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
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.”