Steel vs Wood: The SHOCKING Truth About Building Costs (Save ~30% Per House!)

Kris Krohn here. Welcome back. Today, I'm going toe-to-toe with Chad Brown who claims that you can literally build a home for 10% cheaper when you do it out of steel versus wood. And so, for all you all builders out there or those of you that are playing the game of real estate and that's why you follow me, this is an important conversation. Because if it's true that you can build a house for 10% less, you better pay attention. Let me make an introduction guys. Chad Brown is a friend of mine. He's a business partner of mine. And he's been making some pretty big wild claims that is upsetting the builder community. He basically says that he possesses a technology. These Xerox machines. Like if you want to use an analogy that will basically print the frame of a house out of steel in a single day. And the last I checked, I mean I've been building a lot of houses. When you build them out of wood, they take... It's measured in weeks and months not days. Brother, let's just go ahead and start with a quick introduction. You've been building houses for how long? I've been building houses for 30 years since 1995. Since the guy the Marine Corps started framing houses. It got into the industry that way. And I have been in the steel framing industry printing houses since 2016. Okay, real quick. Define the difference between I go to Home Depot and I get studs out of steel instead of wood. And I can frame a house out of steel too. But you're saying you have these 3D printing machines which is what makes it significantly cheaper. Yeah, that's how we take steel as a commodity and make it affordable to the average American consumer. Is that we go direct from the steel from the mill with the steel and then we run it through our technology process to print out the framing of their home. Okay, so what we're going to do is let's do a comparison. Let's talk about a house and what the real numbers are if you do it out of wood versus steel. Let's prove whether or not the savings are there because we're talking about the entire price of the house being 10% cheaper. But the largest line item in building a house is the framing package. And you're saying you can be a typical framing package by how much? We can be a typical framing package by about 30% on the average American. Okay, so 30% is going to translate to tens of thousands of dollars either to the person buying the home or maybe it's a greedy builder that's pocketing the money. But someone's going to wind up with tens of thousands of dollars if they make the switch to steel. Let's see if it's actually true. It's actually true and here's what the thing is. Most builders will take a wood quote from a wood supply house. Okay. And they will compare the bottom line number there to the bottom line number that we provide them inside of our rough order magnitude proposal. Okay. That doesn't work because our proposal has about 60% of the framing labor in the number already. Okay, so let me be clear. In your shop, you don't just print it out. You then pre-assemble it in panels. Yes. And so it comes 60% done. So, by the time you ship it out on location, you've got the framing crew that just has to finish bolting it together. That's it. So, if you'll picture anything that's a wood framing on your house before the exterior sheeting goes on, before the sheetrock goes on the inside, the studs, the floor joists, the roof truss. All of that we print to specific tolerances for your house. There's no waste and in doing so, we create the house framing at a cheaper price than you can get wood for. So, you're saying that it's hard to do an apples-to-apples comparison if we're just saying, well, here's my lumber package cost and my labor. And then you say, but here's your steel bid and you only have a little labor less to go. How many different line items are there that we're going to compare here to get to a true apples-to-apples comparison? So, as a builder, what we get paid on... I can tell you this from being a builder for 30 years. What I get paid on is the finished house. I don't get paid on the house once it's framed. I get paid on what the cost of the house is when it's finished. Okay. So, what we do is transfer these savings forward because there's savings that runs not just from the framing. It runs all the way through the process of building a home when you use this steel specifically the way we do it. Well, I'm going to be playing team wood over here. You can play team steel. Let's talk about this example. You brought one here with you. This is a 3,000 square foot single family home. Yep. And we're going to talk about the real numbers of what it is to do it in wood versus framing it up in steel. So, we have this on our website. We use this as a sales tool. This is our true cost comparison. Okay. We call this document. I'm going to run through this document with you because it lists out the eight or ten items that are going to save you as a home builder or a home owner when you're building your house out of steel. Okay. Got it. Okay. So, the first item, if you just want to jump in, we're gonna look at framing labor. Okay. Okay. So, what we did was take a typical timber build and we took a typical next gen steel printed package, a steel build, and we compared those side by side and we run down through these eight or ten items and starting with the framing labor. The typical on-site build for framing is about $10 a square foot depending on where you're at in the country. It can be anywhere as low as 7 or 8 dollars. Anywhere as high as $15. But on a 3,000 square foot home, we're just going to use $10 a square foot. I'm going to pay $30,000 to a crew to come in to take the lumber package and basically frame the house. They're going to take your sticks and they're going to make sawdust and they're going to create your house framing out of that. Yes. Okay. What is it going to be in steel? So, in steel, the erection labor is about $5 a square foot on a 3,000 square foot home. So, half the cost. So, you're going to run in at 15,000. Just on labor right there. So, right now, just comparing the labor of wood versus steel, there's a $15,000 savings. Because the machines that print your framing have actually done the labor of half of what the workforce does out of wood. Got it. Okay. Number 2? Number 2 is the lumber waste and overage. It has a builder. So, we already know that the supply houses give us a quote. That quote has a number. That is not the number we pay. Typically, we pay 10 to 15% higher in the end because of waste, because of broken pieces of timber, because of warped timber that got rained on during the construction process. Because of coal material, just simply wood sitting out in the sun drying on its own, bends and warps. So, we have a factor in there of about $7,000, which is 15% for waste and overage on a 3,000 square foot home. And my guess is you don't have that in steel. Your guess is absolutely right. Not only do we not have it, we don't have a single bit of waste when we print your home out of our steel. So, we've got $15,000 on the labor differences. We've got 7,000 on non-wasted wood material that you don't have with steel. That's a total of $22,000 of savings. Number 3 is what I hate is the bane of my existence as a builder and that is dumpsters. Why do you hate dumpsters? Because all we do is throw things in it, throw money away in the dumpster. And then we pay the dumpster company to take it away. So, you have to pay for the stuff that you have to pay someone to gather. Yes. That you have to pay to throw away. Yes. Got it. So, when you work out framing, wood framing for a typical 3,000 square foot home, you'll have about 4 dumpster swap-outs. Depending on where you're at in the country, these dumpsters will cost about $800 a piece. That's $3,200 in dumpsters. So, you have... During the framing process, you're going to pay as a builder in wood $3,200 more to throw all of the broken excess bad pieces away. In steel, you don't need dumpsters? You don't need dumpsters. And that's just for the dumpsters. Not counting what's going in it. Okay. So, you basically have an erector set arriving where the framers basically come and say, oh, you've pre-assembled your panels. We're now going to finish bolting them together. And of course, there's no waste because it just came with the panels and the nuts and bolts. And a matter of fact, we erect our system without a saw. No cutting. So, there's no waste. Got it. Understand. So, that 3,200 added to the other 22,000 already puts us over $25,000 difference on a 3,000 square foot home between wood and steel. What's line item number 4? Line item number 4 is the MEP trade. Your plumbing, your HVAC, and your electrical. So, how do you save money there by doing out of steel? Well, in our facility, we're able to take these machines, tell them how you're going to run your wire, tell the machines how you're going to run your plumbing, how you're going to run your HVAC. And we're able to punch out the studs specifically to where the plumber or the electrician is going to pull wire or pipe. What that does is save them from the first day of getting on board into a job which is where they walk out with 2 guys and 2 drills. And all day, all they do is drill holes and studs. So, there's an extra 2.5% cost for each of those 3 trades. That's going to come to $6,600 that the builder in wood would have to pay for basically saying, hey, we built it out of wood but now we need to make a bunch of adjustments for how we're going to run the plumbing, the electrical and the mechanical. Exactly. So, that's savings that in steel. That actually is a big time savings too. Well, and that's... It's a huge time savings and it's $6,000 added to the 25 you've already saved. So, we're over $30,000 in savings. I mean, crazy. So, the next line item that we're going to save is on cabinet and accessory block. Number 5 guys, the blocking as a builder is I know where the cabinets are going to be. I have to screw them into something not drywall. And so basically, you're going to have to put in a bunch of wood backing throughout the house so that all of your sheeting and everything can line up. I think about in my office here, I have all of my trophies from my hunts that are here. And we did backing on the entire room. And I had to pay thousands of dollars for that. Yeah. And not only that with your cabinets, you don't even think about this but your toilet paper holders, your curtain rods. Like the things that you put up that have these anchors that go into sheetrock. When you move your curtain rod, it ends up pulling the curtain rod down after 2 or 3 years. You don't do that with steel. We put blocking there. And if you did that in wood, it would cost you money. On the 3,000 square foot home looks like you're guessing about $2,000 in savings because in steel, you've already done it. You still added all your blocking as a part of the design and printing process. That's what we do. Okay. Inside the facility with the machines, no human labor. Okay, the next piece is the next line item is a big one. It is the weatherproof envelope. Carry cost. Guys, this is number 6. And what you're basically saying here is if you can get the steel arriving on site and put together in days or weeks versus weeks and months, it's going to shorten the time frame and the cost of the interest on the project is going to be cut down. Huge. And so, if a builder is organized which most should be, they're going to have the windows ready to go and the doors ready to go for the exterior when they start their framing process. So, when we send it out and we erected 2,500, 3,000 square foot house in a day or 2, we put the windows and the doors in or the framers do. That house after 2 days is now weatherproof. It's weathertight. Got it. Which releases it to the rest of the trades faster. So, when you're releasing your weatherproof envelope, that's a big deal for a builder. There's time and interest savings in that. So, you know, for what we look at, we're looking at about $1,500 in carry costs on the average 3,000 square foot home just for delivering the weatherproof envelope quicker. I don't know exactly where we're at but we're well over 30,000. We're on our way to $40,000 in savings on this package. Line item number 7 is callbacks and punch-out work. For the non builders, what is that? So, for a builder is, you know, along with dumpsters, it's the bane of your existence to build it. It's when you get the house finished and the homeowner moves in and then the homeowner calls back with a lot of things that need to be fixed. Typically, because wood has twisted or warped or bowed and it's causing bows in the sheet rocks, bows in the molding, doors that are dragging because the timber moves. Steel doesn't do that. I have 3 tiles on the floor in this room that are broken. Now, these are 8 foot by 4 feet large format tiles and they broke for only one reason because the floors made out of wood. And it moves. And it moves. Yeah. So, we cut the callbacks and the punch-out out for builders. Builders have to go fix that for free, by the way. One year, by federal law, a builder is responsible for one year for everything in the home. Everything. And so, there's no way out of this for a builder. Well, how do you mitigate that? You lower your callbacks and your punch-outs by using steel. That saves $3,100. $3,100 just on that line item. Now, we're on to our eighth and final line item which is the builder's risk insurance. What is that? That's a huge piece. So, for most projects, most builders have to supply the builder's risk insurance because they're responsible for the construction process and schedule. So, because of that, most builders supply that builder's risk insurance policy which ensures the homeowner and the project during the time of construction. So, my daughter yesterday was racing out of my house to go back to her apartment because 6 minutes away, there was a huge new construction project. A blaze. It had lit on fire, they combusted. And now, it was threatening to burn down other parts of the community. And I was just thinking, someone's millions of dollars in that project. Who's going to cough up the loss? They have builders risk insurance. Yeah. And that's why these insurance companies are saying, just because of that loss, like we have to do something about fire mitigation. We have to. Steel is kind of fire mitigation. And steel is... At least it's not fuel. I'm telling you if that project was built out of steel, it couldn't have caught on fire. It was only in the framing phase. It was only in a frame phase. And if it would have caught on fire with sheet rock or some other material that's in the project because some of you what might say that, it wouldn't spread like it did in steel and give the fire department time to get there and put it out. Alright. So, those builder risk insurance policies are going to get cut down by how much? They get cut down about 40% on average. It's massive in hurricane states and fire states. It's still massive in states where you have don't have that risk. So, an average policy is 2,500 bucks across the US, right? So, that's going to save you about 1,750 bucks. Steel framing cuts down about 70%. So, when we add all of those up, all 8 of these line items, that comes up to $40,150 of the entire house being built for cheaper out of steel than wood. And yet steel is 4 times stronger. It's insurable for a lot less because there should as a bonus, let's add the ninth line item. Which is not to the builder, it's the homeowner. The homeowner is going to save up to 30 or 40 percent on their insurance premium every single year because their house is built out of steel instead of wood. And that's for them being in the home, the life of the home. So, someone's going to pocket tens of thousands of dollars. Hopefully, it's the homeowner. And then they're going to save tens of thousands of dollars. This is solving a really big crisis. And you know what? It looks like from everything you've shown here that the game is a lot cheaper in steel versus wood. Steel wins. Appreciate it, man. Yeah. Guys, if you will learn more about the steel game, here's the cool part about it. Yes, if you're going to build your next house out of something, you might as well go steel versus wood. And if you want to know how to submit your plans to this nationwide company that will do that for you, click the link below. But if you're sitting here thinking, this is a big disruptive industry. I wonder if there's affiliate income associated with it. We have affiliates that have a multi six-figure and a multi seven-figure annual earning opportunity. It is literally one of the highest paying careers on the entire planet right now. We are putting the lumber industries out of business by helping builders make the switch. And the affiliates are loving it because it sounds like a Geico commercial. You call up a builder and say, are you building out of wood or steel? And they say, wouldn't you say, would you like to switch to steel and save 30% on your... And so, it's super impressive. Yeah, it is man. I'm just grateful to be a part of it. Click the link below and see what you can do to get involved now. Alright guys, thanks for watching today. We'll catch you on the next video.