Episode 28 - Steve Weissmann, Tumbleweed Tiny Homes

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Prefab Review

Hi, my name is Michael Frank and this is The Prefab Pod presented by Prefab Review where we interview leading people and companies in the prefab housing industry. Today, we're speaking with Steve Weissmann the CEO of Tumbleweed Tiny Homes. Nice to have you here, Steve. Thanks for joining.

Tumbleweed

Hi, Michael. Glad to be here and spend some time with you today.

Prefab Review

Awesome! So just to start, can you tell me a bit about the history of Tumbleweed Tiny Homes and how you became involved with the company?

Tumbleweed

Yeah, so I was actually downsizing my life for personal reasons back around 2001 - 2002. And at that point, I was completely unaware of the tiny house movement, or the small house movement as some called it. But I progressively got into smaller and smaller places. And at one point, a friend of mine says, “hey, I've met this guy who lives in a house that's even smaller than yours. You should meet him because he's getting some press about it. And so she introduced me. And he was in a Tumbleweed. I just fell in love with it and that was in 2006. And I started volunteering my time with the company and then in 2007, I wound up buying into the company.

Prefab Review

And so at the time, Tumbleweed was just a small business somewhere in Sonoma County or Sonoma proper.

Tumbleweed

Yeah, I was living in Sebastopol at the time. And to call it small would be generous. It was smaller than small. It was tiny. It was a tiny company. You know at that point in time the revenue was about $4,000 a month and mostly came from selling plans for people to build their own. So originally, the first Tumbleweed was built in 1999 and it sort of morphed into a business over the following years as people were like, “hey, I want one.” and so when I got involved, Tumbleweed had a few house plans that you could buy and build from.

Prefab Review

Got it. And this is just like carpenters doing something in kind of a non-scalable way in like someone's garage or a small warehouse or something like that?

Tumbleweed

And maybe every year one house would get built. Yeah, but the people who were buying the plans were even less skilled than carpenters. So I think it was a lot of dreamers, a lot of idealists, that were wanting to do something radically different than everybody else. They really wanted the place. They were doing it because they wanted to live there and they wanted a place that would say something about who they are. It was a form of self-expression.

Prefab Review

Got it. And did you have a background in carpentry or anything like that?

Tumbleweed

Yeah, a pseudo background. So my dad was a contractor and I was on-site with him a little bit. You know, especially when I was younger like in high schoo - spending summers on the job site with him. I got some practice and then I did do a couple of fixer-uppers on my own. So I had that experience. And besides that, I had previous business experience as well. I did real estate investing and I owned several restaurants before getting involved in Tumbleweed.

Prefab Review

Awesome. Okay, so where we left-off. You're a small company doing a few thousand dollars a month of revenue building on kind of a standard trailer chassis? Can you talk a bit about the evolution?

Tumbleweed

Yeah, so that was 2007 when I bought in. And of course in 2008 the housing crisis comes and hits us and now we're scratching our heads saying, “well, where does the future of this go?” Everybody was getting out of their homes. The price for homes was coming down and the way to buy one of these in the past was people would refinance their home and buy it. So recognizing that the sales of the tiny houses were going to all but disappear, we really focused on the DIY aspect. So we started doing seminars in person around the country. And that actually turned out to be pretty cool. It was a pretty good business model. We came out with a really nice book that sold very well and so that kept us alive and the movement started to catch on. And as we were the pioneer in the industry, the movement grew in the late 2000’s. From that we started getting a lot of web traffic and by, I think it was about 2013, we really hit high on the web counts. And we had 5,000,000 visitors to our website in one year. And at that point, tiny houses were really starting to become a mainstream thing. And the next evolution was we werre going to actually start building these en mass. And we became a licensed RV manufacturer so we got a plant and we actually got licensed and started building these.

Prefab Review

Got it. Okay, so that plant was in Sonoma? Because you're in Colorado.

Tumbleweed

No. So that was in Colorado Springs. So before, as I was mentioning we'd sell about one a year and I'd work with somebody. We'd often do a backyard build and then, as we said, we're going to get serious about it, that was in Colorado. And it's kind of a funny story. There were these brothers that grew up Amish and they came to one of our workshops and said, “we want to build tiny houses.” And we wound up partnering with them. And so they had a factory where they were building sheds and chicken coops. And so they started building some tiny houses there as well. And as it grew, we got a much larger space. So that's the current factory. Where we’ve now got a 20,000 square foot space. And when it grew, they didn't want to move on with the tiny houses. I think that they had their own ideas of where they wanted to go. so I wound up buying them out and doing it on my own starting in 2015 - 2016.

Prefab Review

So then, what does your operation look like today in terms of the number of homes being built?

Tumbleweed

Yeah, absolutely. So one of the things I'm going to mention too, is that when we talk about this being a home, technically, it's an RV. So we build what's called a tiny house RV. So everything we build is on wheels. The wheels are permanently attached. And we have our factory running in 2 lines. They're both run shotgun-style, which means that we just roll the house up from front to back. So it's a 5 bay process. And pre-pandemic, we were building about 80 a year. The pandemic really took a bite out of our sales. And so we dropped to maybe three a month. And so we went from about seven a month to about 3 a month. And right now we're trying to build back up and that's a whole new challenge because

Prefab Review

Wow and that's a consumer demand thing. That's interesting because we haven't heard that from other parts of the sort of adjacent industries.

Tumbleweed

Right. Well, one of the things that's kind of unique to us, so a lot of tiny home buyers buy in cash. But there's a certain percentage of the market that buys with financing and that's really where our niche is. So almost all of our customers are finance customers and when the pandemic happened, a lot of people were really hesitant to take out loans and so you know, the buying behavior really changed. Our cash sales did not decrease, in fact, they increased but our sales, which I think it's like 80 % of our sales, are finance sales. They all just went in the tank. They were hard to find. Even people that we had in the pipeline. Some of them were struggling to get their loans done.

Prefab Review

So I want to get into the models but as you're talking about some of the ways the purchase happens, what are people primarily using your homes for? Are these primary homes? We want to touch a little bit on the hotel stuff you have on your website, which is super cool. Are these, as I said, rentals or is it like multi-generational living, like how does that break down?

Tumbleweed

Yeah, well, it's a combination of all of the things that you can imagine. So you know they're the largest share of the pie. But I think everyone imagines, “oh, we were deciding they’re for people to live in.” And that's not true. So there are people who live in them. There are a lot of people who buy them for rentals. So either businesses or even individuals buy them for rentals and just put them in their backyard. Some of the rentals as you see Airbnb rentals but there are some people who do it just as a monthly rental. And then there's a lot of people who are getting them for I guess, I’d call it an in-law cottage. So it's amazing, especially nowadays. There are so many families where maybe they have a parent or a child who they're getting this to have them in their backyard. But it's not a permanent situation. But they will choose this as an alternative to having them live somewhere else. So we actually see this with a lot of middle-aged adults caring for their parents, having a parent in the backyard. Or a lot of families with maybe a child that's an adult child that has special needs. So that's another common theme. And the other one too is we get people who use these as a getaway.

Prefab Review

When you talk about a getaway, do you mean they're actually pulling these like RV style?

Tumbleweed

Okay, yeah, great question. No, so when I say a getaway. They'll have some other piece of property where maybe they've got some land and they'll put this on the land. But you did bring up an interesting point about people who travel. That is a small percentage of them. But they are out there. Of those, in particular, there are two types. We've actually had quite a few traveling nurses get the Tumbleweeds and you know, it's for them, it's just a regular RV and they go from RV park to RV park, and every three months they're on the move, and then the other is military. So the military will move people around every six months to a year and they'll often pay those transport costs.

Prefab Review

That makes sense. And you can just connect these to like a pickup truck and pull them? Or does it have to be something with more capacity than that?

Tumbleweed

Yeah, so your regular half-ton pickup truck will not work. In the early days, the tiny houses were smaller and over the years they’re getting bigger and bigger. And the number one question we get asked is, “what's the biggest tiny house you build?” And you know, back when I started, the biggest one we built was under200 square feet and now most of them are about 260. And so the weight is pretty substantial with the larger ones. Technically, you could drive it yourself but I would not advise that. Anybody who's doing the traveling RV is getting a smaller size than the big ones.

Prefab Review

Right.

Tumbleweed

So you know, you asked me about the models. So we have 4 models & 2 of them have been around for a very long time. The Cyprus and the Elm. And they are much more traditional, craftsman-looking homes. And then we've got the two modern homes we call them the Roanoke and the Farallon. Um, and so that's the combination. We keep it really simple with those. Over the years, we've had different models but I have a general rule that if something drops below 3% in sales I just cut it and then I'll find something else to replace it.

Prefab Review

I see. I was gonna ask you about that because right, you've had 4 models, again I understand that there's sort of been a rotation. But right, like you have some models that have sort of stood the test of time and you know, some companies have what like 16 skews or 20 skews or whatever. So can you talk a little bit about sort of the development of the different models etc.

Tumbleweed

Yeah, well the Elm model was the very first tumbleweed that was ever built. And that's the one that has the full front porch and that iconic gothic window. And you know, I suppose even if that model dropped below 3%, I'd probably still keep it. It is the image of Tumbleweed. It is what people identify with Tumbleweed. So that one's here to stay. And luckily, it's not ever going to. I don't think it will ever get that low in sales. Then that model evolved into our Cyprus which has a bay window on the front. The large triple window on the front. So those are the two classics that have been around forever. The Cyprus is our all-time bestseller. And then in 2017 we came out with some newer models. So we had older models from over the years. Like a lot of models have come and gone. The most recent is the Farallon and the Roanoke, they've both been very popular. And so I'll tell you this right now, like the Farallon is our number-1 seller. It's the number-1 seller largely because it maximizes the amount of space. You know you're limited and so the more of an absolute box you can build, the better. The trick is how do you do that and make it look pretty? But that one has the most size in every dimension. So just by default, that's our number one and the Roanoke has the worst loft space. So by default, that's our worst seller. So next month we're coming out with a redesigned Roanoke that fixes the loft problem because, in that one, you can only sleep one way instead of either which way.

Prefab Review

Right. That's interesting. And people are actually quite utilitarian when it comes to this stuff. It's actually not what I would have guessed the Farallon would be a best-selller purely because we have, I don't know, a couple of people come to our site every month so we get I get a sense of a sample size of people who visit us, sort of the aesthetics of what they're looking for. So I would have guessed it would sell based on that. But, it sounds like you're saying just sort of the spatial profile has a huge part of it.

Tumbleweed

Yeah, because our other homes are unique. So there are a lot of companies that make designs like the Farallon and the Roanoke there's nothing particularly unique about those but the Cypress and the Elm were unique so that's going to drive a lot more customer interest. But when they start talking to the salespeople and they start talking about their needs sometimes they'll wind up switching over to the other model.

Prefab Review

That makes sense. And when you talk about thinking about design on these, are you designing these? How do you work with an architect?

Tumbleweed

Yeah, that's a great question. So our design process is really different than how you would design a typical home. And I'm going to spend a couple of minutes talking about this. So a typical home you tend to lay out the rooms you lay out your kitchen, your bedroom, your living room. You put your windows centered over your sink and then the rest of the house sort of evolves. Whereas with us, we're working with a very tight envelope and we really try to focus on a beautiful exterior. We find that that's one of the main draws that we have, is a beautiful exterior. So we design we call it from the outside in. First, we're going to design the exterior of the home. We want to have three windows. We use numbers of 3, so we either want to have 3 windows or we want to have 2 windows with three evenly spaced walls between them. And we try to space all the windows evenly on the wall. That creates a whole host of challenges on the inside of the house. So that's the outside in. And as much as we can adhere to that, we do.So the outside of the house drives the inside layout. It takes a lot more time to design a house, and then there's another factor that really affects the design of these houses and that's the wheels. The wheels actually stick up into the house. And because of that, it affects everything from how you can put your bathroom to your kitchen. And you want to cover those up as much as possible. So you want to put your stairs and your kitchen cabinets over those. And so what happens in all of our designs is that the stairs in the kitchen wind up in the middle of the house covering up the wheels on the interior. Yeah, so we design them all in-house. I would say that a lot of customers come and they want to modify it. We've done a lot of that. More of that in the past and we've really honed into these are the designs and you can change where the windows go on the bedroom and on the living room but the core of the house, we don't move.

Prefab Review

Yeah, again, I think given your envelope size, it sounds like you've been pretty thoughtful about a bunch of parts. That makes a lot of sense. Can you tell me a bit about the process of being a customer? So I go to your site. Your site is actually incredible and this is one of the really nice things about your industry compared to kind of the custom modular home industry I spend most of my time in. Because you don't have as much variability around sites in the way they have costs. At least in a way that affects your price. You know, you can go to the site and you can get a pretty credible quote right away. So okay, so I go through, I find a home I like, and I get a quote that looks good. It's $100,000 or $200,000 or something along that magnitude. What are the next steps from there, from a sort of timing perspective for customers?

Tumbleweed

Yeah, so somebody goes to the website, they design a quote, they wind up contacting us and setting an appointment. We talk with them and we usually do a lot of discovery questions in the first call. So we try to understand where it's going and what's their timeline, right? And how they're going to pay for it. So the biggest challenges people have are 3 things really - as I just mentioned, when do they need it, where is it going to go, and then how are they going to pay for it. And so the two obstacles in paying for it are you know, if you're not a cash buyer, where is the down payment coming from? And can I afford the monthly payment? So before we ever get down further we have a very quick prequel on our website. It's a custom software I actually made myself, so someone can go in there and it doesn't ding their credit but we can actually match it with the different lenders that we use and give them a very good estimate of what their payment's gonna be. So once we have that and we say okay, now we know that this is gonna fit your budget let's talk about your site. And so we talk about the site and you know most people say, “I know where it's gonna go when it’s ready.” But even then they still need time to get the site set and I believe that most people underestimate how long it's going to take. So if you're going into an RV park, snap of the fingers, it's delivered and hooked up. But if it's going in a backyard, where most of them go, there's actually quite a bit of work the customer has to do. And it's pretty simple but it can take some time, especially in today's environment, to get the right people lined up to get this work done. So if it's in a backyard, you know often there's access, you know do I have to remove the fence? Then there's the grating of the land. It doesn't need to be a concrete slab but the dirt should be compacted. And then once it arrives, how does it hook up. You know there has to be a pedestal for an RV and it's typical RV hookups but you need 50 amps of power. You need your water in and you need to water out. If that's not available, you go with a composting toilet. But then there's still the greywater question.So people have to think through that first. And what we've learned is when we've had houses in inventory. We typically only build to order but when we have some inventory and people want it, then they'll buy it and they'll go, “oh wait, I still need two months before you deliver it.”

Prefab Review

That makes sense. So I guess a bunch of questions there. So it totally makes sense on the kind of infrastructure involved etc. And I know you've written a couple articles about this on your site, it seems like one of the things about RVs and tiny homes, in general, is there's sort of this romantic view of, “I'll like take this thing, I'll park this on this piece of land.”

Tumbleweed

Oh absolutely.

Prefab Review

Ideally, you know, they'll have a wonderful view and we're good. So you know, we get I don't know, of great ideas like this: “I just found this amazing piece of land in Nevada. It's $10,000 and you can see a hundred miles. Can I get a tiny home and just park it there? So obviously you talked about some of the realistic infrastructure stuff. From a permitting standpoint which is another thing that I don't think that we necessarily advise people, like you need a permit though. But we do advise people to understand how your local municipality feels about whatever you're going to do. Yeah, how do people handle that?

Tumbleweed

Right. So that's a great question especially since we are an RV and not a house and I think that really confuses a lot of the end buyers. So let me go and talk about the two differences. There's the building department and the zoning department. The building department says, “this is the code that you need to build a house to.” So we're not a house. We have a different code and if the RVs don't meet that code then there's the zoning department which says, “this is what you can put on your property. These are the sizes and these are the requirements for that.” So we fall under zoning and as a general rule, if you're in a city, it's probably not allowed, and if you're in a county it probably is allowed and one of the strange things that I found is that the more progressive the area is, the less likely it is allowed to actually have a tiny house on your property. So if you look at red states - blue states, if you're in a blue state, you probably can't or it's a lot harder and if you're in a red state it's a lot easier. So unincorporated Texas, you can almost do whatever you want. It all has to do with the zoning codes. And zoning codes are if you think about it this way, zoning codes are to…

Prefab Review

This is just a red tape thing for the most part.

Tumbleweed

To create an environment where it makes good neighbors. And so the more people you have in an area, the more likely there's going to be restrictions on what you can and can't put in your backyard. And then the more out you are in the middle of nowhere, it doesn't really matter so much. There's not going to be that same level of requirement and typically if your intention is to live in one of these, it's almost impossible without a primary residence on the property. It's not like you can get a certificate of occupancy for an RV. So what's been happening in a few municipalities is they're saying, “Okay, well we're going to allow people to get that certificate of occupancy and do that.” But that tends to be more in you know, mobile home developments and things like that. So you might see it where you can buy a piece of property but maybe it's part of a mobile home park that's not developed yet but you can just buy a plot of land there.

Prefab Review

We've seen it in a few exceptional areas, I believe Plaster County which is kind of Lake Tahoe area is one of them, where they do have these sort of tiny house on wheels sort of progressive legislation almost as kind of an extension of the ADU laws but it seems like that's kind of it more the exception to the rule.

Tumbleweed

Yeah, absolutely. It's changing slowly like you know Los Angeles County is now allowing for these in the backyard and at one point I don't think's on the website, at one point I remember writing an article about how long this is going to take, and I saw this as a 15 to 25-year sort of progression to where it actually got to a point where it could get to a tipping point. It tends to be an s curve and we're still at the beginning but it's starting to move a little bit faster to where now if there's a city or municipality that's looking to change their codes, there's actually other municipalities that they can look to and say, “okay, well this is how they've done it in their code. We can just borrow from them.” So that's made the process easier.

Prefab Review

I think you may have mentioned this already. But I missed it if you did. So once people actually order the home from you and get financing if they need it. How long does the actual home take to build for you all?

Tumbleweed

That's a great question. So it depends on our build timeline and you know, if you if you're at the end of the year, our timeline usually drops to about two months, and then in the peak of the year, it'll go up to about 5 or 6. So right now everybody wants one for spring and summer. So we're probably about five or six months out but then come winter, it'll drop to about two months.

Prefab Review

Okay, the home still only takes a month or 2 to build.

Tumbleweed

Yeah, so typically when there's no material issues, the home will take four weeks to build. But right now we're having as you know, so many challenges, so more like six weeks.

Prefab Review

Mostly just windows are what we see from a lot of people or is there all sorts of stuff?

Tumbleweed

It's funny you should say that because I'm dealing with the window apocalypse right now. Yeah, so we luckily used to do all custom size windows, and years ago we decided that we're just going to go with standard size windows that you could buy off the shelf at Home Depot and Lowes. In case one of our windows break,s so we did that and that's saved our hyde right now. Our windows got delayed and fortunately, we can buy the same size windows at Lowes or in Home Depot. They may be a little more expensive but we've seen problems with everything from composting toilets where it was just this one part was stuck on a barge, and you know for months to we couldn't get stovetops. Air conditioners were a problem. And you don't know what it's going to be. Every month it's something different and it's like we're playing whack-a-mole and you know we've got sa,y 400 components that go into a tiny house, you can't predict every one of them. So we're starting to stock them. But it's always like we're stocking them after the problem occurred not before the problem occurred because we just don't know what it is going to be.

Prefab Review

Makes sense. Okay, there are 2 more key things. One is the financing question. So right off the bat, a big part of your website, in terms of it seems like getting people qualified, et cetera, from doing a bit of diligence on financing for other RV companies, my impression is that if you're looking at this and you're comparing this to like an ADU or a home - financing is shorter-term and more expensive from an APR standpoint, is that right? And can you just talk a little bit about what financing might look like for one of these?

Tumbleweed

Yeah, absolutely. You’re hundred percent right. One of my key goals was to make it as easy as possible to buy a tiny house. And I have focused a lot of my energy on getting really good financing for customers. So the typical tiny house financing is going to be 7 to 15 years and the rates are usually like 8 to 12%. That's common. We've got a lot of better lenders. So we're doing loans that are 25 years and the rates are anywhere from about 5.50% to 7.50%. So it's slightly more than a home, but not terribly more. And then a 25-year term is almost the same as a 30 in terms of the monthly payments. You know, if somebody qualifies for both we'll give them the choice, you can do 25 years or 15 years but almost everybody chooses the 25-year term and then as far as down payment goes, so if your score is like 575 or higher then you're 20% down. But if you're 650 it's 10% down and then if you've got really good income and credit, we can do as little as like $1,000 - $2,000 down.

Prefab Review

And rates are like 5 to 10% right now, more or less?

Tumbleweed

Well the lowest, in theory, is like 5.25% I think or 5.50% and I've seen that like once or twice most people are coming in around 6.25%.

Prefab Review

Well, thanks for thanks for being helpful on that. And then I guess the other area that I was pretty interested to cover is the sort of tiny home hotels. You know, I dug around your website a little bit and looked at a lot of examples of people doing this. Can you talk a little bit about that opportunity and also just how you deal with those? Are you dealing with those people the exact same way as you're dealing with a normal customer? It looked like you had some sort of special financing deals potentially with those technical clients etc.

Tumbleweed

Yeah, so the tiny house hotel is a very different customer. So a few of them actually started off as regular customers and then converted it that way. But the vast majority say, “hey, I just want to do a vacation rental.” So first off, the financing on those is different. The letter always is going to require at least 20% down and they'll only do like a 15-year loan, they won't go longer. But beyond that, it's a combination of businesses and individuals. And so in the past, we've actually found the park and then found people who wanted it and kind of put them together. But we stopped doing that. At this point it's we're really hands-off, on it. Basically, if somebody wants to buy one, we'll put it on the website. We'll promote. It. You know, we'll do that if you say, “hey, send out a newsletter about it.” I'll send out a newsletter about it. But it's up to them to do it. They'll put it together. We've got one customer that's done a whole bunch. I think they've bought 25 from us now and then there are others where you know, they've bought one then another, you know, some buy three and some will just buy one. And that's all they're ever going to do.

Prefab Review

And there's a note there about, I don't remember if it's you doing a 100% financing. How's the finance or is that a thing just because we basically get people all the time coming to our our site and are like, “hey, I've got this winery in the central valley of California. I just do one Airbnb and it's killing it. I want to put four more RVs on that.”

Tumbleweed

Yeah, okay, great question. So when it comes to you asking about a 100% financing, So business financing is entirely different than individual financing. So yes, it is possible to get 100% financing. It's always tricky and my advice is that it rarely ever is worth it because just putting a little bit down usually lowers the rate substantially. So you know, it sounds nice, but it's not the best. But one of the things we can do is since we are technically a vehicle dealer, we are allowed to take trade-ins. So we have taken trade-ins on used RVs, on a motorcycle, on an airstream, a truck, on a car, and that could be the down payment. So something that you see as worthless to you might actually be worthwhile from the financing point of view. But yeah for businesses, if they wanted to go 100% financing the lender's going to want to securitize the ah RVs when they buy them. They're going to have a loan and their concern is always the same if I've got four of these rentals with this one place on this one property and that's the only loan I'm doing. What if they default? That's a huge portfolio risk so. So they'll probably require some down because if you think about it, let's say the house costs $100,000 there's probably going to be about $7,000 of taxes and a delivery fee on top of that. So by the time you're all done, it's 115% the price of the house. So even when you put 10% down, the loan is probably more than the base price of the house. So there's considerable risk for the lender.

Prefab Review

And then are there specific lenders that you've had a really good experience with or that you work with on the site or like can you talk about who they are?

Tumbleweed

I probably don't want to give away my best lenders. Lightstream. We do have a few customers who go through them every now and then but they require a 700 credit score or higher.

Prefab Review

That's not RV specific. I think that's more of a personal lender.

Tumbleweed

And I think it's like $50,000 in income. So not a whole lot of people are going to qualify for those loans. So we do have lenders that will do beyond a 45% debt to income ratio. So we've seen people with a decent credit score say 660 and you know making $2,000 a month get qualified for a tiny house which is really fantastic. So with Lightstream, that's just not a possibility.

Prefab Review

Right, that makes sense. Awesome. So this has been awesome. This's been really helpful in terms of learning a bit more about your product. We try to do a fire round any time where we ask experts like yourself a few general questions that we get all the time. So hopefully we can do that with you. And yeah, try to answer in a minute or less but we're not too much of sticklers on that. So I guess question number one was around snow loads. So again, I understand you're not technically building homes we do lots of homes in Colorado and in even Tahoe and stuff like that. And you know we have areas where we have to build for whatever, 250-pound snow loads and that affects the engineering and some other types of things. In terms of your homes, are they basically good to go wherever or are there special stuff you have to do to make sure they're able to perform in heavier snow load areas?

Tumbleweed

So this is such a great question and it goes beyond just snow loads. If you think about what we're doing, we're building them in Colorado, and then we're shipping them what I call 4 corners and 4 seasons. So we ship to the 4 corners of the United States and it has to survive all 4 seasons. And we don't always know where it's going and just because you put it in 1 spot doesn't mean you won't move it to another spot later. We do sell some to the mountains where they're 9,000 feet or more, and that creates a whole set of issues that are unique. Our house has a snow load of 75 pounds per square foot on the roof. We can up it a little bit. But if you came to us and said, “hey, I need it to be 250.” We would just say, “sorry, you're not going to get there with this house because you probably need to get something like 2 by 10 framing and that's just going to change the dimensions of the house too much for it to work properly.” So I'm guessing that we've gone a little bit past a hundred but that's probably the max and what happens is you wind up putting more posts throughout the tiny house and it can really break up the flow of things. Aand then beyond that, you've got to think about your windows. High altitude windows will crack, so we have to get special windows for those higher altitudes. We now put those in all of our homes because so many of them go all over the place. And then the other thing to consider too is that if you're at those altitudes you're often using liquid propane. So in that case, when you move the house you're going to have to reset everything and a lot of propane water heaters will not work at that altitude.

Prefab Review

Got it. So that means you have specific changes you make to make homes work at that altitude.

Tumbleweed

Well, as I said, we used to. But now the windows are standard. We do the high-altitude windows no matter what. We're only buying the appliances that work at all altitudes. Now you may have to adjust the knobs and fittings on your stove based on the altitude you're at. And you're going to have to adjust the water heater based on your altitude. So if you set it for here for 9,000 feet and then you move it to California months later, it's going to have to be reset. But the snow load as I said it's 75-pounds and then if somebody needs more, that would be engineered on a case by case basis. But if they said, I need it to be two-fifty, too bad we can't do it. But also the other thing is the insulation value, right? The r-value. So that's a question we come up against more often than the rest of them. And we don't adjust our r-values. And the way I describe it is like this- think of a car. Your car probably has r-1. But you can heat it up really fast because it's such a small space. And it's the same thing with a tiny house. You can heat a tiny house very quickly. Changing the insulation is just going to make that slightly more efficient. But once you do that, the whole envelope changes and everything that we plan really doesn't work if we have to go to 2 by 6 wall framing. It's a whole new house. So it doesn't work. We can. We can put a better insulation quality and maybe increase it from an r -13 to an r-19 in the walls. But that's about as good as it's going to get.

Prefab Review

That makes sense. Okay, so that's helpful to understand. I saw there was a Mt. Hood Hotel or something like that. They are pretty high, so they're just able to make it work with your sort of your standard model.

Tumbleweed

Yeah, our homes will work in freezing temperatures and really hot temperatures. So we send them over with that Mount Hood hotel and it is not an issue. And that was the first tiny house hotel that we did in partnership with equity Lifestyle properties. And they're the ones that have the hotels throughout the country and they do a fantastic job on theirs.

Prefab Review

That's great. Okay, so this is actually kind of connected to this last topic. In terms of insulation values, can you talk about the adjustments of your homes for off-grid. Is this something you see frequently? You talked about figuring out compostable toilets and gray wate.r I know your homes are wired for solar but oftentimes, I mean I don't know in your home situation. Sometimes I think being solar-connected doesn't actually provide as much power as people need. So how do they work for the off-grid situation?

Tumbleweed

Okay, so you're asking me a question that I could probably spend half an hour talking about. So to sum it up quickly, you know there is not a one size fits all for going off-grid and I'll break it down into components. So there's primarily 2 issues for going off-grid. One is your power supply and the other is your water - you know water, wastewater those types of things. So let's start with the water supply. If you're totally off-grid you're going to be bringing in those five-gallon buckets of water. And then we're going to put in a water storage tank and pump. So you're going to pour that into your house. That's going to be a reserve and it's going to pump it throughout. So we've done either a twenty-five or a forty-gallon reserve like that. And then when it comes to your power, you've got a few choices. So solar is one way to go. We do not sell solar panels. We are not solar experts. So what we do is we make the house solar-ready. So that everything's set up, all the wiring's done. We put in what's called a yeti goal 0 and everything just plugs into there and we make it so easy, so you can pick the items that you want. With the flip of the switch, “I want these on the solar and I don't want those in the solar.” And then you would work with a contractor for the batteries and the panels that you need. Depending on where you go in the country, that requirement's entirely different from location to location. So that's something that that person will help you with. In addition, if you think about it this way, when you're doing solar or using electricity it's things that produce a lot of heat that take the power. So you're going to want to go with propane and you're going to have a propane water heate,r a propane heat system and a proprane stove. All the other appliances, everything we do is energy efficient. I mean, you could do the propane fridge but I'd probably advise against it and in general, if you do not need propane I would say get away from that. The other thing is that they can also do a generator but one of the biggest challenges that tiny homes actually have is the challenge of moisture. So you've got a very small space. It's usually very well-wrapped in even just putting a couple of people in there, if you're both staying in there through the winter and it's damp outside and cold outside you're getting all that condensation. And then you throw in propane heat and now you're adding even more condensation into the tiny house. So. It's just it's a risky thing. The other thing is that you've got to keep that air circulating. So one of the things that we do is we put an air exchanger in every unit. But the nice thing about the electric heaters is electric heaters if they're on, they're going to exchange. And they're going to put in a dry heat versus a wet heat and they're going to also pull moisture out of the air. So if you don't have that and you're just going with propane you're really getting a risk of a lot of condensation in the house.

Prefab review

That makes sense. Are you regularly seeing people use your homes in an off-grid situation?

Tumbleweed

I would say it's probably 20 to 25%. And so that's why we build them so that it's easy to convert. But off the bat, I would say maybe 10 percent have some form of off-grid, actually more than that, it might be more like 25% but it has more to do with the water and the composting toilet. So I'd say a lot of people compost because they don't want to hook up to sewers and then they'll figure out what to do with their gray water. Either they're catching the gray water and dispersing it and carrying it out later or they're using it to garden or something like that.

Prefab Review

Then the final question is what do you recommend from a furnishing standpoint. I don't know if you've actually looked into having furnishing packages, but your homes are so specific and so sort of standardized from a room setup, that in some way for certain people, that would actually be easier and I think some companies do this to just have a furniture package but are there sort of products and um and sort of other interior design things that you think work particularly well for your homes?

Tumbleweed

Yeah, so we actually started doing built-in furniture at one point. And we wound up having to take it out because customers didn't really want it. If they want something they'll be specific and tell us what it is. What I've learned is that most people who are getting a tiny house already have the furniture they want picked out. Either they own it or they've got a pinterest board and the only time that we've been asked to buy furniture was on the rentals where it's a business and you know, they want the house delivered with the furniture in it and that's rare and few and far in between.

Prefab Review

That makes sense, got it. Okay, cool. Are there certain types of things that you think make a lot of sense? Like certain types of sleeper Sofas etc or is it you know, you see all shapes and sizes?

Tumbleweed

Yeah, we see all shapes and sizes. There's really not a whole lot of space for furniture. You're limited, you've got an office, you've got maybe your desk space, right. You might want, you can put like one couch. You really can't bring a table in there. You've got your mattress but maybe you could bring in a bed frame if you have something that would fit. But it's really limited in what you can bring in when you think about larger pieces. It's probably about 3 items of furniture mostly you can fit in there.

Prefab Review

That makes sense. Well, this has been really great. Tanks. You passed the fire round with flying colors. Sort of final question, we ask everyone - what are you most excited about for your company or the industry for the near future?

Tumbleweed

Most excited about. So I'll tell you I nerd out on certain things and so my answer is completely nerdy. I like to build systems. And I'm actually working on this new system for our CRM. So we use a standard CRM and I've been building an extra whole set of programming that works in the background That helps us manage our customers because we have about 100,000 leads - people who've done quotes and that's just too many, so you have to figure out who to contact and when. And so I'm actually really enjoying that.

Prefab Review

There you go. All right, I don't think we’ve gotten a CRM answer yet. Steve, it's been terrific learning about you and your background and Tumbleweed Tiny Homes. So thanks again. For more information, you can learn more about tumbleweed at tumbleweedhouses.com and as always you can visit us at prefabreview.com. Thanks again, Steve.

Tumbleweed

Alright, thanks, Michael. I appreciate it.

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