Breaking Ground: What Really Happens During a Luxury Renovation

Brian, it’s gonna be fun to talk to you today about the importance of luxury remodels and how the real life of what a luxury remodel really is and what goes into a luxury remodel.

And one of the things that a lot of nerves go into these things because they know that their life is about to be changed.

But how do we as a company, or how do you as a leader of your division, how do you minimize the anxiety and the, from the customer’s standpoint, and the challenges and things that go into a remodel?

Like how do you go about that to make them feel at ease, if that makes sense?

Well, throughout the process, we have multiple like same page meetings with the customers, whether it be, you know, the bid presentation, pre-com, we’re meeting with subs on site.

I think it’s very important to establish those clear boundaries and expectations.

So we like to go, especially luxury high end, that price point, they can afford for the pods if we need to store stuff to give us storage in the garage for our construction materials.

We always say we prefer you to move out during the remodel.

Sometimes we’re able to make it work, but the experience is just never good.

You’re hearing jackhammers, everything, all throughout the day, it’s just a nightmare.

So if you can, in the beginning, set those clear expectations.

You will be dealing with noise, guys coming early in the morning.

We prefer you to move out.

We’re gonna need space to store.

Invest in the pods, protect your stuff, because those are enclosed units that we’ll never have to go into until the project’s done.

Give us the space so that we can, you know, be efficient in the construction process.

When you were just talking about boundaries and expectations, elaborate more on that.

Like, explain to me, like, what do you mean by that?

People may think boundaries is a negative word.

All I’m doing is, when I go in there, I let the customer know, hey, we are gonna need space to be able to stage.

I’m gonna have finished materials come in here because we do not wanna wait till when we need them, because we always have issues with stuff missing.

So I’m gonna need this space.

And it even says it in our customer expectations that we need at least a single car garage for staging.

Setting those boundaries early up, before the project even starts, as opposed to day one, being there and being like, where’s my space?

I need you to move this, this, and this.

It’s already a stressful situation.

Customer doesn’t wanna be like, oh, I gotta figure out where to put my car.

You just moved out, you’re tired, yeah.

Yeah, it’s just doing that up front so they’re not caught off guard.

And I think also going a step further, like going through the logistics of what to expect, you know, like- Like going back to that expectation sheet, you know, we build our schedules very efficiently, but there may be days when there may not be a subcontractor or somebody on site.

This is part of the course.

It’s normal construction.

You’re like, Brian, where’s my guy at?

Yeah, exactly.

I thought we were getting this done today.

And you’re like, no, we’re still way ahead of plan.

It’s just these guys, you know, they’re sending four guys on Thursday, not one guy Monday through Thursday.

Yeah, because we have other projects going on, but trust me, we still have that due date and we’re gonna meet it.

Another expectation, you know, if the house, I joke about this one.

If your house isn’t on fire or is actively flooding, whatever you have for me after 5 p.m. can wait till the next morning.

Because everybody does have families, you know what I mean?

And setting that boundary up front, because if they’re calling you at 6.30 and you’re never answering and they’re like, this guy just ignores me.

Or vice versa, you’re calling them at 6.30 and bugging them.

Like they have families as well.

Like there needs to be some boundaries set so that they’re- Yeah, so non-emergencies, let’s wait till the next day.

If emergency’s in progress, obviously we need to know.

Absolutely, that’s good.

One thing that I think you hit on really important was like in the pre-construction aspect of these things, it’s so important for us as a team to collaborate beforehand and make sure that everything that we’re doing is thought out.

And everything we’re doing, because a lot of times, you know, if I was getting ready to remodel my house, let’s say, and I didn’t know what to do, I’d interview a bunch of companies, you know, and find out who was the best.

And I would ask a simple question.

I’d say, okay, explain to me, Kingdom & Co, what makes you different as a high-end luxury remodel compared to some guy that I know, a friend of a friend, who said he can do it way cheaper than you guys?

You know, what would be the difference?

How would you compare that?

Well, first off, if we’re talking about the beginning of a remodel or just like going back to pre-con is the logistics.

Like down to where I’m gonna stage the lumber for this site.

I’m taking into account, am I doing any underground utilities here?

Where I stage, am I gonna be going over that?

Where I set this dumpster?

Do I have a clear path for heavy equipment?

These are all the things that a lot of contractors will figure out on the fly.

We take a plot plan that has everything showed that’s gonna be on your site, where I’m staging, if we’re doing a CMU wall, your lumbers here, everything is thought out so that I’m not calling Westerner Leader, the dumpster company, and say, hey, unfortunately I had you put this dumpster here, but it’s in the way, I need you to come move it.

Just kills time, unneeded fees.

That, to me, is the time that we take the pre-plan, sets us apart for sure.

One of the things I noticed with you, because you’re so good at this, when I watch the job sites with you sometimes, I’m like, man, like the other day when we were at Grand Rim, I was like, my goodness, you see so many things that are just, you’re almost like a prophet.

It seems like you’re prophesying everything beforehand, what’s gonna happen, because you’re three moves ahead.

And I think the cheaper contractors, the guys that we sometimes will compete against, they’re cheaper, but at the end of the day, they’re not, because they’re more expensive, either on time frames that take forever, or they miss a lot of things, and at the end of the day, you’re paying for those anyways, and lots of times, a lot of our competitors will make a lot of money off of change orders.

So, typically a change order will mark up a certain percentage, but on change orders, they double the markup, or triple the markup, because they can’t, and by that time, you’re handcuffed, and there’s nothing you can do about that.

See, and again, it goes back to the customer experience.

We go into this relationship as, we’re gonna be your biggest advocate, we’re not gonna sit here and nickel and dime you to get to the end of the project.

Two things are gonna happen.

It’s gonna be terrible experience for you, you’re gonna have a bad taste in your mouth when you’re done, granted, we’ll give you a good product, but you’re gonna spend a lot more than you need to.

So, to me, it goes back to customer experience.

We want to go into this relationship being your advocate, not nickel and dime you throughout the process.

A lot of these contractors, they see the end goal, they don’t care how they get there, even if it means soiling the experience through change orders.

That is one thing that sets us apart, and we’ve done so many, so thinking three moves ahead just because I’ve seen it.

I know, hey, we’re gonna run into this by just looking at the plans.

Let’s plan for this now, customer.

Unfortunately, it’s gonna cost X and X. They’re not caught off guard.

It’s in the pre-con process before they even get their final bid presentation.

So our change orders, compared to other people, is so limited, it’s really just to unforeseen.

Right, well, I remember, again, we walked through this custom home we’re doing up in McDonald Highlands, and I was blown away.

We’re in framing stages.

I’m watching you walk through it, and we’re lining out all the outlets and the switches, and you’re seeing things through and through, and then you call me back, and you say, guess what?

I just thought about something.

I’m like, what?

You’re like, there’s a beam in the way, and where these drop-down shades are gonna be, there’s gonna be the way, and I’m going, most guys wouldn’t have caught that till drywall.

And you’re catching that in framing and making game plans for that.

So I just think, to me, it’s a testament to who you are and who we are as a company, being able to foresee things, and it saves us time and money on our end, and it saves the customers time and money on their end, and I love the fact that we’re a company of transparency.

We try our best not to do change orders.

They’re gonna happen.

There’s a job where we forgot, or we didn’t forget, we just didn’t foresee a fire sprinkler that needed to be moved, and unfortunately, those are things that sometimes will be missed, but we’re not out there to get ya.

We’re not out there to go, hey, let’s give them a low bid at 100 grand, and then we’ll- Secure the job, and then what we’ll do is say, hey, we didn’t account for this, even though it says it on the plans, what I bid off of, we didn’t account for this, so I need a change order, you know?

So we take the time to actually comb through every page.

All the time, we’ll find contradictory, structural, architectural notes, and we’ll RFI the actual engineer and get clarification before we give that bid.

A lot of people will just be like, eh, I think it’s this way, we’ll just bid it like this.

And you know what, worst case scenario, I’m gonna change the order of the client, make a bunch of money.

Yep.

That’s exciting for them.

They get off on that.

It’s exciting.

So I guess one of the ways, so just going through this conversation and this topic, to avoid a bad remodel experience, make sure you hire a really good contractor, even if they are more money, because they are more transparent, and they seem to be the company, at least if they’re the right company, they can foresee things, they’re not trying to make money off of your change orders.

And those are questions you want to ask, like if I was gonna remodel my house right now, this is what I would do.

I’d go interview a couple companies, right?

And I would say, okay, I want to talk to some of your customers.

And what I would want to know from their customers is what was your experience, and how many change orders did you receive?

Because that would be a very telling thing for me to go, he was a great, they’re a great company, but we were $100,000 over budget based off the change orders right there.

I’m like, okay, that’s a red flag.

Oh yeah, and also if they don’t even set up the meeting, that’s a red flag too, because the customers, they don’t want to get you in front of those customers.

And not only that, I would say, okay, I also want to know your process before the construction process even starts.

How many times do you meet with me?

How do we go through and prevent a lot of these changes from happening?

Your contractor better be very good at reading plans early on, does catch these things at the very beginning to save you tons of money and time.

And what’s great, I know from previous podcasts, you’ve probably heard me say this, I’m the broken record, but the value in a design build, as opposed to just a contractor, it will alleviate your stress.

Because you’re tied to the design.

You’re controlling the ship.

You’re doing the full design, you’re picking out all the finishes, you’re doing the submittals to the different jurisdictions, you’re making sure any revisions are taken care of.

When you go in the situation, you can still have a great contractor work with that outside designer, but just know you’re going to be doing a lot more coordination with those.

So you’re going to have to be calling your designer, who has their own architect and engineers, and you’re going to have to coordinate all that.

The value in a design build is we already have those relationships built.

They’re very good.

And they’re very competitive to where if you were going to go out and do it yourself.

So again, I think there’s a broken record, but the design build route, as opposed to doing it yourself, it’s a lot more seamless and less stressful.

Right, because again, in our company, it’s really neat to see when I’m sitting, you’re sitting there, I’m sitting there with Jen, or sitting with Carrie, or sitting, whatever.

You’re sitting there going through, and you’re going through plants earlier on, you’re walking by, hey Brian, I have a quick question for you.

And it’s just, it’s a team effort, and a lot of these cotton.

We have three same page meetings before we even get to thinking of a bid presentation.

We want to have that design 100% locked in, and by involving, whether it be the superintendent, the project manager, or the actual production manager, involved early in the stages, makes it so that we can catch those issues that we may arise, and we bid properly.

There’s this thing that I call the mirage effect.

Right, and what I mean by the mirage effect is that you want something so badly, but it’s not realistic.

And I’m guilty of this as a person in my own life, is I’ll be obsessed with the price, right?

I’ll be like, okay, I want to remodel my house for $300,000.

And that’s all I can think about.

And so I go interview a bunch of companies, and then I start just wanting to hear what I want to hear.

And I go and interview, let’s say one company’s what, 350, one’s 325, one’s 375, and one’s 250.

I’m right there, you know, the mirage effect goes into, I’m gonna hire the 250 guy, because it’s just, that’s where my mind’s at, you know?

And the reality comes into play, then that project ends up becoming $400,000, and I’m way over budget, and I’m super angry and frustrated.

And I get caught because I had that mirage mindset of like, I just, I was so obsessive with this price that wasn’t the reality of what I was wanting to get accomplished at the end of the day.

And you hit it on the head, like, these contractors, I mean, they will tell you what you want to hear.

I’ll give you an example.

We had a project we did where we were doing a casita.

The contractor said, you know, your offsite utilities, when I say offsite utilities, it’s your feeders from a transformer to your main panel, from there to a sub panel, right?

They said that Envy Energy will take care of everything, the digging, the trenching, the conduit, we just take it from the panel on.

Come to find out, Envy Energy never trenches or put conduits in.

So this is a $50,000 expense that, you know, the contractor told the homeowner, no, this should be covered, that now they’re out of pocket.

What did that do there?

Customer experience guaranteed went down the toilet for the rest of that project, and it put a sour taste in their mouth.

Because the contractor, when asked the question, didn’t do their due diligence to make sure they just wanted to sell the job.

And that’s $50,000, a lot of money.

Oh, for something that simple.

Yeah, when you’re, I mean, you’re looking at the budget of the project, that’s over 10%, that’s crazy.

That’s crazy, yeah.

Yeah, that’s a really good one.

So yeah, that’s a way to really, hiring a good contractor will really help alleviate a lot of stress in the remodel process.

Okay, so when it comes to the pods, Brian, I know sometimes you need storage, sometimes the garages are full, sometimes you just can’t do that.

But how do you manage the pods when it comes to HOAs and logistics?

Because that’s kind of a pain in the butt.

Well, that’s another good perk of working with us, is we take care of all that submittal requirements for the HOA.

So whether it be dumpsters, pods, we have to set rock on the street and caution it off, or do something of that sorts.

We handle that with the HOA, so it takes that burden off of you.

We’ve done a couple of teardowns.

There’s not a lot of teardowns in Vegas, like it typically is in the East Coast.

No, you typically find them Rancho Circle, the old Rancho Bel-Air, old school Vegas.

You’ll get teardowns there, and we’ve done a teardown down there.

Now, the pros and cons.

What I’ve seen from my end is, I’ve seen the pros are, it’s a lot quicker, it gets done a lot faster.

The cons are, it can be costly, almost as cumbersome as just tearing the whole thing down and doing a whole new build.

Where would you guide people if they’re thinking about like, they love the lot they’re on, they don’t want to move, but they almost want to just redo the whole thing?

You hit it on the head.

To me, it’s like my mental questionnaire I would ask them.

So, location, obviously, that’s a big point for you.

That’s why you want to stay here.

What are you looking to get out of this?

Do you want this remodeled?

Do you want your exterior elevation to be completely new?

Are we going to tie in old themes of your original home to this addition, these certain things, this remodel?

And really, it comes down to budget.

Like you said, a teardown price per square foot, as opposed to a remodel, is obviously going to be more.

But keep in mind, everything’s new.

It’s a brand new house.

Brand new house, new foundation, new everything.

Everything’s underground, all new piping, all new electrical, all new finishes.

So, I’m a big proponent of teardown just because if the price point makes sense.

Again, it goes back to the budget.

But if you’re in these, like again, these central parts of town, a lot of history, you love the lot.

Yeah, like one of our clients that we recently had, they bought a home, I think for about a million bucks.

They tore it down.

It was like a $1.2 million remodel.

So, they’re into a 2.2 brand new home in this beautiful area of Vegas.

It’s gonna comp for two and a half million dollars if they ever resold it.

So, they do get value.

Even if it’s at 2.2, even if they break even on it, now they have a brand new home at the value that they want.

And it’s a win-win because now they’re still in this beautiful area and they have this beautiful home that they’ve always wanted.

So, I think it’s a win-win if you do it right.

And we can guide people on that because values are very important.

We don’t wanna get over our head and all of a sudden you’re in this thing, it’s two and a half million dollars and it doesn’t comp for two and a half million dollars, that would suck.

Well, that’s one thing we do.

Like, in addition to our pre-consult, like, when we go and meet with the client, that first initial walkthrough will, if they’re looking to do the remodel and get the equity out of it, we can tell them right then if it’s gonna happen or not.

We have the ability to pull comps in the area, see what stuff’s selling for, seeing if it actually pencils out to where you do wanna undertake this remodel, but this is not my forever home.

And I wanna make sure when I sell this home in two to three years, I’m gonna get that value back.

Right, how many times have we talked people out of doing things, we’re like, man, I wouldn’t add, there’s a client where I’m like, I would not add an extra bathroom to this house because it’s not gonna add any value and it’s gonna cost you $40,000.

I wouldn’t do that.

And they’re like, thank you so much.

So we took that money, put it into a wine cellar, I mean, a wine, what do you call it?

Walk-in wine.

Walk-in wine, yeah.

And then I was like, oh my gosh, that’s much better.

And then they added, we did their entire staircase and did two other things.

I’m like, man, they did all that instead of doing a bathroom.

To me, I was like, a no-brainer.

Yeah, and then if it goes back to like, this is gonna be my forever home, I plan on having my grandkids run in this home, I do want that extra bathroom, 100%.

Then let’s do it.

Yeah, we’re gonna do whatever you want at the end of the day, but we also will give you advice if it’s worth it or not.

Basically, to end the conversation of this topic, I love your perspective, Brian, because you have such knowledge, you have so much experience.

I just think it’s really neat to be able to see that in order for us to have success as a community and people looking to remodel their home and have a good, successful experience, it comes down to hiring a good contractor.

It comes down to taking your time and really getting your details right.

It takes time to make sure you go through expectations and understanding what goes into these things.

But at the end of the day, yes, it’s challenging, but it should be a good experience, and it should be one of those experiences when you’re done with it, you’re like, man, that was, what we just accomplished was incredible.

Yeah, we want you to enjoy the process, not hate it the entire time, because what’s the point?

Exactly right.

Again, like you said, picking that right contractor, vet them, go look at their previous projects, interview the customers.

I mean, the only thing they could say is no, and then right then that’s a red flag.

Right, exactly right.