Tiny Homes – Selling a Lot of Small Homes Research

A business mentor of mine reached out with an interesting question.

How would I think about selling a lot of little homes?

Tiny homes are my favorite. In 2015, V and I house-sat a mansion in New Jersey for a few months. The lifestyle isn’t ideal for me. Taking care of the place was a part-time job in it’s self. It would be interesting to see market data on the overall housing market in America. Are more people going with smaller homes these days?

Don’t have time to read this whole article? My overall response is to either sell via existing platforms (eBay or Wayfair) or craft a content story that tells the story of successful entrepreneurs who use the homes to build complexes that are cash flow positive.

Market Research

Facebook

250,000+ people ‘like’ the tiny homes blog facebook page. It’s a click-bait page for driving traffic to their website. The website is monetized by AdSense revenue. What does that mean?

Monetizing with AdSense revenue means that the owners of the page and website are probably getting paid on a CPM basis. That means they make a few dollars/cents per 1,000 visitors (or people who click to the page).

Why is this a signal?

If there was a better opportunity to get affiliate income from home sales, the site would probably be monetizing from CPA offers or affiliate commissions from sales. If a home sold for $30,000 and they get 6% of that, they would probably pull the advertising and push direct home sales.

This may be a signal that people are interested in the concept of small homes, but aren’t making the decision to purchase them.

Google

Average monthly search traffic in google is healthy:

Small home market research

Again, this is a signal of interest rather than purchasing decision making…

I notice that the competition is high on google. That means that advertisers are paying to get their products listed on this page. Below you can see jet.com, and wayfair.com are all paying for that position.Wayfair advertises house building kits

Wayfair is a BIG drop-shipping company. If they are paying to be here, they are probably seeing returns from the activity (assuming that their AdSense girl knows what she is doing).

This is a good sign, but when we click the ads, we are taken to pages which sell sheds, not homes. That is a signal that small homes aren’t being sold there. This signals to me that pre-built homes aren’t being purchased on the internet.

Competition – The Small House Market

You can buy pre-built homes on eBay for about $32k.

Clayton Homes sells pre-manufactured homes. Warren Buffet’s BKSH owns Clayton Homes. I remember from reading Mr. Buffett’s letter to shareholders that he is happy with the performance of that specific investment, even during the 2008 housing market downturn. They sell homes ranging from $20-300k per unit.

This company has an OK user experience in the way they provide prices for their Yurts. It would be good to do develop a tool like this on smallhomeshawaii.com.

Target Markets/Selling Strategies

I think there are two strategies to approach the problem.

Selling to entrepreneurs or consumers.

Selling via Existing Platforms

eBay and CraigsList already have the traffic. eBay has customer protection which might support initial sales. Selling via eBay has a very low cost (time and money) to get started. All you need to do is post the listing.

Wayfair is a dropshipping company. If they agreed to list the homes, they manage the whole sales process. As the supplier, you receive money and descriptions for where to send the homes. It may be interesting to connect with them and see if they would be interested in adding the homes to their listing. The benefit of using them is that there would be no website development or brand building expenses.

Content Marketing to Inspire Entrepreneurs

The challenge with housing is that choosing to live in a little home is not a quick consumer purchase. It is a lifestyle decision. The tiny homes model needs to come with individual narratives to individual consumers. Therefore, there needs to be a system to inspire others to build communities with the homes. For that, an entrepreneur would be helpful.

I see the entrepreneur as the girl who wants to buy between 5 and 100 units per order. Their goal would be to buy land, place the homes, hire out the property management and see a long-term income from rents. Ideally, they would have no day-to-day involvement in the business after it was set up.

To inspire these people, there needs to be a story of how it would all work.

Here’s a rough plan on how to tell that story:

Step 1 – Tell the Story with a Daily Content Blog

Partner with a self-starting entrepreneur. Let’s call her Sally. Sally’s mission will be to develop a housing complex using the small homes.

Sally will be committed to:

  • Creating daily content (video log would be ideal) during the building of the complex and posting it to smallhomeshawaii.com
  • Publicly record the income and expenses of the project. Publish a monthly income/expense report

Ideally, at the end of this process, Sally will be able to say, “I built an asset which pays me $5,000 a month without day to day involvement. Best of all, I used Hawaii Small Homes so I was able to get the asset up and running in a few months.”

This will be a self-fulfilling marketing endeavor. Income reports get lots of traffic and drive lots of sales.

Step 2 – Offer a Discount to Those that Contribute to the Web Marketing

The next person who wants to become a developer with the small homes will have the opportunity to do the same. Offer them a discount on the homes if they commit to publishing the story of their success to smallhomeshawaii.com.

As the volume of success stories grow, the website will grow exponentially as a place to sell the houses directly to anyone interested in the buildings.

Also, create a viral video like this one or this one to tell the story of their success.

Interesting Articles Regarding the Small Homes Market

A group in Austin, TX is building tiny homes for the homeless. In San Francisco they are working on building tiny homes for the homeless too.

Short-term rentals are already being done by a small team in the North East called GetAway.

My friend David Vu is doing well with his vacation rental arbitrage business.

Inspiring Computer Programmers

Most of my drive to become a computer programmer comes from listening to, and seeing the work of, my favorite programmers. Here is a list of particularly inspiring software engineers.

Derek Sivers

sivers.org

Derek actually wrote a book that I consider to be the most positive impact on the way that I approach business. The playfulness of his projects makes it fun to follow him on GitLab. Even his own blog is an open source CMS option for anyone seeking to organize their work like him.

David Heinemeier Hansson

david.heinemeierhansson.com

David wrote a great book that inspired me to have more confidence in the viability of remote work. I appreciate that he goes contrary to the the perspective that tech businesses win when they get funding. Outside of his excellent writing, he created a framework called Ruby-on-Rails which is an open-source project that helps people create web apps quickly. The way he manages the technology is facinating.

Matt Mullenweg

ma.tt

As the creator of WordPress, Matt has probably had the largest impact on the internet since Larry and Sergey created a search engine. The way he drives the massive ship that is WordPress is really inspiring and I find his blog is full of useful, heartfelt thoughts. Also, check out Simplenote which is a side project for him, but a really elegant tool.

Sammy Kamkar

samy.pl

His story of writing a worm that took down MySpace is funny, and a bit scary. He makes YouTube tutorials describing exactly how to build robots that open combo locks in seconds and other mischievous activities are great. He uses hardware and software skills to make interesting things and I think that’s useful when approaching problems with technology.

Other Helpful Programming Points of Interest

ChangeLog Podcast | Engineered Truth

Know and interesting programmer, please let me know about her in the comments.

Preparing for Coding Bootcamp

What I'm Doing Now - Computer Programming

Updated July 26th, 2016

Learning to Code

My first week at the offices of AppAcademy started at the beginning of July. We are writing JavaScript algorithms to solve data set problems. Though the algorithm problems are fascinating, I find it’s important to create things that are actually useful. For that I hand coded a CSS/HTML tribute page to my late grandfather. I also just finished hand coding the first iteration of my programming portfolio.

Just the other day, we broke through how we can use the algorithms we’re creating to mix with data. We’re using NodeJS to break this barrier and I find it fascinating! I’ve also developed a good understanding of what JSON is, how it plays a role in the universe of computer programming and why it’s one of the most exciting technologies available. If you’d like to hear what taught me a lot, check out this ChangeLog podcast.

What I'm Doing Now - Computer Programming

What I’m Listening To:

Thank you Derek Sivers. Learn more about this post at now now now.

When my focus changes. You can read about it here.

Embedding 3d Scripts to make Websites Engaging

I’d love to be able to embed elements like this into the backdrops of websites to make them look really amazing and futuristic. This one is a bit dramatic and would be distracting…. but if I could slow it down and make the moving shapes low contrast, I think it would make an amazing website. Maybe a good one page element for a data science company or something like that.

See the Pen Nonsense Clocks by Zevan Rosser (@ZevanRosser) on CodePen.

Programming Scratcher and the Unicorn Wizard Forest Party

The coding continues… this is strange.

At it’s core, programming is the discipline of logical, procedural thinking. If that’s the case, what on earth is the above game doing here?

It’s easy to get caught up with the way we write code. Often the whole structure is broken if we miss a single comma in a 20-line text file. That makes it more difficult as error messages are often more common than actually making progress in a real program.

Scratch is a simple programming language which empowers users to write computer programs without being code monkeys. There is very little typing. To create a game like this, we just drag and drop.

The benefit to coding is that the logical thinking is still a part of the process. You can learn to create using if/then statements but you won’t get jammed up for a missed comma. One learns the data structures without getting stopped by the reality of proper syntax.

To create the music I deconstructed a YouTube tutorial teaching us the Indiana Jones theme track. It was interesting learning a song through beats per minute and rest times. I found myself revisiting lessons learned from traditional sheet music to solve some of the issues with 1/8 notes and 1/16 notes. This is another example of how breaking down ideas so that a computer can repeat those ideas, empowers the creator to understand the actual thing at a deeper level.

Politics and the English Language by George Orwell

Matt Mullenweg was on The Changelog podcast. If you didn’t know, Matt is the creator of WordPress which is the software that provides the backbone for 25% (or more) of the internet. It’s a big deal.

Here is the interview on The Changelog:

I wanted to hear him on The Changelog for a programmer focused conversation. His interview with Tim was great, but it didn’t address WordPress technology specifically. As WordPress is the dominant content management system (CMS) for most of our podcast production clients, it’s important that I stay up to date on what’s happening.

Here is his interview with Tim:

At the end of the Changelog podcast, Matt suggests George Orwell’s Politics and the English language.

If Matt says that is required reading, I’ll take the advice. Here are my notes:

Notes on Politics and the English Language

George Orwell is a great writer. His essay on killing an elephant was one of the most memorable in my life. I’m reminded of it immediately upon starting another of his essays.

To Orwell, the problems that appear in written language are symptomatic of mental vices which affect everyone. He opens with a description of his modern written environment. It sounds honest and subjective.

To take apart bad writing, Orwell provides a numbered list of examples of bad writing. I’ll provide a list of my own reactions to the passages. I can later cross reference my initial thoughts with what Orwell says about them:

  1. Lots of useless wording and double negatives
  2. Lots of colloquialisms
  3. I honestly don’t know what this example is about
  4. Big words when little words would do better
  5. Again. Hard to understand, big silly words and unclear thoughts

Ok so now Orwell defines why these passages are bad. He says there are 2 qualities that effect them all:

  1. Staleness of Imagery
  2. Lack of Precision

These manifest in the following ways:

  • Dying metaphors
  • Operators or verbal false limbs
  • Pretentious diction
  • Marxist writing
  • Meaningless words

I love Orwells imagery. “..a feeling which suddenly becomes stronger at moments when the light catches the speaker’s spectacles and turns them into blank discs which seem to have no eyes behind them.” When reading this, I see what he sees.

He talks about the epistemology of words. Examples being using myosotis instead of “forget-me-not” to name a flower. Greek words sound scientific so the writer gets high class points… but they aren’t saying anything more than the guy who buy’s some “forget-me-not’s” for his girlfriend.

Another crime of language for Orwell: Naming without calling up mental pictures. “Millions of peasants are robbed of their farms and sent trudging along the roads with no more than they can carry: this is called transfer of population or rectification of frontiers.” We do this today in America. Fighting terrorism is, in reality, a flying robot dropping explosives on illiterate village dwellers who hardly have access to electricity.

“The great enemy of clear language is insincerity.” – George Orwell

“If thought corrupts language, language can also corrupt thought.” – George Orwell

“What is above all needed is to let the meaning choose the word, and not the other way around.” – George Orwell

Rules to rely on when instinct fails:

  1. Don’t use metaphors, smilies or figures of speech when you know them from print
  2. Don’t use long words when short words will do
  3. When a word can be cut, cut it
  4. Don’t use passive tense when active tense is possible
  5. If you can think of everyday words, use them. Don’t purposely replace everyday words with scientific or foreign ones
  6. Break these rules before saying anything barbarous

Orwell wants us to think of language as an instrument of expressing (not concealing) thought.

Closing Thoughts

This is probably the best article I’ve ever read in terms of what makes good writing good.

That term still is impossible to define for me. What is ‘good writing’?

Two books come up for me when asking this question. The first is Zen and the Art of Motorcycle Maintenance. This book has plenty of examples of bad writing, but I think it says something valuable about the connection of art and utility.

The second is Stephen King’s book On Writing. I feel like this letter from Orwell is the shorter version of On Writing. If you can read On Writing, do it. If you won’t budget the time, this Orwell letter will do a good job.

Ruby in 100 Minutes (notes)

These are my notes from reading Ruby in 100 Minutes.

Note: I’m only making notes on things that were new to me while reading this. You may learn a lot of interesting stuff if you read the actual source, rather than my notes.

Lessons Learned

Ruby was originally developed by a developer named Matz in 1994 but it didn’t get popular until six years later, when it became a popular programming language in Japan. It remained a Japanese programming language (meaning there was no english documentation for it) until 2004/5 when 37signals empowered an engineer to use the language to build BaseCamp.

Now it’s a popular programming language.

“Ruby is an “interpreted” programming language which means it can’t run on your processor directly, it has to be fed into a middleman called the “virtual machine” or VM.” – JumpStartLabs

Virtual machine is either the IRB (which to me is a stage we go into via the terminal by typing irb + enter) or executing the programs via the command line.

Ruby reads right to left.

Ruby variable should be named after the meaning of their contents, not the type

Don’t include the word “array” when labeling arrays

For example: chocolate_types_array should be chocolate_types

Also, don’t abbreviate. Just spell stuff out.

For example: bkry_reno  should be spelled out to bakery_reno

When selecting positions in an array, you can use negative numbers to select from the back of the string.

For example: with the string greeting = “123456789”


greeting[2..-2]
Prints 345678


greeting[2...-2]
Prints 34567

String Concatenation

“hello, ” + variable | “!”

String Interpolation
name = "Ned"
puts "Good day, #{name}!"
#prints Good day, Ned!

Note: Interpolation tends to be shorter than Concatenation…

“Symbols are difficult to explain” – They are halfway between a string and a variable? They look like this:

:variable

Run the following through terminal… it’s crazy:
"hello".methods
"hello".methods.count
:hello.methods
:hello.methods.count

There is a lot going on in there… going to have to come back to this…

Think of a symbol as a “named integer.”

Two kinds of numbers – Integers (whole numbers) and Floats (have decimal points)

What does this mean – “Because Ruby’s integers are objects they have methods.” – I don’t get it.
5.times do
puts "hello, world!"
end

Simple. This just prints “Hello, world!” 5 times

Blocks are Sets of Instructions – Blocks = parameter passed into a method call

huh?

Blocks can be written many different ways.

Bracket Blocks = 5.times{ puts “Hello, World!” }

 

Ruby Coding Resources

Updated Jan 9th, 2016

These are the resources which I found helpful while learning to program in Ruby. You’ll find each link followed by a short description of what it is and why it is useful. This is a work in progress as I am learning Ruby now.

Ruby Games and Alternative Practice

Ruby Warrior – A sluggish game where you write code to move a warrior through various levels. It helped me to approach programming from the angle of directing objects. Though lots of people talk about object oriented programming, I never understood the meaning of that. This game helped me to ‘get it’. It was while playing this game and going through Learn to Program by Chris Payne that I started to understand the meaning of object oriented programming.

RubyMonk – Looks like an interesting way to build skills. I plan to blast through it after I’m really good at the AppAcademy problems. The idea is that I’ll use them to clear my mind so when I return to the a/A coding interview, I’ll clean them out with a fresh mind. At that point, I’ll apply.

Ruby Koans – This one requires a strong understanding of the command line in order to get started. When I started, I couldn’t figure out how to even start this one, but now I find it really useful. The thing I like is that it’s consistent learning. When you hit a dead end, the program provides you with the answer so you can keep learning. It’s based off running tests and learning from your mistakes. It’s on Github here.

Try Ruby – I just learned about this one. Still exploring it, but it comes highly recommended and it looks fun. (Jan, 9, 2016)

Additional Reading for Deeper Understanding

Learn to Program by Chris Pine – This is an excellent way to begin your programming. If I were to start all over again learning Ruby, this would be the first thing I would read.

Why’s (Poignant) Guide to Ruby by _why (PDF here) – This is a wacky way to learn if you’re into eccentric stuff. Though the wacky analogies are helpful mnemonics, this piece doesn’t come close to the simplicity of Learn to Program by Chris Pine.

Programming Ruby The Pragmatic Programmers Guide – I haven’t yet dug into this one yet but it looks a bit more dense than the previous two. I’m guessing that it provides even greater depth that the pervious two as well. Once I read it, I’ll update this. (Jan 9, 2016)

 

Deeper Understanding:

The AppAcademy.io introduction was quite useful.

Elegant breakdown of what coding is – http://eloquentjavascript.net/

Dense but Useful Description of Binary Numbers – A Tutorial on Binary Numbers

Codecademy’s Glossary is a great resource – https://www.codecademy.com/articles/glossary-ruby

  • Note: When looking for information, use ctrl + f and seek the keyword you want

 

I used this to learn the connection between the programs we write in Ruby and how to make them work in browser:

Getting Started with Ruby

AppAcademy Suggested Reading:

  1. Beginning Ruby
  2. Ruby in 100 Minutes (my notes)
  3. Chris Pine’s Learn to Program
  4. Ruby Monk’s Ruby Primer
  5. Michael Hartl’s Rails Tutorial
  6. Zed Shaw’s The Command Line Crash Course