This 40-year Veteran of Real Estate is Blazing Trails in Modular Housing: Mr. Larry Martin

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Bowling here with Pivotal Real Estate Investments and the Pivot to Prosperity podcast. And today we have a very special person, Larry Martin. And Larry has quite the background in real estate decades and decades. And I'm going to say right now you have to go to his website to read up on it. But so Larry, if you would go ahead and give us a short description of your background and what you're into now.

Sure. So I guess for real estate, just speaking in terms of real estate, I started buying land in, in the late 60s, 1960s and got interested in, in just buying pieces of raw land just as you know, investments waiting for the market to bring it up in value. I at one point in time was a studio musician and a backup vocal singer for a lot of folks in the would be in the late 60s. We all as musicians got tired of the bad facilities, outdated facilities. So I joined with a group of musicians to start building studios in San Francisco actually and then across the country that I graduated from that in the 70s to do some commercial real estate development or brokerage actually in California and Silicon Valley. Got involved with groups that were doing a lot of technical build to suits building silicon ingot growers and circuit board factories and then eventually into other special manufacturing high tech manufacturing facilities. You did a lot of brokerage until 1995. Started doing projects across the country that were all land development projects in in 2008 when we got hit with the market we got all. All of our projects although funded were all taken away from us by by fdic. They were all called due because the banks loaned us the money had loaned beyond their abilities to to meet the the Fed's requirements. Got into looking closer at markets to kind of get find where there would be some way for me to even survive. And 2010 was not a good year for me. Lost a lot of of my momentum and didn't really get back on top of it until 2012. So since then I've been doing a number of projects that are all land development projects. I'm a, I'm a landman. So I start with the dirt. I have two partners that are civil engineers and, and bank ex bank presidents. And so we're producing projects that either we're going to build or somebody else will build for the marketplace. And I think right now, the last three years I've been working specifically on modular construction technologies. And I think that that's actually the wave of the future. My current projects are looking like about a 300,000 square foot modular factory build to suit for devel at D V E-L-E.com and, and to build modular housing of all, all kinds from single family to multi family. And that brings me to my history now. So yeah, I spent, spend a lot of time in the Sierras and Incline Village and Reno. Love to drive, drive pretty looking at markets. I'm always before I do business with somebody, I want to meet them before I do any work on any piece of land I want to walk on. So that's, that's who I am. And I'm always a lot of fun. You can always count on fun. If I come to visit you, we're all going to laugh together.

Well, and I know that's right because we're both members of the same mastermind and I hear you and see you and I see that's true and it's a remarkable background and, and I think that the fact that you have partners with so much experience as well really speaks volumes to your ability to get into and handle any kind of fluctuations in the market. Because as we were talking before we got on, I'm from the 80s as well and we've been through some cycles and kind of know what to watch for. Excuse me, I think that I wanted to take you back for a second. Did you say you're, you're building the manufacturing facility for Devel to then manufacture these components that you will be utilizing through you or some partnership thereof to actually build out the properties? Right?

Yeah. So I found Devel about a year and a half ago and they had already built a factory in Los Angeles, they just opened one in Mexico. They're in the process of building another one in Montana and I have proposed to build one for them in northern Nevada and we're in conversation about building seven others across the country. So Devel is pretty much cutting edge. They are using the cutting edge technologies both in manufacturing and in of just the quality of life inside one of their products once it's built. It's a green product that meets all of the, what the social demands are for, for our, our current society. And, and we're beginning to, to get a lot of traction with governmental officials and possibilities. So it's, it's an updated product and it's beginning to catch up to what you see in Europe or in, in other parts of the world. China has been pretty, pretty way ahead of the game too as well. So. But we're so far behind in housing that we need to somehow convert from site built to, to factory built to modular to off site built. So that's that's kind of why we're, why I'm working on it, why I'm focused on it.

So in Florida it's sometimes embarrassing that we take so long to build things because we have good weather year round. Yeah, I'm gonna have to say it's because of the heat, but. So a house would normally be six maybe nine months, probably more times than not closer to nine months. And what's the typical construction time for you?

Well, once we have, for a lot of reasons we, we shorten its time difference. So cost is the same per square foot, but we can get it done quicker. We can get it done in sometimes 40 to 60% less time that site built requires. Our, My current goal is to get product from concept from the time that somebody wants a house to the time they can move into it. Literally occupied 120 days. So we're trying to do it in four months instead of nine months. And actually nine months is on the short side for a lot of reasons. So you know what we're seeing in our markets here is, is much longer periods of time, nine to 14 months to get into a house, stick built, site built. So it's a, it's a savings of time and that's where the, the economy comes in and the ability to compete with site built, not to mention quality. I can't beat a factory built house. Every piece is the same size. The efficiencies are hard to beat. We're, we're at 2% waste and stick built is somewhere around 15%. We can even use a lot of our waste, remanufacture it into engineered lumber and those kinds of things were robotic for the most part for the, there's, you know, panels and, but, but good employment, really great employment. So.

Meaning people.

Yeah, we, we still hire the same number of people on site that you would see, but they're in a warm factory working whatever shift they want and they get trained up to go out into the field and become part of the crews. That's a rigging crew and a crew of finishers that go out to the site and actually install the house. Installation of a single family house is usually no more than two weeks. And the biggest issue is the final inspection by a local inspector. All of our product is inspected in the factory according to a standardized inspection that's acceptable across the country. So we're not quite there yet, but we're awfully close to it. I, I think I can build a better product, get more available for occupancy in a shorter Period of time for the same cost. And I think that's, as we move through this, I think our efficiencies will get better and cost will come down and qualities will go up.

So let me ask. That was a broad statement there too. Excuse me. On. So in Florida here we have the southern building code for hurricanes up to Cat 5. And yet in, in Tornado Alley and other places, there's all kinds of other considerations. Are, are the building codes, is there any one that you particularly build towards that satisfies all or.

Yeah, there's a national code, actually it's an international code. But our use of materials, we don't use wood for superstructures. We're using metal. And so that 200 mile an hour wind standard that a lot of people are aiming at in Florida, we're already there. And so we don't, we don't have those considerations. It's snow loads, all of those things are not a problem for us just based upon the choice of materials that we're using. Our materials don't change either from hot or cold or moisture or any of that because they, they maintain a, a, a stable configuration from the time that they're finished manufacturing for a hundred years. Not 40 years, 100 years. So that, and that, that's not anything new. I think it's just a, a, a use of new materials or new exterior materials that are lighter and stronger and, and more water resistant, that don't rot. Steel superstructure, you know, you don't have to worry about termites and you don't have to worry about, you know, the change of the structure based upon moisture in the air. It's, it's very, very stable, pretty inert.

So what material is actually used? Is there a drywall component or is it, I mean, what is the actual same drywall?

No difference. And same material for insulation. The difference is not using wood studs, steel studs. So steel studs come at the, at the exact length. They're all the same. So you're not having to, to cut a bunch of wood or, and they, they don't twist and, and they, they aren't checked and, and maybe not properly dried, any of that. They're so consistent that, and it's the same space and, and they go together quickly. Every, all the attachments to them are metal. They have a lot more ability to take the infrastructure, the electrical and the rest of it. It's all built into the stud before you even use it. So just that alone makes the difference. A lot of the concretes that we're Using now are plastic concretes. They still take about the same amount of time to dry, but they're much stronger and are less likely to be affected by weather and water. Same cost, not any different. Some, some of the new forms that are used for foundations actually insulate the foundation. They go together in real quick light blocks and, and they're quick and easy to fill. And you don't have to do any of the, you know, special insulating on the outside or special surfaces to prevent check, checking and freezing and the rest of it. So the technologies all exist. It's how you put it together.

So, so let me take you further on that because I think at one point you mentioned that you could do 30 floors.

Yeah, right. Now it's been ongoing now in other parts of the world. In Europe for instance, if you go to Scandinavian countries, you'll find a lot of high rises that are, or mid rise apartment buildings and a lot of other buildings that are built modular. And that's just really a matter of, of putting together a structural engineer with your plan to build. And some of the superstructures are the same. It will be steel I beams that can accommodate a pre manufactured 60 foot module. For instance. You can go online to YouTube and take a look and see it's not unusual at all to see 10 floors of Modular. And I know of several projects in San Jose that are planned to be 26, 27 floors. So. And in China you can see, you can see that they have been, they, they've overbuilt. They have so much that's overbuilt. A large part of it now is modular. And what's neat about modular is if it doesn't fit the configuration, it doesn't it, you can take it all apart and move it so someplace else doesn't matter. You just need a crane to, to do the work, to put it all together. So you know it's, it's a new new deal all the way around.

It is. So when I scroll through the site for that company, deville, most of it's single or two story homes. But for your, for what you're doing, are you planning to do multifamily or single or mix or what do you do?

Right. Well my, my partners and I have already committed to 1250 units for devel to build and they start with single family for rent and, and three story townhouses and then they progress to two story and three story walk ups in the process. We are beginning to work on, on product that can go to California where it's going to go from 5 units per acre to 100 units and those require 10 floors and so we're going to engineer those. There are plenty of companies across the United States that are building modular that you can stack up that high. A lot of the current hotels or motels that you see around are, are being built as modular and they have been for 20 years on the east coast really. So, so we're. And the only problem with them is they don't have a lot of architect architectural flair. Well, with all of the new design software, you know it's. It's pretty easy to integrate great design, attractive design and features into a real stable platform that can be stacked up. So we're working on it and we, we're not too far away from doing what we want to do across the board in all sectors of real estate development.

So do you have any pictures that you could share? I didn't think to ask you for that. I. I can show.

I wish we had talked a little earlier.

Yeah, we should have. So what I can do right now actually is share my screen to show their product and so yeah, we'll do that. And can you see my screen?

Oh yeah, no problem.

Okay. So I'm down towards the lower part of their.

Sure.

I think I am on their profiles but so you can see you can stack these easy.

Yes, sure.

And one on top of the other and has some decent character to the, to the properties.

Yes.

And yeah I've certainly seen multi floor, you know the 10 story. Ish. I didn't realize hotels have been doing it for a while but especially if you're talking higher density. I'd love to see your profiles elevations and I can add those actually to the. When we put this podcast live, give you some links and whatnot to help people know. Sure.

But yeah, you know deville also has. This is one of their links and this is their single family link. They also have a mini series that talks about adus smaller units and they have another one that's custom. So the finest built house I have ever seen in my entire life seriously is built in Santa Rosa. It's 3600ft and it's all glass and it. The glass is lots of views and lots of. It's off the grid. It's 10 foot ceilings, the best appliances built for half the price that it would cost you to stick build the same thing. For instance in Incline village you'd pay 1500 dollars a foot for it. It's $730 a foot for the house that they build now I have those pictures and I'm happy to send you a, a link to the the album that will show that. But that quality is available and they also do a real nice little 450 square foot unit that is installed up in Truckee above Lake Tahoe and west of of Reno. That's a nice unit that is perfect for a weekend. That has a kind of a sleeping loft that's four feet tall. But a nice, nice little unit that is again the cost is around $400 a foot but compares in the marketplace to stick built turnkey stick built. So you know we're looking at, at costs for single family stick built single family as low as $150 a foot foot. Before you buy the land, before you go through all the entitlements, the rest of it, the turnkey cost, then that's probably 250 a foot and we can meet that cost. And if you'll give us another $30 a foot, we'll eliminate your utility bill. So in our neighborhood in our right now, my bill in my 1200 square foot office every month for utilities or for, for electricity is 150 bucks a month. Now if I had a developed building here, it wouldn't cost me anything.

Well that's really. Yeah. Something to think about for sure.

Yeah. Yeah.

So where are you at right now with. Do you have something coming out of the ground just yet on this?

Yeah, it's true. Well, there is a factory that's going up. Another thing that we're doing too is we're not looking at doing if we can get away with it. We're trying our best. If we don't, if we can do something other than concrete tilt up factory buildings, we would like to use sprung buildings which have been in business for 100 years. And what they can offer is they offer a tempered aluminum frame superstructure that can create 150ft of clear height. So we can, we can do whatever we want inside. 150 foot wide width. Happy to send you a graphic of what that factory looks like. And the advantages to that are is they're insulated, they go up. And half the time that concrete tilt up does, you can modify them whenever you want. That you can write them off in 10 years instead of 27 years. And the they, they can adapt to new assembly lines. So we're working on, on utilizing that as the weather structure that the manufacturing can have it. But we're also looking at multi floor too where materials are brought in below it and brought up on elevators to that portion of the manufacturing line. A lot like how Tesla does its manufacturing. So, and we're next door to Tesla, so we get, we can work with them on, on helping a little bit and streamlining our engineering thoughts. And plus the owner, John. I'm sorry. Kirk Goodjohn of Devel has been working 16 years on, on cutting edge technology. So we're right on the threshold of an, of a new way to provide housing. Much higher quality, much more comfortable, more efficient. Right, right, right on the edge of it. I'm going to say in the next 18 months, it will be a standard.

That would be phenomenal. Yeah, yeah, I, I got introduced to it probably 20 years ago. A good friend of mine was, who's cutting edge was doing his homes in, in the prefab and his last home was phenomenal.

Sure.

But yeah, no, I, I get it now. The. You did say there's drywall and there's metal. So what's the structure between the two?

Dodge? It's. You screw it right to the metal. No, no problem. Basically, you create the frame, the, the, the wall frame just like you would wood, only it's in steel. And then you can put wallboard directly to it. You can put your insulation in and put wallboard to it. You can put exterior finishes on it. The only one you can't do is stucco because it won't travel over the road. And there are some new materials that are thinner and, and much more durable than things like hardy board, for instance, or wood siding, for that matter. Depends on what. Whatever you want it to look like. It can look like. So there's no difference in, in the manufacturing. It's actually quicker because everything is put together with screws. Less, less damage to carpenter's elbows. You know, they're not swinging a hammer and everything gets installed and, and preformed channels and routing pathways. So there's no difference. No difference in it. The subfloor is still wood. Carpet's the same. The cabinets that go into it are the same. All of the hardware is the same. No differences.

Interesting.

Interesting.

Well, we're coming up on our time here. I'm going to need to wrap it up, but I would love to talk some more after you get a little further down the road, too.

Yeah, sure.

So my big question is, can you tell us of a pivotal event or person or something that made a big difference in your life?

Oh, sure. There was a fellow that. I can't mention his name because I don't have his permission to, who taught me how to write a contract. And this is old developers and I learned how to, how to write a contract when I was, I think I was 24 years old. That that limits the risk in development and, and defines pretty clearly in simple terms a, a set of conditions that have been my survival in through this. There are so many opportunities to lose your money and, and, and, and expose yourself to a lot of risk. So that guy is, it is most important to me. I worked with a couple of engineers who just, they were thinking about things from all sectors and one of them is a fellow who runs the, the Kodak Theater in, in la and very good friend of mine. We've chatted a lot about his music industry but everything he does is having to do with lighting and sound and, and actual stages and how they're built and how mobility and all the rest of it. He taught me to be open minded about, about how to get things done on. My best friend is a woman who is a very successful businesswoman who owns properties across the country and how she manages things is the most, probably the most important thing I've learned. I've just learned all of that from her about two years ago but. And she provides for me a lot of inspiration and energy to get past my age to be reacting to new market adventures and possibilities at, you know, feeling 20 years younger. So those are my three. Do you need names?

No, no. That's great. That's great though. But also I should tell you one of the things that I do in this podcast is I have a special series of local legends and pivotal people. If you want to nominate somebody to be interviewed as a local legend. Yeah, you know, or what I would.

Say, I would say, you know, one that I didn't mention who would love to have his name mentioned is Hunter Thompson. And his, what he's done is a brand new technology that I think is cutting edge. If you don't pay attention to his, his technology, I think you're missing the boat on quick, efficient, solid, long term success. So I would say Hunter Thompson. There's a bunch of others in there too I could name. But Hunter is, I think he's, he's a leader of a new new era that you see him come and go and he's one that I think will be long lived, way beyond my years, I think.

And, and you're nominating him for, for which process in particular?

Since I know of a few for, for fundraising.

For fundraising.

Fundraising and actually even project management. You know, how you manage your property. He's across the board has insights in markets and how to deal with them, how to raise the money and how to manage that, where the soft spots and sweet spots are in the marketplace. He's a smart man.

All right. I will let him know you nominated them. Very good. So, Larry, tell people how they can reach you and we'll put it in the show notes.

Well, the best way is to go to LarryRmartin.com and see the, the all of my, my connections, anybody that reaches me typically and, and has an interest in doing business with me gets all of my contact information. And you can always book time on my calendar. I leave open. It's open to everybody. You, you are have that experience with it time those times. So. And I would give you my phone number, too. It's, it's 408-888-6122. And I don't answer every phone call, but if you leave a message and it's important enough, I'll make sure I get back to you.

Great. Great. Well, so good to have that discussion finally. I really had been wanting to get you on and I appreciate you coming on Larry. So I will be letting you know when we're ready to air it and add all those goodies into the show notes.

Sure. Absolutely. Well, thank you for your time. I really appreciate the opportunity.

Good. Well, thank you. Take care.

Bye. Bye.