Home builders and remodelers are now working with an extended production times because of labor and supply chain shortages. This has caused major headaches for scheduling projects including dealing with rising costs and increased customer dissatisfaction. The big question now is,

How should builders adjust project management today in order to keep clients happy?

Jeremy Skogquist from NIH Homes walks us through how his company has adjusted their project management practices to keep jobs on schedule and manage price volatility.

If you’re looking for more information on how to manage your construction projects in a hyperinflationary market, be sure to watch or listen to the latest episode of Conversations that Convert.

Builder Lead Lead Converter frees up time for home builders & remodelers so they can grow sales revenue and margins while navigating supply chain and labor market issues. Find out how https://www.builderleadconverter.com/

Transcript:

Today in conversations that convert, we’re gonna talk about building in a hyperinflation market and the new rules for project management. So let’s get started.

Welcome to conversations that convert every week, we’ll spend about 10 to 15 minutes tackling relevant lead generation marketing and sales topics for remodelers, home improvement companies, and home builders. Conversations that Convert is brought to you by builder lead converter, your perfect sales assistant.

And now here’s Rick and Daiana. 

Rick: Hey, welcome everyone. Thanks for joining us today. Daiana is off, but we do have a special guest. We will be introducing it shortly. Today’s topic is building in a hyperinflation market and new rules for project management. I’d like to introduce our special guest, Jeremy Skogquist from NIH homes. Hey Jeremy, thanks for joining us on conversations that convert.

Jeremy: Hey, Rick. 

Rick: Hey, I really appreciate your time today. I’m excited to hear what you have to say. We’ve been working together a long time and obviously, your company has changed a lot over the years and probably there have not been nearly as many changes in the first 2025 years as there have been in the last two years with the craziness of this current market. So let’s introduce, you get, get the audience to, to, to know you, you know, who are you, how are you where you are, and what’s been your journey through life to land you here, talking with me on conversations that convert. 

Jeremy: Sure. My name is Jeremy Skogquist, I’m with NIH homes, we’re based out of Oak river, Minnesota, which is north of twin cities, probably about 45 minutes to an hour there, here in Minnesota. Larry, my dad started the company back in 1989, and my two brothers and I joined him as partners in 2003. And, he’s recently retired and we’re kind of a second generation taken on from here. I’ve been working with Rick, like said, for a long time. I used to be a runner framer crew. I used to be the foreman runner framer crew. So, I was out pounding nails. And then I got my real estate license. I was selling. And now I’m kind of running the client management and the, all the overseeing all the salespeople we have working for us. 

Rick: Yeah. Very, very true. So let’s give, let’s give the viewers a context here. Give us a little bit more information about the type of homes you build, and the target market you tend to go after. 

Jeremy: Sure. So we have a couple of different neighborhoods, up in the Northern twin cities. We have an acreage neighborhood where we usually target rent the 700-750 plus, and then we also have a neighborhood down in Plymouth and Maple Grove. That’s about 1.2 minimum and it goes up from there. And then we also do some custom stuff on the lake around lake Minnetonka. That is usually about 3 to 4 million plus down there. Our target market is usually gonna be that, move-up family home buyer. It’s gonna be anywhere from newborns to middle schoolers and then around the lake, there’s a lot more, a little older clientele that, the kids are off to college or soon to be, gonna be out, outta high school down there.

Rick: And I wanna, I wanna a couple of things I wanna clarify. So you, you are in the Minneapolis, Minnesota market kind of Northwest suburbs. And then north, when you get a little farther north into acreage property, you guys started out building primarily on that the kind of the, I guess I almost call it like the, what they call it excerpts or whatever, where you get like you’re beyond a city lot, but you’re on acreage. You kind of started there. I know when we first met, you were just coming off the framing crew and moving into that sales role, but you guys still run your own framing crew and trim carpenters, right?

Jeremy: Yep. Yep. So we have our own framing crew and we have, we’ve run our own employees for trimming crew as well. My older brother, Chad, which is the job suit, also owns the drywall company. So, the three main components that we have employed by our own employees are gonna be those three. 

Rick: And obviously prices have gone up a little bit then I remember 500,000 was an expensive home back in the day right now. It’s like, oh, we can’t, we can’t touch that. 

Jeremy: Yeah. Crazy. 

Rick: Yeah. So, so I hope everyone has an understanding of where Jeremy’s at that, this is a really well-run company. And one of the things I, I noticed about you guys just again, provide more context is that you have, so you have two other brothers in the company, but your volume to employee ratio is like through the roof. I mean, you typically, you’re what the 25, 30 million a year, in, in annual revenue. 

Jeremy: Yeah. And right between the 25 and 30 million. Yep. You know, I think last year we did 25 homes, the average sales price was over 1 million. and then just the three owners, my two brothers and myself, we also have our own interior designer, Teresa. So she’s on staff with us as well, which helps out a ton. she, creates a great relationship with our customers, throughout the whole construction phase. 

Rick: Yep. So just your, really this four in the, just your office, there’s really, there’s four in the. You’re doing about 6 million per employee, which is like, you, you have to be like a really well-oiled machine to hit that. So, yeah. So anyway, we’re excited to hear what you have to say today. So say today, so let’s talk again about, again, these new rules for project management. We’re in this hyperinflation market. what, what are, or actually let’s just back up a second. So how much time has been added to your production schedule, like say since 2020 in the last two. 

Jeremy: Well, we used to, we used to say, once they sign a purchase agreement, we’re, we, we’re usually gonna be moving in, but within six months, that has changed now with, the city’s taken so long, everything. Now, we’re telling people it’s gonna be six to eight months from the time that we start construction. So there has been an added, quite a bit of, of time added to it. So the projects are taking longer. it’s taken longer to get some materials and supplies and, and, and, and so forth. So…

Rick: And how about the consequences that go with that? So you’ve added this time, 2, 3, 4, 4 months. What are some of the consequences that you’ve, you’ve noticed like internally you’ve got your own employees, you’ve got your framing crews, your trim carpenters, drywall guys, but then also trade partners and vendors.

Jeremy: Well, on the, on the material side of it, there into a designer is meeting with them quicker. So she’s meeting with the customers quickly to make sure, we get a lot of the stuff ordered faster. So she’s got a lot of things that she’s worked with our appliance company and a, of the other vendors to find out if they’re long or lead times for those, she’s gonna let the people. And a lot of the times we’ll, she will try to push ’em towards the people, the products that don’t take as long as, as those other ones do. So there, there’s some, there are some struggles with that. not only with everything else, but we’ve also started in January this year, we started doing, kind of a slot schedule was I, I started, putting everything on, on a spreadsheet as far as what we have upcoming for digs. And, we’re, we’re doing two homes a month. So we’re, we’re planning to do two digs. Two starts per month. That way our framers and trimmers aren’t getting overly booked and, we can make sure they can keep the jobs going that we have, because I mean, everybody knows if you, if you’re looking for a framer, they’re, they’re pretty hard to find. So rather than scratching our heads and, and letting you know basements, sit there forever. Look, wait for a framer, hit it. We just went to two starts a month and. That way we can make sure that we’re able to keep up with everything. We have, our employees, aren’t working 80 hours a week, you know, they can, we can do that 40 to 60 hours a week that they were a little more comfortable with. And, it’s much more manageable for all of us as a company. 

Rick: Yeah. So framing obviously is tough, it’s tough to find framers. And, and that’s where a lot of the delays start. How many crews do you guys run? 

Jeremy: So we’re running, we’re keeping two crews busy. We have run up to three, but with these two starts per month, we’re planning just to run two.

Rick: Okay. And typical for your size homes? Typical framing time. Is that like five, or six weeks? 

Jeremy: Yeah, we’re looking at anywhere between four to six weeks, depending upon the size of the home. 

Rick: Okay. All right. And do you know you said you, you can’t keep up most of the time? Do you ever have to bring in other crews or is two crews will cover those both of those start each month?

Jeremy: Two crews will be able to cover that because there’s gonna be some jobs that we can get done in, in less than a month in three weeks. So we’re able to make up on some of that stuff, but for the most part, we’ve been, pretty manageable. There might be, you know, we try to do the slots, give two for our customers, but we also have to have specs and models planned in there as well. So I throw a spectrum and model in there and if, if one of those specs or models gets pushed out to the next month, we’re, we’re kind of, you know, bumping things around, based off that, that stuff. And, and two, one city might take longer than another city for getting the permit approved. So some things get fudged around a little bit, month to month there.

Rick: Yeah. Is it, how does that working out for you as far as kind of basing things around framers is, is, would you say that’s a good effective strategy for you or is there…

Jeremy: It’s been working so far. It, this, it has far now we’re into June, you know? And so, so things have been working pretty good for the, for the first six months of this year.

Rick: Okay. All right. Well, very good. So, so for your employees, what I heard you say is like, keeping them happy working. They’re just doing your stuff. You don’t have to bring in outside vendors. I know you guys, really, one of the things that you use to differentiate yourselves is talking about quality control. Having, an owner on-site daily, having employees doing the framing, the trim carpeting sort of thing. 

Jeremy: Yeah. 

Rick: So you’re able to continue with that as far as your, your, your marketing efforts. 

Jeremy: Yep. 

Rick: And so that’s some of the internal processes that change you made with vendors. You talked about the longer order, and order times. So what about job sites being idle? So you mentioned that we only do two a month. Have you been able to limit the amount of idle time on job sites? Cuz you drive by all the time. Right? You see job sites in there sitting there idle for like three weeks. 

Jeremy: Yeah. Yeah. So with this slot schedule, we’re doing two starts a month. We don’t have much idle time going on in our, so like I said, as far as our trimmers go, they can trim a house out in about two weeks, you know, depending upon the size we, we run anywhere between four to six guys on a trimming crew. So they’re going from job to job. So there’s there, you know, and even as the foundation goes. You know, it might sit for a week. but you know, that might have been more, it was more this winter because we were running into some cold weather while the framers were delayed. But you know, the only thing that can screw us up now in the summer is gonna be the rain and we haven’t had any issues and that might be one day or here. So here there, so we should be sitting pretty good here now. 

Rick: Yeah. So normally a builder is gonna communicate updates to the schedule. And of course, when you do have those idle times in your schedule, clients tend to get pretty anxious so it sounds like you’ve been able to eliminate some of that. But I, I’m just curious as far as a, what you’ve noticed and some of these delays the, the challenges with getting the project off the ground and going, what sort of things are making clients anxious right now during the production schedule and, and what are you doing or what have you done to try to minimize that?

Jeremy: I think being proactive with, with there on the upfront side of it, has helped our Theresa’s interview designer with being proactive on the upfront knowing, letting them know if something is a longer lead time compared to something that we know is not gonna be a longer lead time. That has been a ton, has huge, helped a ton. We have had some customers say, you know, we know that this KitchenAid appliance package is gonna take six months. We’re gonna risk it. You know, we, we’ve had a customer move in where they didn’t have a, their fridge. So where we’ll usually take their bar fridge or they’ll take a, one of their other fridges and put it in there and they’ll have to come back at a later date and get ’em re switched around and so forth. For the most part, it’s been pretty good as long as we communicate this up front and Theresa’s been really good with that our vendors have been really good with it at the showrooms. So we wanna make sure you know that there’s no confusion, come two weeks before closing that we know we’re gonna have the, all the appliances installed or not.

Rick: Would you guys say because you have your own employees, so you said, mentioned drywall, trim, carpentry, and framing. Would you say it’s been easier on you than other builders because you have that control? 

Jeremy: I think so. You know, and, and ever since I started doing this after, I got on the sales side of it, I think having our own employees was huge. I mean, there’s been. there’s been some, I know builders, even in the peak that we’re always looking for framers. So I think it’s been, it’s been helped us out a ton even during this time, and even though the whole market that we’ve been through. 

Rick: You, you have, I think on occasion sub out some of your crews to other builders, right?

Jeremy: Yeah. Back in the day, when I first got into sales there, where we were still working, more at acres stuff, we, before we moved into the city sewer and water, weren’t as busy back then. So we did sub out some, if, if we didn’t have a job coming up, we would find somebody else just to, frame a house for ’em or, or, or trim a house for, if we felt that we weren’t gonna have enough work for our employees that week or that month.

Rick: Yeah. It’s an, you know, it’s interesting, though in that most builders, of course, will look at that overhead as a liability, but what you guys have really done is turn it into an. like you said, if it gets slow, you can sub ’em out. And if it’s busy, you can build your market. You-you’re essentially your business around that, your ability to produce. And then you reduce, that those down times on the job site reducing stress and anxiety. And then you’ve gotta unique slim proposition too. When it comes to targeting the customer, is that your competitors just don’t have…

Jeremy: Yep. 

Rick: Yeah. So let’s talk about punching out a home, cuz you know, that’s always the challenge, right? Just getting ’em wrapped up. So you’ve got these, you’re building some big shack. So these are million to $4 million homes. So square footage-wise, what would you say? They’re averaging?

Jeremy: Anywhere between that 4,500 square feet to 7,500 square feet. 8,000 square feet is the max.

Rick: Okay. So good, good size homes, but we get to the point where we’re punching out that home. So now you’re dealing with some back orders of some products you’re getting into closing. As you mentioned the refrigerator issue. Are you having issues with clients where they’re saying, no, I want to escrow for this, or they’re unhappy about that? So how do you sort of handle that, that last four weeks of trying to get the house punched out?

Jeremy: You know, we haven’t had any issues. For the most part, when we have had a few things, not be there on time, the customer knew it up front and they knew it well before that. So obviously we’re staying in communication with those vendors up until the closing to see if we can get it there quicker, or if we if they can get one from another, warehouse or something, but for the most part, we haven’t had any issues and you know, and I’ve never had a customer say that they wanted escrow for certain things. No, because it’s those things that those items are ordered and, and, you know, we’re always in that area. So we’re always stopping in if, if something, they need or whatever. You know, we have, we have our own service guy as well on the staff. If they, a door needs to be adjusted after they move in or something, you know, I’ll just have the guy swing by when he is gonna be in the neighborhood type thing. So… 

Rick: Sure. 

Jeremy: For the most part we’ve been pretty good. It, it, it has added a little bit to the punch list just to make sure the painters can get all the touch-ups down and all that stuff. So we are adding about a week to it, but, it’s been going pretty good so far. 

Rick: When you, so historically, were you at two weeks and now were you closer to three or was it going?

Jeremy: One to two weeks. We moved in about three weeks.

Rick: Yeah. You know, I, I was talking about that the other day. The topic is that there’s always that client that says, Hey, Jeremy, can you get me in sooner? I want to close sooner. Right? I mean, maybe it’s probably every client, especially if they’ve been waiting a year. To get their home. And I said, it’s from a customer service standpoint, we always wanna be like, oh yeah, I wanna try to get this done. But man, you always burden yourself where something’s not done. Right. And then they don’t wanna let you back in the house. And then they’re complaining about this didn’t get done. So, that’s so smart to take the time upfront, punch it out correctly, and then hopefully not have to go back. For the next month and, and, cuz the house is finished. 

Rick: Yeah. You know, we do, obviously, with living in Minnesota, we have to escrow for the landscaping next year, concrete stuff over the winter. But, for the most part, I think we’re done now with all the next year’s concrete. We just have to wrap up some landscaping jobs, but we always tell people, weather permitting. We’re trying to get done with that stuff by the end of June. But yeah, that’s, that’s about it. 

Jeremy: It sounds though like you’re pretty much just communicating early and often about potential back order items. I mean, right up front with there, when she’s ordering, saying, Hey, look, guys, we’re gonna go for it, but this could happen. And if it does, this is what we’ll do. 

Rick: Yep. 

Rick: Have you noticed, and, and this, we’re kind of getting to the end of our time here, but I’m just curious, is that, have you noticed a real change in people because that when they’re building before let’s say supply chain crunch and the la-, the labor crunch list. It’s been around a long time. I mean, we’ve been dealing with labor issues for a decade-plus, but the supply chain crunch really came in and probably ended in 2020-2021. There’s a lot of press on it. How do you notice that your clients are more, are they more willing to accept delays now than they used to be? Or are they still pushing you? 

Jeremy: I would say for sure. They’re, they’re willing to more willing to accept now. it’s, it’s, there’s so much press out there. There’s so much media on it that everybody’s talking about it. So, everybody knows about it and so they’re, they’re willing. They’re, they’re well more aware of it for sure now than it ever was before.

Rick: So I wanna wrap up our time here. I wanna ask you one question and I know I didn’t give this to you ahead of time, but I, I, I’m really curious about your answer. If you’re, if you’re talking to another one of your builder peers out there and they’re struggling with production and they’ve got long delay times, and, and they’ve got customers that are getting anxious and unhappy, what’s the one piece of advice or the best thing you could tell a fellow builder to say, Hey, look, you know, try doing this to help you through some of those issues.

Jeremy: I would say I would, I would go back as a company and try to figure out what you can do comfortably. How many homes per month you could do comfortably and figure out a slot schedule based on that, because you know, comfortable for us. I mean, two homes a month is right on 24. We’ve always built anywhere between that 25 and 30 homes. This is about perfect for us again, if we did any more than that, we would need way more overhead and way more help than what we can handle. Yeah. So I would go back as a company, and figure out what you can handle monthly. And I would build a slot schedule based on that, because I’ve even heard of national builders saying the same thing, saying that they have to go back and figure out how many homes they could do per month, just to be able to accommodate what they can do.

Rick: Yeah, production drives sales, not the other way, not the other way around. And that’s, that’s very wise words. Don’t bite off more than you can chew. 

Jeremy: Right.

Rick: Literally because yeah, you overextend, it’s easy to have a desire to overextend your house. Like I know we were talking, offline and you’re turning away a lot of your offsite stuff right now. Right. I have turned a ton away. 

Jeremy: Yeah. So when we begin this year, when we did our business plan, we figured out how many, lots we needed to sell on-site with our neighborhoods. And then, you know, with doing the slot schedule there, that only left room for two or three offsites this year. And usually, we do anywhere between 7 and 10. So I have turned a ton away. And, it’s just because it, as you said, I don’t wanna bite more than I could chew, you know? I mean, it’s, it’s, it’s something that, what it’s going to make the company work the best. 

Rick: Yep. And have you, I guess we’ll, we’ll wrap it up with this, but I’m just thinking of a couple of other things that people might be interested in is that, have you noticed it’s tougher to maintain your margins to date, like during production? So after the contract, you’ve given the price to your, to your client, is it tougher to maintain your margins with an extended production schedule? Or have you been able to sort of keep those, from where you projected to where you end up? 

Jeremy: For the most part we’ve been pretty good. We’ve been able to hold good margins. There were a few when lumber was going up and down, things were trusts were going up and down. So, so fast. There, there were a few jobs that, you know, before we started the slot schedule that took longer than we wanted to, and we didn’t make as much. But, since we started this last schedule. It’s been pretty good. We’ve been able to hold our margins pretty well. 

Rick: Okay. Well that’s yeah, that’s good news. So to learn more about Jeremy NIH homes and his operation go to nihhomes.com, we’re gonna, have you back for one more episode where you’re gonna bring in Theresa and talk more about designing and estimating and doing selections in the hyperinflation market. So this has been really awesome. Great, great information here for everyone that’s watching. Thank you so much, Jeremy, for being a guest on conversations that convert. 

Jeremy: No problem. Thanks, Rick. 

Rick: All right. We’ll see next time.