Meet Justin Bauer, President of Clarity Construction and Epcon Franchise Builder in Ankeny, Iowa.
Justin Bauer knows that running a home building business is not for the faint of heart, but that if you work hard and have the right people in place, the Epcon Franchising business model works. In his words, “Every year, I decide to stay with Epcon, because it’s that valuable.”
Host: Today we’re here with Justin Bauer, president and managing partner at Clarity Construction based in Ankeny, Iowa. I was wonder if you could start by telling us a bit about how you got started in home building?
Justin Bauer: So I actually was a golf pro. I graduated form Iowa State University with a MIS degree. I was in the golf business until 2002. While I was in the golf business, I would occasionally finish basements in the winter during down times. A local builder came and talked to me and wanted to hire me. So I went to work for Kimberly Development in Ankeny, Iowa. I worked for him for six years. We built over 300 homes while I was with him. Basically 300 and up homes – 50 a year on average.
In 2008, I came to this “Y” in the road and I am either going to stay here and work for him for the rest of my life , or I try this and do it on my own. So, my last day was on September 15th of ‘08 and the market crashed on the 27th. But I did have a project lined up. I did a pool house, a commercial project at a local Briarwood country club. They were going from public to private. I also did a church remodel in addition in Des Moines in ‘09. 2010, I got into the Home Show Expo. We have a Home Show Expo in Des Moines, Iowa that usually boasts ten homes that are fully furnished. Approximately 10 to 15 thousand people come tour them during a week. I got in that show and actually won Best of Show. So, they have awards that they give out. From that point, it just kind of blew up. Since 2010, I’ve built 33 custom homes ranging from $400,000 to 3 million.
Doing custom is very rewarding, but it’s also a lot of work. There’s not necessarily a lot of profit margins. Not that I didn’t make a good living – I did. But coming to Epcon was an opportunity to do something bigger. It’s coming true here.
Host: You really had quite the change coming from being in the golf industry to becoming a custom home builder. Where did Epcon come into this?
Justin: Doing custom is a lot of work. So, I came to the conclusion that I had “x” amount of hours in the day, week, month, year. What can I do with that time? I guess I have the confidence to feel like I am going to be successful in whatever I do. And so if I have an opportunity to make more money with that time, why wouldn’t I do that? And that’s where Epcon came in – maximizing my efficiency with my time equal to your profits.
Host: So, were you looking for production opportunities?
Justin: You know, I wasn’t really looking. I had a local realtor who brought it up to my attention to start with. He wanted to partner up. I found out kind of early on, especially templating from what Epcon does, you guys don’t use realty companies to list your product. So, there was an issue right away when you start talking about a 27 million dollar project and do your 3% on that. That’s a lot of money. It didn’t really work out with us.
A gentleman that I had built a house for in 2011, Chris Cornelius, we became friends after I built his house. He’s in the financial world and he was looking for something to kind of diversify where his funds were, where his money was. That’s how we partnered up. That’s where it started. We ended up adding a third partner, Sean Edwards, a friend and subcontractor. He owns a landscape company in Ankeny. I’ve used Sean for years, we’ve been friends for years and we added him as a third partner. So, it’s the three of us that ended up taking on this venture.
I’d say I wasn’t necessarily looking for production opportunity. Again, I think it just came. I wasn’t really understanding how inefficient I was with my time when I was doing custom houses. It wasn’t like I wasn’t making money. I just had an opportunity after this came up and I researched it. Obviously, the statistic that we repeat time and time again is 10,000 people per day turn 65 and retire. When you start analyzing those numbers, that’s a lot of clients. I think what happened is through that vetting process of ‘is this something I want to do?’ I realized the potential of what I could do with my time and that’s when I decided to pull the trigger on it.
Host: So if you would, talk about the process of how you came to know Epcon.
Justin: So Dave did an Epcon development in Ankeny. That’s where I first became aware of it. At first, I thought, “I don’t need Epcon. I can develop my own plans, do my own marketing, build my own club house plan.” It was a combination of Jason Coffee being persistent along with, what probably put me over the top, was talking with Jamie Wilcox, who’s an Epcon Franchise Builder. He made me aware of how many units he does in a year and that, yes, it is a lot of money that you pay to Epcon, but he vowed that it was well worth it.
That phone call is probably what got me to buy the plane ticket to come out here. Once I was here, it was like that. It was instantaneous. From meeting Nanette up to Phil and Ed, class-act organization from top to bottom. I think it really does bleed from the top-down as far as the quality of people you have with Epcon and what I think Phil and Ed obviously expect from employees, but also how they treat employees. It seems like a very friendly organization. Every time I’m here people are happy. They’re excited. Phil obviously is very exciting. I think that rubs off on people – that energy and excitement really rubs off on everyone, from people in corporate to salespeople in the field to Franchise Builders. It was a two-day event when I was here the first time and really after the first day, I told Chris, we were both here together, I said “We’re doing this.”
Host: You’ve been a home builder. So what were you expecting coming into Epcon and then what did you experience?
Justin: Like I said earlier, at first I thought, ‘I don’t need Epcon, I can do this by myself.’ At the time I had almost 15 years experience building. I knew how to do this. I considered myself a good builder. From my custom side, I had a referral list. It’s been my goal that I can have every client on my referral list and I accomplished that. But until I was here and started going through orientation, came back for sales training, went to the Fortwo, I mean I wish I would have taken the Fortwo 15 years ago, I’ve learned in two years that I didn’t know at all. I think in the construction world, as a general contractor and even as a subcontractor or people who work in construction, sometimes you get stuck doing something a certain way. You think that’s the only way and you think it’s the right way because it’s been successful, but how successful? Could I actually make 13% instead of 12%? Can I get to 15%? I have a happy customer; can I have a happier customer? The wealth of knowledge I’ve learned just in two years, I can’t imagine 10 years from now how much better of a builder I’ll be because of what I’m learning here at Epcon.
Host: So talk to me about when you came into the system. Did your plans change? What are your plans moving forward?
Justin: I probably have to curb my enthusiasm a little bit because a year ago, right now, is when we poured the streets and started our model home. April 25th, I believe it was, we had our model home completed and furnished and we had an open house. We had the clubhouse done and furnished June 27th. So we weren’t really able to pre-sell like corporate does here in Columbus for a few reasons. There wasn’t really one to look at. Dave had done it but Dave’s was different – he had vinyl siding, his clubhouse was different, he customized a lot of things. He had a lot of daylights and walkouts which were more flat. We do have a few daylights. So, we weren’t really able to pre-sell like I was hoping to. But here it is, February 14th of ‘17 and I really consider our start date May 1st of ‘16, so 9-months about, and we’ve sold nineteen units. I consider that to be a pretty big success.
The real exciting part is we have five people living there now. Of those five people, we already have four people of the nineteen that are referrals that came from those folks. I always thought this would happen, but to see it come true is extremely exciting. So from here, I actually in two days when I go home, I have a meeting with a West Des Moines community and two other developers that have a piece of ground that we think will work for us. We think it’s an A-site. If it goes well, I think we could have it under contract inside of a month and moving during inside of this summer. I think right off the bat we will have 10 pre-sales. West Des Moines will go faster than Akeny did just because demographics and people moving from out of town typically prefer West Des Moines. I’m sure same thing here, in Columbus, there’s probably an area that people prefer if they’re out of town – there’s probably a spot they go to. West Des Moines is that spot in Des Moines. And so I am extremely excited that I think two years from now we could be building 60 units a year in Des Moines.
My goal is to build a thousand of these in the Des Moines market in the next ten years. Lofty, probably. Obviously there is going to be a slowdown. Things are hot now, but I’d be kidding myself if I didn’t think there is going to be some sort of hiccup in the next ten years. We’ll see how that goes. But if things continue like this, I think that’s an achievable goal.
Host: Now let’s talk a little bit about your home buyers. How has serving the 55+ market impacted you both as a builder and as a person?
Justin: You know, I’ve done a lot of really nice custom houses. And I’ve built for a lot of really nice people. They’re always excited. I mean, imagine building a $700,000 house. They are moving from something that’s maybe $300,000. They’re moving up. Of course, custom is a longer process – six to eight months down the road, sometimes a year from the time you start working with someone. When they walk in that house and see it and the smiles on their face are obviously rewarding.
The 55 and older group here and our people that are moving here, I can’t explain the excitement. It’s something more even about the home you’re moving into, it’s about the point of their life that they got to. It’s the point in their life where they can relax, have fun, less worries, no more work and really enjoy life and they are excited about that. So it’s not only that they are excited about the house but they are excited that they got to this point in their life.
Host: Really beyond the product, what differentiates you as a home builder?
Justin: I try to the do the right thing, I think that’s what it all amounts to. I am a people pleaser, so I want people to be happy. On my custom home side, I never fretted about having to spend an extra $1,000 to make someone happy. That’s marketing in the future, that’s cheap marketing. With these people it is a little different scenario. We have more standard options; we don’t do as much customization. But at the end of the day, I want to do the right thing. I want people to be happy and live in a quality home. I want them to be able to walk out of their house and tell the next person that they are proud of the home that they live in. A lot of that becomes about pride and being able to be proud of where you’re living.
Host: Is your company doing any local outreach?
Justin: A few years ago, I donated the profits from one of my Home Show houses to an organization called Homes for Hope. They take that money and they go to third-world countries and they give people loans. So rather than dropping off food, dropping off clothes, whatever it may be, they actually have these people from third-world countries that turn into them a business plan. They then have to go out and they get a group of three to four people that will guarantee them, so let’s say they live in a village – Homes for Hope’s guarantee is the three or four people that is their partners. They may have loans on something else.
For example, I know one gal opened a grocery store. Now when I say grocery store, this is a stand on the side of a road. But Homes for Hope and the loans that they are giving these people, it could be as low as $200, but they are a lower amount. They are not loans that you and I try to get for a new house or a new car–think of all the things that we buy–they are smaller amounts. They are giving these people a chance to not just quick-fix, not just give them food for that day or shelter that’s going to last a year or whatever. They are giving them an opportunity to create a business to help them prosper and make money and make a living. So I did that in 2012. I wouldn’t mind possibly doing it again and Epcon would be a great opportunity to do something like that.
Host: Finally, what would you say to a potential Epcon Franchise Builder?
Justin: I would say you have the opportunity to change your life. I think it can be life changing for the opportunity of what Epcon provides – the demand, the excitement and back to pride. I’m proud to be a Franchise Builder. We’re at this conference this weekend and I spoke earlier about from the top-down, Phil and Ed, down to everyone in corporate, down to sales, how quality of a company it is. Every Franchise Builder I’ve met here has been top-notch as well. I think that continues to bleed down from the top.
I don’t know exactly what Phil and Ed’s qualifications are for accepting someone as a Franchise Builder, but I think there are some high standards there and that’s for a reason. I don’t think they let just anyone into this Franchise and I think that really shows.
But to a new Franchise Builder or someone who is applying to be a Franchise Builder, it’s really exciting. There is a big, big opportunity to build a lot of houses, make a lot of people happy and ultimately you make money too. Let’s not kid ourselves, that’s why we’re here, right? We all try to make money. Anytime you can make money and make people happy at the same time, to me, what better job?