Interview With Ryan McCue of NEO HOMZ

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Interview Transcript


Ryan McCue, NEO HOMZ

Bo Birkeland

Bo Birkeland, VP of Sales

Bo: Tell me a little bit about your background:

Ryan: Yeah, so my background is just construction. Been working on houses since I was in diapers. Flipped my first kitchen when I was twelve, flipped my first house when I was 19, and doing fix and flips, remodels new construction my whole life back. My education is real estate construction management.

Started my business about five years ago.

And been trying to focus on kind of new and improved materials to drive the industry forward versus using old and outdated systems just because that’s what people are comfortable with.

Bo: Let’s just quickly recap the project you worked on us with. You started with us when?

Ryan: Spring 2022

Bo: Can you just briefly describe the project we completed?

Ryan: So this project we did in Arvada was a unique project.

It’s an accessory dwelling unit (ADU) utilizing your guys’ foundation system, but using it for the above grade walls as well. The concept being the foundation and the framing could be done in a fraction of the time versus standard stick built. And the ease of use of it did not require all the subsequent contractors coming in after the fact to learn a new system. They could use all wood tools and materials and fasteners and everything just as they would, as if it were stick built construction. It just made it easier. Specifically plumbing, underground plumbing coming in through the foundation. They didn’t need a core drill to get their plumbing line through. It was just a simple wood drill. They had it done in a fraction of the time. That saves time. Oh my God. Huge time. They didn’t have to go rent the core drill to cut through the six inches of concrete. They used a wood drill and they were like, it really like butter. And they had it done in five minutes rather than like 3 hours.

And so the guys were done in the afternoon versus being there till the evening and they were super thrilled with it. They’re like, this is the easiest foundation we’ve ever dealt with.

Bo: Okay, and so all your previous projects, you’ve used concrete?

Ryan: Right.

Bo: So what compelled you to go with our system? Like, what frustrations have you had with concrete in the past?

Ryan: Yeah, so concrete is very volatile to the economy. As oil and gas prices increase, so does the price of concrete. Not only the price to produce the concrete, but the price to deliver it. You’re relying on diesel trucks to transport and deliver the concrete. And the higher the gas prices, the higher the prices are to deliver that.

You’re also limited to a schedule within the year. There gets to be a point during the winter that you’re no longer really able to pour concrete because of the temperatures or you have a lot of onsite logistics and materials and equipment to protect the site, to heat it, things like that, just so that you can pour if you’re really stuck to a time schedule.

And then on top of that, just the fact that this type of foundation would go in in a matter of a day, depending on the size of the project. It significantly cuts down on the time of the project.

The big, time wasters on a project are those upfront type portions of the project. The foundation, the excavation, the framing, things like that. Those take up the most amount of time up until the very end of the project. When you’re doing punch list stuff and it’s having all these subcontractors come in and adjust and fix things versus having this system, it cut down on material waste, which cut down on the reliance and vulnerability with the market. It cut down on the schedule. It cut down on the number of skilled labors that you had to have and its ease of use with other contractors coming in, electricians, plumbers, HVAC. They were able to use it just like it was would versus having to have specialty equipment to work with concrete.

Bo: Okay, so what you’re saying is cut down on the time significantly and also, for the tradespeople, it wasn’t like a big change in how they had to do things. In fact, it made their jobs easier.

Ryan: It didn’t require them to learn new systems or utilize specialty equipment to deal with the concrete. It allowed them to get their job done and move on to the next project, which was a benefit for everybody.

Bo: And I’m guessing that saved money?

Ryan: Across the board.

For the clients, for the contractors, for the subcontractors.

Bo: So, what do you think the impact of working with us has been overall? And also, there was a little bit of a hiccup with the setbacks. So, if you could also just go into a little bit of detail and explain what happened there.

Ryan: Yeah, I mean, just to start off with the benefits of working with you guys, the ability to sell to clients that we can cut down on their timeline.

As far as the build schedule significantly upfront, the cost was not significantly higher than concrete is currently. A concrete’s lowest point, it couldn’t compete with concrete price wise, but it still cuts down on the schedule, which in construction and everything else, time is money.

Being able to cut down on that schedule means you’re not having all the holding costs and financing fees and everything that goes into having a project extend beyond its timeline or even the standard timeline. Being able to cut a month out of construction at the beginning because you’re cutting out inspections, different requirements for installation and excavation, things like that.

On top of that, construction has problems. Right since the beginning of time building the pyramids, nothing has ever been constructed without any problems. Problems happen. That’s why contractors are here, it’s not because construction is theoretically able to be done perfectly. It’s because they know problems happen. We’re here to be problem solvers.

This system allowed us, because of a simple mistake on the setbacks of the property, we were able to adjust the location of this foundation in a matter of an afternoon versus if it were concrete, we would have had to completely demolish what was done and start completely over.

And that would have doubled the cost of the foundation because we would have had to start over as well as add to the demo and removal of the existing foundation that we quoted correctly. So instead of it being triple the cost, it only was a fraction of the cost increase just to move the structure. So that ability alone allowed us to have more flexibility. And when a problem does happen, we can fix it a lot faster, a lot cheaper, and actually be able to fix it versus having to scrape and start over.

Bo: If you just had to put a ballpark number on what it saved you in cost compared to concrete…

Ryan: For that, just giving a guesstimate was $20,000. If it were concrete, it would have been the same price. I would have had to eat that $20,000. I would have had to pay another $5,000 to have it removed and then pay another $20,000 to reinstall that. So it would have been $25,000 that I would have had to eat in that project. That project was already super tight on the budget anyway. That would have made me lose my shirt on this project. Instead, going with the Modco System, it cost me just $3,000 to move it in an afternoon. It did not delay the schedule at all.

Bo: That’s pretty incredible. So where did you first hear about us? What piqued your interest?

Ryan: When I first heard about you guys it was at one of the tiny home shows. When you approached us, we then we went and saw your system, and then I looked it up. I didn’t think much of it because we were focusing more on tiny homes on wheels, but that’s what made me think about using your system for above ground.

Rather than it be a foundation solution, I thought, hey, we could throw their situation, their system on a trailer and have this thing framed, insulated and very structurally sound in a day versus the two weeks that it would have taken me to frame my house in the first place. And so that was a benefit right off the bat. However, putting it on a trailer meant all regulations, all certifications, all licenses, all code compliance was out the window. And it would come down primarily to just me saying, yeah, this will work. Because when you put it on wheels, there was no compliance regulations to abide by. All code compliance went out the window. That’s why they were putting them on wheels.

Bo: Oh, you’re saying when you’re building a tiny house when you build a tiny house?

Ryan: A tiny house on wheels. That’s why the number of tiny home builders during 2015 to 2019 skyrocketed. I was seeing on average of like ten to 20 new builders a year coming out of the tiny home builders specifically because they were not required to be licensed. Your background could be anything. Literally a guy who used to be a jeweler and decided to build tiny homes.

Bo: That’s not good. That’s not really who you want building.

Ryan: So having looked at that and then being in my tiny home building business, most every client that approached us to build a tiny house after our investigation and looking into their goals and objectives for their project, it made more sense to do it on a foundation because it was an investment opportunity at that point. You tie it to a foundation, tie it to land, it’s going to appreciate in value versus putting it on wheels, it’s only going to depreciate. They’re going to lose money on it guaranteed.

So every project we did, we ended up doing on a foundation because it was a better investment (for our clients). They were looking to do it as an investment, a short-term rental, or have it as a place for family and friends to stay when they were visiting, or it be somewhere that they wanted to stay and be on somebody else’s on somebody else’s property. But across the board, it was better to spend money on a foundation. If you’re spending upwards of $100,000, I’d rather make sure that I can make that $100,000 back versus just watching it burn up in the fireplace (as a tiny home on wheels).

And so, when we were looking at it in that way, we figured it makes the framing go up easier because it’s a panelized the system. If you can do that as a foundation, which was the original concept of that, of the Modco System in the first place, why couldn’t we just go above ground and have one of these smaller units be framed up in a matter of a couple of days versus a month or several weeks?

And so again, cutting down on that timeline for the construction schedule and whereby cutting down significantly on the cost to build.

The big issue in all of housing right now is affordable housing. The issue with affordable housing is the cost to build. As costs (supplies) go up, the cost to build goes up. And so it therefore becomes unaffordable. However, if you can build these things and they’re no longer custom, they’re prefab and they can be constructed very, very quickly in any climate zone…I mean, that’s the future of building right there. That’s what they’re trying to do with modular construction.

The unfortunate part of (modular construction) is that it is very specific to the location. Texas builders can’t build a modular home that can be placed in Colorado because they’re installation requirements. There snow load requirements, they’re load requirements. If we build it to the highest load requirement that Colorado has, it’ll be accepted everywhere country.

Bo: So last couple of questions. How likely are you to recommend us?

Ryan: 100%. Absolutely. I think this is the future of foundations, of building. And it just makes way more sense.

Bo: I remember you said something about Elon Musk and going to Mars and building homes.

Ryan: I’m hesitant to say that to people because my dreams are pretty lofty as far as that goes. And when you tell people, you talk to people about building on Mars, they’re like, well, I’m just trying to build my next house. I’m not trying to think about that far in advance. The application is exactly what they’re looking for. Something that is cheap, affordable, and easy to install that can be used across a platform beyond what we’re even doing here.

I mean, this is something that we can use in every climate zone in the United States. This is stuff that you could ship out in a container out to Africa, South America, Asia, and be affordable housing that can be built on the spot. This is something that you can be shipping up to the moon and building space model and space structures out on Mars, especially if you can get this to be a machine developed that they can get 3D printed. because that’s ultimately what they’re doing. They’ve already awarded it to ICON in Texas, they are developing 3D printed homes to be built on Mars.

Bo: That’s interesting. And why should someone listening go with our system versus concrete?

Ryan: Time, money, and ease of use are the top three. Ease of use across the board. Even when contractors aren’t used to using the system, you tell them it’s just like wood. Their drills, their screws, everything applies just like it would using wood. Plus you are saving a ton of time. And because of that, it’s a more affordable product, especially with prices the way they are right now.

Bo: So, you’re saying it’s not any different than what’s currently being used by the contractors (and trades people) that are working on foundations?

Ryan: People that are working standard foundations for single home, for single family construction, yes.

Bo: Garages, ADUs?

Ryan: Absolutely. Especially in the affordable home market.

Bo: Awesome. Last question. Anything we can do to improve?

Ryan: Just getting the word out there. I mean, letting people know, letting builders know, just allowing people to understand what those benefits are, that’s been the biggest hindrance for us as far as sales and talking to the clients is, they’re just not used to the concept and anything new people are hesitant to use. And so, having the education and the systems available for people to understand the benefits of this, I think, will go a long way.

Bo: Yeah, I’d say there’s a lot of people that are afraid to use a new product and a new system, especially for their foundation. But for you, that wasn’t a roadblock.

Ryan: It wasn’t a roadblock because you guys had the ICC certification already. The International Code Council had already looked at this and said, yes, this applies. Literally at our Arvada project, I have never had an inspector be so thorough with his inspection as this. He literally would make me pull out nails and screws to show him the type of fasteners that were going into this.

And every single time we were able to look back at the ICC certification, and he was able to reference that and say, yes, everything here checks out. It was the most intense inspection I’ve ever had. And it went off without a hitch because all the I’s were dotted, all the T’s were crossed, and everything was documented and he was able to say, this is great. I’ve been doing this for 30 years, and I’ve never seen anything like this. And he passes us right there.

Bo: Well, that’s another good testimonial. The inspector being impressed.

Ryan: Absolutely.

Being a new system and them coming in and being like, this is great. It does all the stuff, and it has all the things that we require as far as the fasteners, the Simpson ties and things like that. And then just having everything in that book, it made it so much faster. And it negated several other inspections that would have been required if we had gone with a concrete foundation.

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