How Norhart's Innovative Approach to Multifamily Construction is Solving the Housing Shortage

How Norhart's Innovative Approach to Multifamily Construction is Solving the Housing Shortage

On this episode of the Investor Financing Podcast, Beau interviews Mike Kaeding, a residential real estate builder and developer and the CEO of Norhart.

Mike shared insights on their unique approach to designing, building, and running apartments that has led to a 20-30% reduction in construction costs, with a goal to achieve 50% over time. One of the key techniques they use is bringing all the work in-house and applying assembly line concepts to building, breaking down the building into smaller chunks or batches, with workers moving down the line every five hours.

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This has condensed the space and reduced project timelines from 15 to 9 months. Norhart's model involves finding locations, designing, entitling, and managing their own properties, and they have over 2,000 units under management.

Their goal is to produce so many units that supply and demand factors in, causing prices to come down on a nationwide scale.

They are also working on a platform that allows investors to participate and earn higher returns, with their equity cushion currently at 20-30%. Overall, Norhart's approach to multifamily construction is focused on solving the housing shortage problem while reducing costs and increasing efficiency.

Timestamps
[00:38] Beau introduces Mike Kaeding on the show and talks about his credentials
[01:42] How did Mike start running their construction business, Norhart
[03:28] Applying innovations and techniques to construction
[05:28] The concept of an assembly line
[07:26] Target building size, around 350 units per building
[07:45] Norhart’s goal is to solve America’s housing affordability crisis
[09:57] Holding long-term with investors
[10:22] Each building that’s done generates cash
[11:27] The subcontractor companies get to earn a profit
[11:59] Creating the most efficient build design firm that can build multi-family
[13:10] Bringing solar into buildings to achieve lower electricity and utility costs
[14:34] The caliber of Norhart’s team is incredibly high, they are the best in the country at what they are doing according to Mike
[15:23] The KPI metrics to look at utilizing
[11:52] “We are building in about 500 units a year” - Mike
[17:33] Spending time on the efficiencies in property management
[18:55] Texas is a large amount of population in a fairly small and fast-growing area
[23:14] The profit margins are so large
[25:13] No minimum anticipation for an investor
[26:35] Creating efficiencies in the multi-family space that will drive down total rents
[28:10] The changing demographics in the United States are going to make things tough for all of us
[31:00] Being a little bit immune to the market is beneficial
[33:05] Where to go to know more about Mike

💥 Thanks for watching 💥
#multifamilyinvesting #multifamilyconstruction #multifamilyinnovations

About Beau: Beau Eckstein is a real estate entrepreneur, TV personality, and commercial mortgage advisor, specializing in construction financing and multi-family lending.

🎥 The video interviews we do on IFP will help you scale your real estate business and learn how to finance your all your projects.

About the Channel: Want to structure your investments in the right and secure way?

Learn great insights and make the right decisions through the Investor Financing Podcast hosted by Beau Eckstein.