that has come so far over the last, you know, 10, 12 years. It’s a real science to see how these things go in. There’s a lot of painstaking work that goes into making sure that things are excavated correctly into the right depths and how things work and the correct flows and a proper septic system. Literally can last you 30 years, with no problems. It’s a great process. I would say it’s you know, we encourage people all the time, that is not thing to shy away from because it’s like well and septic law that’s actually like a thing in these areas right now these marketplaces because of affordability, that’s still a very, very desirable process.
Bruce Norris What the, the place I can relate that to is an area in California called Temecula. Temecula was one of the last areas that got built. And so almost everything was new, starting in the 80s and early 90s. And it was on septic. And sometimes well, and that area has exploded in value. So if you avoided that, you know, because of those things, you missed a big opportunity in California because it grew to be one of the best cities because everything was much newer. And that was that was kind of how it panned out and that’s what you’re talking about in these areas. Everything there is going to be pretty much a new house. And that’s not an area.
Craig Evans That’s correct. And then obviously that helps to compromise on things as well as you’re looking because you’re your neighbor Have your neighbor’s houses are newer home?
Bruce Norris You know, we I sent you a chart this morning and you sent it back. I didn’t get to pull it up yet. But it was rather an astonishing thing. That’s something like 90% of all available listings when pending in in this particular county, in Florida 90% or 90% of the listings when pending
Joey Romero 97
Bruce Norris Yeah, that’s crazy.
Craig Evans The amount of stuff that’s moving right now is really incredible. And the other chart that I’ve sent you showing where things are at between multifamily and single family homes as part of rent rates, and that process is astounding, and how things are going. But what was interesting is it shows just in in Cape Coral, which again is the city that we’re based out of, we kind of worked through a Tri County area here, but in this area that we’re at, they’re projecting that just over the next three years, another 20 562 family units per year being added to this marketplace. And that’s just to Cape Coral, that’s not including Charlotte county or Pinellas County or Sarasota County, all these, you know, when you think about that, that that’s astronomical growth, people that are coming to this area and needing housing
Bruce Norris Because we pay attention to those statistics, the population gain in in Florida is very different than the population gain. In California, California gains population because more babies are born then people die. Florida’s almost 100% of Florida’s population gain is a migration of a family or an adult from either within the other 50 states or from other countries. So when we get migration of Florida, and I’ve already looked at that, I’m using the term we as a Floridian here.It’s an adult showing up and that’s a big deal, because that’s the third rental demand or a by demand.
Craig Evans That’s correct.
Bruce Norris Yeah, that’s, that’s pretty amazing. I’m going to touch on your build time with a little bit of trepidation because I’ve never really heard this number before. But I think I think I just want to point out and I’m not trying to hold you to this number because but what it points to is that you’re because you have some vertical integration. You could you can control things better than most builders and right now everything’s in demand. So you can’t necessarily get everybody to respond to you. But your your typical build time for the, the models that you produce right now is under four months. Is that is that accurate?
Craig Evans Absolutely. Well, you know, from the time we pull the permanent has the permanent hang. We are most of the time actually less than 90 days.
Bruce Norris I really hate it to use that term.
Craig Evans We, we we, again, I say this, I want to clarify this but we have had builds where everything clicked and everything hit exactly perfect and We have had builds that we from the day we pulled the permanent scrape the lot and started clearing to the day we co because everything went perfect. We’ve had days to where we’ve finished our builds in our we’ve had certain houses that we finished our builds in 54 to 56 days. That’s not that’s not every build by any stretch of the imagination. But you know, where most people are looking at, you know, 122 years, four months to eight months to build a house. We’re most often always less than 90 days. Yeah. Again, from the day we pull up permit.
Bruce Norris Yeah, and that speaks to your process. And I think the your control of some of the really important elements in the beginning you you know what you’re doing and you have the, you have the staff to where you don’t have to you don’t have to wait for someone have an opening for you. You already know what the schedule is going to be. And that’s a that’s a big deal and a big advantage. Here’s a that’s probably the the toughest question. I’m going to ask You but it’s it’s a question of course that comes up from investors. So we’re in a hot market, everything that you could possibly build would sell right now for retail. And you’re willing to take on building a home with or some where there’s some equity left for an investor and do it repetitively. So I guess the the best question is, why is that model attractive to you? And we’re glad to don’t by the way.
Craig Evans Well, honestly, Bruce, I believe and I’ve said this to you in the past, but I’ll say this again, for people to hear. I believe a lot of what makes this model attractive to me is because of who you are, and what you have stood for, through the things that have transpired over the last six, seven months through this process with with some of the people in the past. You know, being men of integrity and doing things the right way says a lot to me. You are correct. Could I sell plenty of homes that are retail price point and not have to give equity away. Absolutely. I mean, literally right now, I don’t have a single house on the market. That is that is finished with construction that is available for sale. Everything has been sold. And we’re Yeah, you can’t keep we put stuff out. Yeah, as fast as we’re putting stuff on the market. It’s, you know, we’re having homes that we’re pulling out that our spec builds. And before we even get a permit that we’re selling stuff, but within this process, the other thing that I liked about the model, obviously one aspect is is again, who you and Aaron are as men and and how you carry yourself and how you conduct business. But, you know, aside from that, it still has to make business sense. So when with the setup that we’re working through, and that you guys have, you know, dream big on and put in place is, you know, I’ve told our staff that this is really almost a drive up scenario to where the investor is able to drive up. And select which meal they want through the drive in, and you know what options they want on their hamburger and go. And so from our side of it, it makes sense because, you know, when we’re not having to spend the time that we do with a retail buyer, that makes a lot of sense to us, you know, because now we’re able to incorporate those. And when we’re returning the product as fast as we can turn it, it’s, it still makes sense for us to continue to have that as an aside for us. You know, plus the other aspect as our company continues to grow, and we’re moving into other markets that makes them a great aspect for an offering for other investors to be able to look at housing and other market you know, we’re not there yet. We’re growing and growing quickly, but I’m, you know, but I’m looking at a long term for our company. I think what The Norris Group does and offers and how they’re putting this program together, how you and Aaron put this program together makes a lot of sense for not the whole of our business model, but definitely a good piece of our business model to be, you know, intertwined with who you guys are and how everything works. It just makes a lot of sense to us from that aspect for the long term. Again, not as a whole, it’s not my entire business model. But I think it makes a good quality since, for us to be aligned with people like yourselves, and what you’re doing. And you know, because again, our goal is trying to make a fair profit for quality products, and do it as many times as we can. And when, you know, when I look at it, we don’t have to put the amount of time in that we would normally do on a retail build. Then at that point, I can start pulling the cost out, and everything makes sense.
Bruce Norris Yeah, that’s why we’re, you know, that’s why all the effort is done upfront, you know, with the meetings that we’ve had and the design of the plan and all that so it’s it becomes simpler. After that. It’s it’s been Yeah, the last 45 days. It’s taken a fair amount of time of everybody’s trying to get to the, okay, this is what we want. But you know, we were there. So that’s, that’s quite an accomplishment.
Craig Evans I think the settled adage of, you know, anything worth doing is typically going to be tough. If it was easy, everybody would do it. And, you know, yes, we’ve all we’ve all had a lot of long days and putting in a lot of time to get this process, right, and work through certain, you know, concepts and plans and timing and that whole process, but I think at the end of the day, you know, with all of us being able to put in that time and, and get this this process Irondale and with the the patience of the investment groups, and then the teams of investors and the people that you bring to the table, I think that process, you know, through their patience, and the work that you guys and our team have done together, pull this I think it’ll be a great process moving forward and provides streamlined ability for people to invest.
Bruce Norris I think it’s important for everybody to note that listens to this is that, you know, during this process, we definitely had differences of opinion on what let’s let’s do this and let’s add this and a very valuable input from you was okay, we can do that here’s the cost and what will it rent? What will it bring in extra rent? Nothing. That’s an important local knowledge to have, for instance, in sales. You know, I’m working with a friend contractor that I brought from California, where we’re flipping some homes, and we realized in certain areas, a three car garage is a big deal in other places, it’s not, you know, so that’s what you were trying to say, if that we could, we could add this, it’s going to be this much, but it will not change your ability to rent this for $1 more. And that’s
Craig Evans Correct.
Bruce Norris That was good to hear, because that’s what we’re really trying to accomplish is the best bang for the buck.
Craig Evans That’s right. And that’s, I think, what we put together, you know, between our team and your team as far as working through and like you said that everybody hasn’t always agreed and that’s okay. We won’t always do in life, you know, but we’ve got to be able to continue to work through for what’s the best end goal. And in that I think what we’ve got is a great product lineup that is an offering for many different price points, allowing some equity through there to be able to, for the investor to have an equity position as well. I think where we’re at makes a lot of sense. And we’ve got product in there that is, you know, we can do some additional things that if they’re willing to flip and try to go that route, then you know that there are some size models that would work in a flipping scenario, compared to, you know, a hold and rent. So I think what we’ve done allows a lot of flexibility for people to have options of how they what they choose to invest.
Bruce Norris You just opened Pandora’s box, man. I’m only pulling your leg.
Joey Romero That’ OK I’ll just cut it out.
Craig Evans Joey, Joey back that line out.
Bruce Norris 31:55
Thanks for joining us, Criag. I really appreciate all the effort. From the very first day we met. As I was paying delinquent bills to contractors, you and I had our first half hour conversation or more, and it’s been a pleasure it really has been.
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. 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 to thenorrisgroup.com and click the hard money tab