Why a $12M resort developer reinvented himself as a tiny home builder

Randy Jones sees opportunity in what he says is an "over-inflated" market

TRD New York TRD WEEKEND EDITION /
Aug.August 12, 2018 02:56 PM

Randy Jones. (Credit: Incredible Tiny Homes)

Tiny homes have been heralded as one approach to affordable housing, but as zoning rules and various regulations have wrapped the housing model in red tape, the small homes have seemed less and less like a viable option.

But for Randy Jones, the founder of building company Incredible Tiny Homes, the troubled market represents an opportunity so obvious it’s basically a “no brainer.”

Jones, 58, got into the business after losing everything in Great Recession. At the time of the crash, he’d been a contractor for more than 20 years and was about a decade into developing a 170-acre parcel in Tennessee into a resort called Brother’s Cove, valued at about $12 million in 2007.

Jones ended up having to walk away from the property after trying every which way to cut a deal.

“It was a $12 million resort and I lost everything. I walked out with nothing and had to live in a friend’s camper,” he said.

While working various jobs as a contractor based out of Morristown, TN, Jones’ partner and long-time colleague Amanda showed him a Facebook post of a tiny home built by Tumbleweed Tiny Homes, a company that got started back in 1999, and the concept struck a chord.

“[Tiny homes] were selling for $60,000,” he recalled “Well, here in Tennessee, you can buy an entire house for $60,000 so I knew I could build a home and make a profit.” Currently, the median listing price in the state according to Zillow is $244,900.

Jones saved lumber scraps from his next couple of jobs and, after working out an arrangement with a local warehouse owner to clean the property in exchange for work space, Jones began building his first tiny home. In 2015, he listed it for $25,000 on tinyhouslistings.com.

“I called it ‘American Freedom’ and it exploded,” he recalled. “I took 10 orders that weekend. Nobody in the United States is selling anything for that value for $20-$25,000.”

Three years later, Jones’ price for a standard tiny home remains the same while market prices have risen. In December 2016, CNBC reported the median price of a tiny home was nearly $120,000.

“The entire [tiny home] market is over-inflated,” Jones said, explaining the mark-up he feels most builders put on their homes. “It’s just like the mentality of 2008 and before that–it’s the mentality of greed in this country and it’s competition… but I’m stepping ten years ahead of everyone in the business by chopping my prices now.”

Jones’ company employs about 30 people and constructs and sells about 80 homes per year. He claims construction costs are $7,000 per home and the company is in the process of building a new work space on a 32-acre lot that will serve as both their new warehouse and a community for people living in tiny homes to park. Jones anticipates about 150 homes will eventually fit on the property.

He also offers significant discounts to the tune of thousands of dollars for buyers willing to spend six days in the company warehouse finishing the construction themselves. (“That in and of itself is a story,” he added. “You would not believe the drama.”)

“My goal is of course to completely destroy the competition, but in a gentlemanly way,” he explained. “The people who come to me are like me–people who’ve lost everything, that are hurtin’ and there’s a real reward in knowing that you’re giving someone a home.”


Related Articles

arrow_forward_ios
Fredrik Eklund, Julia Spillman and John Gomes (Getty, iStock)

Threatened by tech, agents turn to app

Threatened by tech, agents turn to app
(iStock)

Mortgage applications to buy homes now higher than a year ago

Mortgage applications to buy homes now higher than a year ago
155 West 11th Street and 1100 Park Avenue (FXFOWLE; Google Maps)

Manhattan luxury market shows tentative signs of activity

Manhattan luxury market shows tentative signs of activity
Clockwise from bottom left: Robert Reffkin of Compass, John Gomes, Scott Rechler of RXR Realty, Rich Barton of Zillow, Gary Keller of Keller Williams and Don Peebles of The Peebles Corporation (Getty)

“America is in crisis:” Real estate leaders address George Floyd protests

“America is in crisis:” Real estate leaders address George Floyd protests
16 Sutton Place (Credit: Google Maps)

Sutton Place co-op in turmoil over terrace fees

Sutton Place co-op in turmoil over terrace fees
Molly Townsend (Getty, iStock)

Ex-Douglas Elliman sales manager Molly Townsend joins Triplemint

Ex-Douglas Elliman sales manager Molly Townsend joins Triplemint
New home listings in Manhattan are up for the 4th week in a row. Contract signings, not so much. (Getty; iStock)

Manhattan resi listings are up while contracts “limp along”

Manhattan resi listings are up while contracts “limp along”
The process for challenging property assessments is so antiquated, officials won’t do Zoom meetings. (iStock)

“A recipe for disaster”: Fighting property taxes in a pandemic

“A recipe for disaster”: Fighting property taxes in a pandemic
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...