Hey y'all. Stephen Burns here and we're
back for episode. 16 of building with Brevin I say we but
actually this week it is. Just me.
I'm flying solo and Brian is enjoying some time off in
Amsterdam actually, so he is. Abroad and enjoying some much
needed vacation. So anyways, we didn't want to
miss a beat, didn't want to miss a week, and so I am going to
take this episode and try to provide as much value as I can
to you guys with. Just being by myself, so see how
it goes. And you guys feel free to.
Give me any sort of feedback after you listen to this SO.
This week though I want to talk about something that we've kind
of touched on on other podcasts, but I just don't think we can
talk about it enough. And I think our listeners really
like to hear it based on the stats that we're seeing from the
podcast analytics. So it's going to be a a very
value packed episode and we'll try to keep it basically a quick
hitter. Only one person to talk, so I'll
do my best here. But anyways, without further
ado, let's jump into episode 16. This one is going to be all
about the different value that different builders bring.
So value is a huge. Equation and each builder is
providing different values. And that's why they are all
different prices so as you shop. Builders in your local market
for your particular. Custom home on your particular
lot that. Has never been built before.
You're going to get prices all over the board and it's really,
really hard to. Compare apples to apples and
with that that's why I wanted to make this episode to touch on
that a little bit and just give you guys some builder insight
into that so you know exactly what to expect when you're
potentially price shopping builders or trying to wrap your
head around and make sense, make sense of.
Where all these builder prices? Are coming from and why?
They're different. You know, it's the same home,
it's the same lot, but there's just so many equations that go
into it. So that's basically.
What we're going to talk about today, and I've got a couple
points here and I'm going to walk you guys through something
really cool. It's called the value.
Equation. And I'll tell you, I stole it
from Alex Hormozi. So people.
Who are familiar with him, you know, hopefully you guys.
Already know about this, but if you don't I'm happy to share it
and I want to give him full credit for the equation, but I'm
going to plug it into how it relates to.
Custom home building, so stay. Tuned Listen to the full episode
so that you get the full value. There.
No pun intended, since this episode is all about value, but.
Listen to the end and I can guarantee you you're going to
have better insight on what to look for when you're shopping a
custom builder. So.
You know, first of all. I want to preface this by saying
that value or pricing that custom builders are going to
send for your build will be variable on a lot of different
factors. Now one that I want to just cut
off the top real. Quick is going to be different
materials and you know different trades that they're going to use
or labor that they're going to use for your home, right?
All of that stuff is not created equal.
Of course, if you're doing Tyvek on the outside or Thermoply or
something like that, which is a lower end product for
waterproofing for those of you who aren't familiar versus a
builder, that's. Using zip system as their
standard zip system is arguably one of the best waterproofing
membranes on the exterior of your home, so I want to use that
as an example because that. Is a different range there in a
builder that's using Tyvek or Thermoply or any of those other?
Inferior products to waterproof your.
Home are are really not a good comparison to a builder that's
going to use the best in the top of the line materials, right?
So that's a quick. Hit on materials.
But not only that, of course the labor that they're using for
your home. I think everybody knows that.
You know, when it comes to tile or flooring or whatever, you can
select your own materials, but if there's a?
Bad installer on that. You can't save good materials,
so. It's it's one thing to pick the
best materials in the business or the best materials that are
in front of you. But if you have an awful
installer and you know you're cutting prices to get the
cheapest installer in the business and the cheapest guy,
that would take the job. They're probably not going to be
the best quality, and they're probably not going to be good on
their timeline. Either they're probably going to
call you and my truck broke down, or I'm.
I'm hungover today or whatever their excuses, right?
If they're going to have excuses left and right, because most of
the time those people are not professionals and are not the
ones that you want building your custom dream home.
So like I said, that's a quick touch on just materials and
labor alone and it's hard to compare those things apples to
apples materials a little bit. You know, a lot of builders
should have their standards broken out to say this is what
we build with. Standard.
You know, it's zip system, it's post tension foundation or
whatever. You know, but the the labor is
the tough. Part you know it's it's tough to
evaluate how good a. Frame crew is or how good?
A tile installer is or how good a drywall.
Crew or a painter is right. They could have different prices
and just because they're charging the most doesn't mean
they're the best, right? So I.
Think that it's really important to differentiate there that.
You want to go with a reputable and trusted builder and somebody
who you trust in your gut. To make the right decisions and
use the right materials and labor to build your.
Home that is going to meet or exceed your expectations and
your quality so. Just want to start there, but
now let's jump into a way that you can actually.
Can, in my opinion, try to evaluate different builders.
Based on this value equation that I'm going to propose to
you. So the value.
Equation. Let's start there.
The value equation looks like this, so you start.
With value, value is equal to. And it's a top of the equation
and then a bottom, so it's a multiplication over a division.
I will also post this value. Equation so that you guys have a
visual of it in the show notes and hopefully if you guys are
watching this video I'll post it somewhere on the screen so you
can catch that too. But the value.
Equation is basically value equals your dream outcome times
the perceived likelihood of achievement.
Divided by time delay times, effort in time.
So I know that's a lot. I know if you're listening in
your car or somewhere to this podcast, that's hard.
To wrap your head around. So what I want to do is I want
to talk through each one of those points and show you
basically what. That would look like and how
that relates to? Custom home building and what
we're doing to maximize the value to each and every one of
our clients or our homeowners. What I'm going to do is break it
down step by step. I'm going to also identify the
absolute Max value in this equation from a a home builder's
perspective just to set the. Absolute upper limit.
I can also break it down and tell you the absolute lower
limit and and give you those two bookends and then we'll tell you
exactly how. We're trying our best to achieve
the upper. Limits of this value equation
so. More value, of course, is always
going to be better, and more value comes at really.
Focusing in on this value equation, so like I said.
Want to go? Back and just thank Alex
Hormozi. He is a.
Brilliant minded business entrepreneur.
He came up with this equation. He's all over social media if
you want to search for him. He's got some great content for
those of you other entrepreneurs out there.
Or even just people that want to dig further into this value
equation. So anyways, now let's jump back
forward to the value equation. If we are trying to maximize
value, then we want to maximize the top of this.
Equation and minimize the bottom of this equation.
So any division problem if you put 0?
At the bottom, your answer is infinite, you know, so that is
the ultimate goal. The lower you can make your
denominator or your bottom number in this equation, the
better off this value. Is going to be.
So let's start at the top. Let's talk.
About dream outcome, the dream outcome of any custom build
would be getting that client into their dream home.
So that looks different for everybody but getting them into
their dream home. And that includes quality.
That includes every last detail. That is in their heads that we
have to. Somehow.
Get them to communicate out to us or we have to.
Ask questions to dig that out of them so it's the quality.
It's the expectations. It is putting all those pieces
together to produce a. Quote UN quote which there is
never this, but quote UN quote a perfect home, perfect dream home
for these clients. So.
That would be the dream outcome is a dream home that they want,
right. And like I said, that can be
different for everybody. Dream home doesn't have to be a
10,000 square foot mansion on lake lot, you know, and I mean
some people don't want that, right?
And some people are very realistic about their their.
Dream, and that is what we're we're.
Referring to here. So their dream outcome, which
is, has to be realistic. Is that dream outcome portion of
this equation Then the next thing so that dream outcome is
multiplied by the perceived likelihood?
Of achievement now perceived likelihood of.
Achievement. Let's break that down,
basically. How likely?
The clients feel that this. Outcome is going to be achieved,
so they've have their. Dream outcome now identified.
The builder knows about it, everybody.
'S on the same page. What confidence does the client
have that that builder that they've?
Selected is going to give them that dream outcome that they're
looking for that is the perceived likelihood of
achievement. And I want to just tie that back
into what we always talk about is that's where it goes to,
really. Trusting the builder that you
choose right, you have to be. Able to trust them and that is
that perceived. Likelihood of achievement now?
Dream outcome times perceived likelihood of achievement.
That's the top of the. Equation, we want to maximize
both of those as a builder. So we want to give you that
dream home that you're looking for, and we also want to do that
by. Making you feel confident in
reassuring you every step of the way, and that's a big part of.
Expectations that we can set as a builder to.
Make you confident that you're going to get that dream outcome.
So that's the top of the equation.
Now let's break that down and let's go to the bottom of the
equation, which is time. Delay number one in effort and
sacrifice. So time delay, of course.
If we could snap our fingers as a builder and say we can have
you in your dream home today, right now.
Get your moving truck ready because the home is ready for
you on your lot. Your dream home, that would be.
Almost the zero time delay. You can basically snap your
fingers and be into your dream home.
So that is minimizing that time delay in maximizing this value
equation. Now, of course, let's be real.
Here, no home has ever been built in one day that I'm aware
of. And if it is, it's not a home
that you probably want to live in for the long term.
Might be an overnight something, right?
Or an outdoor shelter. But it's it's.
Not going to be a dream home, so.
That time delay is what we're constantly working on as a
builder to be as. Efficient as possible so that we
can delay or reduce the. Delays throughout the
construction process and really be an efficient builder to get
you into that home as quickly as possible.
Now that is so complex, but every builder does that.
Differently and and we can talk through that more, but a good
question to ask your builder would be.
How long does it take you guys on average to build a home of
this size and do you have results?
That we can see and some way for them to quantify that and and
really be able to compare one builder to the to the next.
OK, not to get off topic though, so we had.
Time delay times the effort and sacrifice required by the.
Client so effort and sacrifice. In a custom home building
perspective, effort and sacrifice would most likely look
like. Homeowners having to put in a
lot of their own work, they would have to.
Make all of the selections on their own.
They would have to be organized On their own.
They would have to micromanage the builder and call and ask for
updates because. Nothing's getting done.
They would have to. Contact people left and right.
Not only the builder, but maybe trades even or materials or
vendors or suppliers. As you can see where I'm going
with this, that is a lot of effort.
From the homeowners perspective, when you start looking at it
from that way, time is money. And if you're the client paying
this custom home builder and they're not doing what they're
supposed to, that's a lot of. Effort and a lot of stress and a
lot more resources from your pocket that you have to dedicate
to this build. So effort and sacrifice, we're
always trying. To minimize that, I would say
sacrifice. Another thing that goes into
this would be money, right? The least amount of money
possible to achieve that. Dream home that you want, if we
could. Say minimize the time and
minimize the money and the the effort required by a homeowner
to say, look, here's the optimal thing we can get you into your
home today. We can also do it for $1.00 or
let's let's say 0 right $0.00 we're.
Just going to give it to you. And the sacrifice that would be
required or the effort? Would be required from the the
client would be 0. I mean, they're getting their
dream home today for no money. They don't have to ask any
questions, don't have to manage anything, don't have to do
anything on their own, right? So Builder takes care of all
that, so I tell you that. Extreme because that is the
ideal. Scenario which is also
impossible, but that sets the. Denominator of this equation
practically at 0 which? Provides infinite value and
really drives this equation up. So we're.
Constantly thinking about this like I said.
As a custom, a premier custom home builder to wrap our heads
around, how can we drive more value to each and every?
One of our clients, so I kind of touched on it, but let's go back
through and let's just maximize and minimize this equation just
to set that upper and lower bookend like I was talking about
give you those boundaries. And then and then recap this
whole thing and hope that you guys.
Have taken some good little tidbits from this.
OK, so looking at that equation again, value equals dream
outcome times perceived likelihood of achievement.
So let's focus there first. And let's start with the lower
limit. So the absolute worst building
experience you could imagine in zero value from your builder
would look like this. All right.
So no value would have to equal. You don't even get anything
close to your dream home, right? It doesn't happen.
It doesn't turn out. You had an awful experience.
You know the home is falling apart and it's not anything
close to what you had. Designed or dreamed up in your
head and tried your best to communicate to the builder or.
Architect or interior designer? So that would be an awful dream.
Outcome times Perceived likelihood of achievement if
this builder was. Arrogant or rude, or had awful
communication skills or did not, was not responsive or any other
thing you can think of. I would argue that your
perceived likelihood of. Achievement would be close to 0.
You have very, very little faith that that builder would be able
to. Produce your dream outcome.
So another negative. They're going to the bottom of
this equation now, so the denominator time.
Delay and effort and SAC or time delay times effort and
sacrifice. So time delay.
Let's say your dream home took 15 years to build.
That's not something that I think any builder could ever.
Sell anybody on unless it was one-of-a-kind build, but.
Any normal build 15 years is absolutely absurd, right?
It's called 100 years. Nobody would even be alive by
the time their home is done, so that would make that.
Exponential that that time delay would be so great that your
value would be. Almost zero and then times
effort and sacrifice. So your effort.
And your sacrifice as a. Client, let's say you have to
do. Everything on your own.
You're calling the Subs because you.
Don't trust your builder. You are making all your own
selections. You are organizing everything.
You are calling the bank for your own construction loan draws
or whatever that looks like and. That is a huge amount of effort
from you, and in very little amount of effort from your
builder. And then the sacrifice.
Let's talk. About money and resources, say
you have designed a home that should cost $600,000.
For easy numbers, your builder does it.
For six million, that is an awful amount of sacrifice in
monetary value that you would have.
To have to incur, so that makes that denominator of the equation
a very large number. And drives the value down
significantly if you have a huge.
Time delay and also a lot of money and a lot of effort and
your resources to get that job. Done.
So hopefully wrapping that up, that is supposed to be the.
Lower limit of this equation and would have a very.
Little almost 0 value score. Now let's switch.
And let's flip and let's go to maximum value and what we're
constantly trying to think about as Brevin Holmes and what your
builders should as well to drive the value.
Up as much as possible and almost make it a number that is
is very. Very large in value or almost
infinite as I keep saying so the.
Ultimate Top bookend, which could be if infinite would look
like this. Dream outcome would be your
absolutely perfect dream outcome.
Dream home every T crossed, every I dotted all the details
exactly like you expected. Them and exactly like you had
dreamed them. In your head.
That would be the first step. Times, perceived likelihood of
achievement, Every single interaction you had with your
builder and throughout the process, in the bank, in every
single trade partner, in everybody else that steps.
Foot or had any portion of interaction on your build just
gave you the. Best feeling you left.
Feeling confident you left. Feeling happy Exceeded your
expectations is a big thing. That would be a number.
Basically, your perceived likelihood of.
Achievement would be through the roof you would have.
Ultimate confidence in your builder and feel very very
likely that. They would achieve.
Your dream outcome. Now the bottom of the equation
on this upper end limit that we're thinking about is going to
be basically we're looking at time delay.
So if we could. Like I said, snap our fingers
and have you moved into that home tomorrow?
Not even tomorrow, actually. Let's say today.
That would be basically a 0. For your time delay.
So snap our fingers. You're moving into your dream
home on your lot right now. Times effort and sacrifice.
You have to produce zero effort because.
You're getting your dream outcome right now and you didn't
have to think about it. You didn't have to communicate.
You didn't have to have any heartache or stress.
You had zero. Effort there and sacrifices in a
monetary term. Say we gave you the house for
free. We say, hey look, this is. 0
zeroed out. Thank you for being you, and
here's a free home that would be.
Zero amount of sacrifice. So the bottom of the equation
would be a zero. A goose egg.
Which makes the value infinite because the bottom 2 numbers are
0 or anything. Times 0 is still.
Zero. So time delay or effort and
sacrifice either one of those is 0.
Then your value is infinite, so hopefully recapping this side of
the equation or this end. This is the ultimate value.
Now us as a builder, let's talk through.
It real quick and what your builder can do as well to drive
more more value here so. Top of the line value would
equal. In our opinion, the dream
outcome. So your builder is doing
everything they can with their. Team or their interior
selections or you know, designers, architecture, all
that stuff. Everything that that builder has
pulled. Together in their team and in
their interactions with you is ultimately there to help you
achieve. That dream outcome of your dream
home on your lot, It is a tough thing to do as a builder.
To We're not mind readers. I don't think anybody is, but
it's something that we have to do our.
Best and the clients have to do their best to communicate to us
and anytime there's communication involved and this
much communication to build a. Sometimes million or multi
$1,000,000 home. There's a lot of room for air
there. So the better communication your
builder has, the more organized they are.
All of that goes into dream outcome, which is your dream
home now. I also tied a little bit of that
in already, but your perceived. Likelihood of achievement?
How organized is your builder? Are they using construction
management software to keep everything above the table and
very transparent? Or is there communication?
Stellar is it. A 24 hour guarantee that if you
contact me we will have. 24 business hours get back to you
with the A. An answer, right?
Or some sort of update? You know, what are they doing to
make you feel better about that perceived likelihood of.
Achievement and and for us we also guarantee our results so.
We have a guarantee that. We are going to build your home
on time and on budget and that guarantee gives people that
peace. Of mind and also makes their
perceived likelihood of achievement go up significantly.
Because not only are we telling you that, not only can you call
our other homeowners and ask them that and they'll vouch for
it. But we can also guarantee it as
a business that if we don't do these things, then there's
recourse and you get some sort of, you know, compensation for
us not achieving or. Hitting those guarantees.
So that's all part of that perceived likelihood of.
Achievement and helps us to get to that.
Dream outcome. So on the bottom of the equation
we have time delay and time delay from a builder perspective
is ideally. We manage your build as
efficiently as possible and we put the right trades and
construction managers and everybody else in place so that.
We can build your home as quickly as possible, but also
with good quality, so that's why we use.
The word efficiently because it's not quick.
Quick gets the. Wrong connotation there, and
inefficient is a better use of the term.
So we build. As efficiently as possible by
using the best resources in our tool chest.
Basically our toolbox SO. Time delay, we're always working
on that. And to minimize basically the
time delays and ultimately the time to get you into your dream
home. Now we multiply that to get
effort. And sacrifice on the bottom
effort and sacrifice our goal is that.
When a client hires us to build their dream home, we are able to
do that. With minimal effort involved.
From them, you know, most of our clients have lives.
They have jobs. They have families, they have
other places. They want to spend their money.
And time and they don't want to be micromanaging the build for
the most part, you know and and there's that couple that want to
be all hands on deck but for the most.
Part People hire us because. They don't want to build their
own custom home. They don't know how to.
They want our expertise. And you know they want to have
the least amount of effort, but also just have that.
Trust in their builder that things are going to get done
right and going to get done timely and within their budget.
So that's the effort. Part and sacrifice would be.
In my opinion, basically the. Least amount of money possible.
Now that's a tough one. You know, as you start cutting
money, you also start. Cutting potentially quality and
speed, so that's a trifecta. There.
That we're always playing around with, but.
You know the least amount of money is possible.
So basically we're. Trying everything we can as a
builder to. Mitigate cost overruns or poor
management which results in theft or vandalism or other
things that suck money and don't have a clear way to, you know,
point the finger at somebody. Basically it's falls back on the
builder and those are the kind of things that the builder has
to manage efficiently and effectively to mitigate.
And and that really helps overall, but.
The other thing with the money is that you know the the
builder. Should have established
relationships with trade partners, vendors, builder
accounts set up with lumber companies and concrete companies
and all that good stuff so that they're getting preferential
pricing as opposed to a A. Independent person that walks
into a concrete company and says, hey, I'm trying to pour a
foundation, you know, so the builder provides a lot of value
there that. As they have more experience and
more time in the business and are able to leverage.
Some relationships, more they're able to get.
Preferential pricing, So that helps with that money aspect as
well and that's a huge resource. From clients perspective, so all
that tying it all back in, that's what we're constantly.
Focused on trying to trying to maximize the top of the equation
and minimize the bottom of the equation so that we can drive as
much value to our clients as possible and any builder that
you seek to build your. Custom Home.
I would challenge you to keep this value.
Equation in mind and see how they stack up on each component.
You know, if you're unsure, or if there's things they're
telling you that sound fishy, dig into it more.
And if you dig into it more and it still sounds fishy or still
gives you a little. Bit of uneasiness.
Go find somebody else, right? That's the best.
Piece of advice I can tell you, but this value.
Equation is is very important because every builder is going
to price their products differently.
They're going to have different mark UPS.
They're going to have different everything about how they price
a custom project. And it's so hard to compare
apples to apples, so hopefully this value.
Equation helps. You have some sort of checklist
or? Basically a a benchmark to
compare them all to so overall. I just want to thank you guys a
bunch for listening to not only this episode, but all of our
episodes. I hope this episode. 16 By
myself wasn't just 30 minutes of me rambling, I hope.
You guys found value in this and if you did please do us a.
Favor and subscribe or follow us.
Or, you know, like our content on social media and especially
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You know, every one of them calls it something different,
but if you can subscribe and if you can throw us a rating or
review, that would be even. Better.
We're extremely grateful for five star reviews there.
Helps us get the word. Out to more people that are
building a custom home or want to build a custom home.
And we just hope that. Our content provides value and
knowledge to those folks, So the best way we can do that is to
ask you guys for that favor. So.
Thank you once again and thank you for listening to me for the
last 30 minutes of your time. We don't ever take that for
granted and since it is almost Thanksgiving, hope you guys have
a fantastic Thanksgiving with friends, family, loved ones and
we'll catch you guys on the next podcast.