Stephan Shipe
Welcome back to the Scholar Wealth Podcast. This week we begin with a business owner in his mid-40s with around $10 million saved who keeps hitting his financial milestones without feeling any different and wants to know what mistakes people in his position tend to make. Next, we hear from a software engineer at one of the major AI companies heading toward an IPO who's trying to figure out what planning has to happen before the lockup and what can wait until after.

Finally, we are joined by Matt Lutz of Flatwater Homes for a conversation about luxury residential construction, from underground garages to glass-walled natatoriums. So let's start with question number one. I'm in my mid-40s, still running my business, and I've got about $10 million saved at this point. I've gotten to this weird place mentally. When I first hit a million, I remember thinking, once I get there I'll feel different. Then it was, once I pay off my house I'll feel different. Paid off the house. Didn't feel different.

Now I hit $10 million and I already know how it's going to go. For people like me who keep moving the goalpost, what mistakes do you see them make? This is a huge and common problem. And it goes back into the whole money doesn't buy you happiness thing, if you want to run into those scenarios, but it does to a point, right? There's lots of research out there on the marginal benefits of every dollar and how much you need.

But I think the bigger problem is when you think about financial advice as a whole, we have this mental image and we're told time and time again — you need this number. Once you get to this number, you can retire. Once you get to this number, you're going to be done. Even when I'm working with clients, the big thing everyone wants to know is, well, what number do I need to hit? That is the absolute wrong way to think about your finances, especially once you cross past the threshold of actual needs.

And if you're worried about being able to afford food during retirement and trying to figure out where the Social Security check is being cashed and all that, that's very different — that's a number type discussion. But once you start getting to the point where a lot of your expenses are discretionary, you can't tie your identity and your values to a number, because that number is going to keep getting bigger. And this is where you start to see — to your point of what mistakes do we continue to see — one

is trying to tie identity to net worth. It's never a good idea tying your identity to any type of monetary value. Never works. It's actually a risk as well to tie your identity to any type of profession, because then if you ever try to leave that profession, you feel like you're leaving your identity. And never defining what you need from a deeper standpoint. I know that sounds very philosophical — we need to look at what are you seeking in life and what values exist — but it shouldn't be number-defining

because you've already passed that point. So you need to start looking at what does your life look like and then working backwards from there for what number you need. But even that puts you in the same trap, which is exactly what you're saying. If you set this number and say, well, I think I'm going to need these things — I want to have my house paid off, I want a vacation home, I want to be able to pay for the kids' down payments on homes — you come up with all of these different goals and you say, well, $7 million and I'll be able to do that. And then you hit $7 million and you've done all those things,

but you still move the goalpost again and say, once I hit $10 million I'll be happy. And then you're just going to keep increasing your goals. That's not necessarily a bad thing if you realize that you just enjoy the game. And that definitely happens with entrepreneurs. You're in this range — mid-40s, not retiring anytime soon. In fact, if you're a business owner, the odds that you retire anyway are really low. You're going to want to continue doing something. You enjoy building a business. You enjoy all of this. You want

to continue the battle to go forward every day. So that puts you in a really weird spot because everything out there is telling you that you have to retire once you hit a certain number. What I would encourage you to look at is realizing that you probably just enjoy the game. And the problem that makes this harder is that you enjoy the game and you're getting better at it. You're able to make money now. You have processes in place that you've worked hard for.

So it's easier to make more money, and you look at it and say, well, if I stop now, I'm giving up all this potential for that next level. So I would take a step back on this one and realize that you're beyond the point of worrying about a number. The number is irrelevant. You already have the number — that box is checked. Now you just need to get that out of your mind and start thinking about what does life look like now? What do you like to do? What is the game that you like playing in the business? And then go into work realizing

that you're there playing for fun. No one's keeping score anymore. If you're going to continue to keep score, it can still be fun. You can still accumulate the wealth and go up, but the marginal value of every dollar you're adding at this point is not changing your life whatsoever. And that's why you're getting to the situation where you continue to have more money and you're still in the same spot mentally — because you continue to have more money and the value of every additional dollar afterwards is just not there to you. And that's not a you problem. That's just a how money works problem

when it comes to marginal value. So I think it's time to step back a little bit, do some of that wonderful soul searching of what it is that you enjoy, and then start answering those harder questions of what you're actually looking for in this next chapter past that $10 million.

All right. And our next question — this is a good one. I'm a software engineer at one of the big AI companies. I joined about three years ago and we're heading toward what could be the largest IPO in history. If everything holds, my position is going to be worth somewhere north of $15 million. I'm 31, married, no kids yet. I've got friends at companies that already had tender offers and cashed out. They all seem to have done it differently and have very different opinions about what should be done. What should I be doing right now before the IPO, and what can wait until after?

Everyone's going to have opinions on this. Right now in history is a really interesting time because we're getting into an IPO wave. A lot of people think it's random, but IPOs happen in waves because it's when there's cash available for investors to add to risky assets — IPOs are typically risky, companies going public for the first time. So what ends up happening is if you're thinking about being in their position, if you as the company were trying to go public,

you're trying to raise money. When is the time to go raise money? Do you raise money when no one wants to invest anything and everyone's scared about the outlook of the economy? Of course not. You do that, no one's going to invest. Ideally, you go when everyone's just throwing money around, excited about the future, and throwing money at whatever company has AI associated with it. By doing that, you're able to get more money per share of stock when you go public.

So that's why we see this happen in waves. We'll see a lot of companies IPO at the same times. And then you'll have other years — look at 2020 with COVID, no one's spending money, everyone's very risk averse and the IPO market is dead. In your case, there's a wave right now. We're seeing this with SpaceX, we're seeing this with Anthropic, you have OpenAI. This is a common discussion being brought up right now because a lot of people have private shares — as in your case — that you've held. You've been

compensated with all of this equity, whether it's through options or direct equity like RSUs. And now there's an opportunity for a liquidity event. This liquidity event is about to create a significant number of millionaires and billionaires, and it's going to be a crazy time. Now, in your case, what that means is planning needs to start. And I don't want you to wait until after the lockup period to go in and start being able to sell, or at least know what you own.

So the first thing we need to do is take a little bit of an inventory of what you have going on. Do you have RSUs? Do you have stock that's already vested? Do you have ISOs, NSOs? The one that tends to throw people off are the ISOs — the incentive stock options, where you're paid stock options as an employee. And for those unfamiliar, the concept of a stock option is the right, but not the obligation, to buy a stock at a certain strike price by a certain time. So in other words, let's say I have a company

and it's trading right now at $75 a share and I give you options at $75, and then it goes up to $100. Well, you're $25 in the money. You could exercise your option today, buy it for $75, then go sell it for $100, and you'd make $25. What ends up happening is the government allows you to take that spread between the strike price and the actual

value of the stock and will count that as income. And you say, that's fine, that's money you made, that's not a big deal. It is a huge deal. And I'll give you a more extreme example. Let's say your option has a strike price of a dollar and the current market value of the stock is $100. So now you have $99 in gain that's going to be embedded. The day you go and exercise that option, you're exercising at a dollar. You say, that's great, I now own this stock in my account.

I paid a dollar for it but now it's worth $100. So you have $99 of gains, but have you received any money? No, you have no liquidity whatsoever right now. All you did was exercise an option to buy the stock for a dollar and now it's worth $100 in your account. So everything sounds okay there, except the government realizes that you just had a major event that's beneficial to you. So they have this thing called alternative minimum tax.

And what that means is they look at that and say, wait a minute, you just had this go from a dollar to $100, so you have a $99 discount that you were given on this $100 stock. What we're going to do is have you pay tax on that $99. The problem for you is going to be where are you going to get the money to pay the tax on that $99, because you haven't sold the stock yet. So AMT can be really dangerous. And it's where a lot of times you'll see that in combination with RSUs —

people take the RSUs that have been granted and vested, sell those, and use that cash to pay the taxes on the option in their account. The other follow-up to that is if that's the scenario, then why wouldn't you just sell? You look at that and say, well, that's great, Stephan, I go from a dollar to $100, I'll just sell the stock at $100. This is where the ISO factor really comes in. If you can hold on to that stock for one year

from the day you exercise the option, or two years from the grant date — so it has to meet that one-two rule — then it's long-term capital gains on that $99, which is great. So you'll see a lot of people — and this is why I say you need to start thinking about this early — you may want to go and exercise some of those options now because they're at a lower price. At a lower price, that's less AMT exposure that you're going to have, plus

you start that clock for the next year, assuming they've already been granted two years ago, before you can get that long-term capital gains treatment. Huge benefit, but one that really throws people off when you have this AMT exposure because you didn't actually create any liquidity yet, and the government is very much expecting that in the form of tax dollars. So that's a big one. The other things to think about — obviously concentration risk. We talk about it a lot in any of these situations. You're likely going to have a significant concentration

in one stock that is also tied to your actual human capital, your ability to earn. So that's a dangerous combination. We want to get rid of that. Not saying you have to sell everything today, but it is time to start thinking about what is the path forward of getting out of this stuff, as opposed to waiting until later and finding out there are holding periods after the lockup. If you're charitably inclined, you also have the DAF scenario. If you're expecting a huge tax bill this year,

maybe you go and start giving to a DAF. Some of the companies you're talking about have different arrangements where they'll match charitable giving and put it in your name and all those types of things. Time to start having those conversations, because you're going to end up in a situation where there's a huge tax bill that you can mitigate some of that exposure by just planning out early what those ISOs look like, what your RSU vesting schedule looks like, how much concentration you're going to eliminate,

how much you actually need in your account outside of this concentration, and whether or not there are some strategies to be played on the charitable side to help with gifting and a DAF. So lots of good stuff, but now's the time. You need to start building a team, start thinking about who's around you and what type of plan is going to be in place, because it's going to affect everybody — it's going to affect your financial plan, it's going to affect your

attorney and your estate plan, and it's absolutely going to affect your tax planning as well for the next couple of years.

Stephan Shipe
All right, and in this week's From the Field segment, we're joined by Matt Lutz, Managing Director of Flatwater Homes, a luxury residential construction firm with more than 40 years of experience in some of the most technically extraordinary private builds in North America. Matt brings both a builder's eye and a financial background to every project.

Stephan Shipe
Matt, welcome to the Scholar Wealth Podcast. To start off and frame a lot of the conversation we're going to have today, give us your background — how you got into the business, where Flatwater Homes comes from, and what type of work you do.

Matt Lutz
Sure. When I was a kid, I started working in Colorado building complex foundations. I think I started when I was about 15. And I always said I never wanted to work in construction. And then I went to college. When I got out of college, we moved to Seattle, and really the only work that I could get at that point in time

was being a laborer for a mason. And my very first job was doing labor work on Gates' house. This was right around the early 90s when we moved up there. And over that period of time, I got more and more involved with the carpentry and working in super luxury homes of that nature. I did work in the yacht industry

as a carpenter as well, which was amazing. And then I had a very influential client convince me that I needed to go to graduate school.

So I went to graduate school. And when I got out, I started working in industrial construction. I moved and lived around the world doing mostly very large oil and gas projects.

And I took a job to work in an electrical holding company. When COVID hit, I decided I wanted to go back to my roots and get back involved with luxury residential. So

we started the business in June of 2020, right when COVID hit. That was a great experience. The name of the company is Flatwater because when I used to race kayaks, my mind was the most quiet when I was training on flatwater, not necessarily when I was racing whitewater. So we wanted the experience that clients have to be

predictable and flat, and that's how we came up with the name.

Stephan Shipe
That's great. The very theme of most construction projects. And I think most people describe the whitewater aspect of any construction, especially when you're getting into areas that are unknown or haven't been done before. So I like the tie-in there to the kayaking. Can you tell us about — I know one of the projects I was really interested in is you recently completed a natatorium for a family, right?

Lots of glass, a lot of technical aspects to it. Can you walk us through what that project is, what a natatorium is — because I had to look that one up beforehand — and start building from there of not only what it is but how you go about building something like that? And I guess broader into things that are starting from the ground up, very complex, but also completely uncharted waters — if we go back to the flatwater theme.

Matt Lutz
Sure. First off, natatorium — everybody on the team and pretty much every subcontractor calls it the pool house, so there you are. That project started out being designed probably four years before we actually built it. It's a downtown setting, very dense. There's really no

ability to get in or out of the place. And it's in a residential setting, so we have a lot of residential traffic — people going to school, deliveries, et cetera, going up and down the street. And it's also in the backyard of a historically registered home, so the project had to undergo a lot of historic approvals.

It's a fairly contemporary-looking structure. The house is built in the late 1800s — it's red brick with a green tile roof, it's amazing. The property and all the other outbuildings are that style. This structure has a new garage, a kitchen, and then the natatorium or the pool house. The garage and the kitchen are a very black brick that we had

made in North Carolina. And then the pool structure is 100% glass. We went out to two or three different custom glazing design houses and ended up choosing one in Wisconsin. They designed all of the glass panels — each panel is probably close to 1,000 pounds. And it covers the whole area.

And then we have a NanaWall system that goes all the way around. When NanaWall helped us work on it, they said it was the biggest residential NanaWall project outside of Lambeau that they had done. So it was a really fun project. But outside of that, what was really interesting to me was the logistics. We had to dig a mezzanine

for all of the equipment. One of the goals the client really wanted to focus on was making sure it wasn't like a hot house or really humid. You know, you go into these pool houses and they can feel really humid. So we put in a really interesting system — you can't see it, there are really no vents except some right around the outside on the floor, but they're continually circulating air and you really don't feel it.

Through the winter, spring, summer, thunderstorms, we've never had any condensation on the glass. It's actually very, very comfortable. That's incorporated with a hydronic floor heating system, so it's always like 72 degrees in the building regardless of how hot the pool is or how cold it is outside. And then the other thing that was really fun about the project was the client wanted to use an oxygenated pool system.

Most pools are chlorine. You'll see more and more clients use salt. This system uses ozone to clean the water — it makes its own ozone, circulates it through the water, and so there are no chemicals. It's really amazing water. Most of the mechanicals are underground, and they're actually

below the water table, so we had to build a mezzanine structure down below that. You enter it through a back room and can go down in there and work on the equipment, do whatever you want. No one ever knows it, they never hear it, they never see it. So that was a fun project.

Stephan Shipe
It sounds amazing. There are just multiple layers to this whole process. When you talk about the size of it, what are we talking about square footage? Because you mentioned this was one of the largest NanaWall projects in the United States.

Matt Lutz
That's what NanaWall said — the largest residential NanaWall project. It's a big structure, but it's not enormous. I don't do really well with square footage because every project is so different. The pool itself is probably 60 by 30 — it's not an Olympic pool or anything. And then there's space all the way around it with

very large stones. And then there's a really nice living area on the backside with a fireplace and electronics and whatnot, and that's all covered under the glass. To the side of that is a kitchen with laundry facilities and entertainment facilities. So I think it's probably 5,500 square feet, maybe 6,000 square feet.

And really big garage off to the side. That was pretty fun to do as well. So those are kind of three tied-together buildings and you walk between them.

Stephan Shipe
How do you balance, when you're talking to families about something like this — a project that has almost every element as something that hasn't been done before, all these different customizations — how do you balance especially when you're dealing with a historic home, what to spend the budget on from an aesthetics perspective versus continuing with the historic properties of a home, and then also balancing in

the technical aspects and technology components? I imagine you need this stuff to last for a really long time. What does that conversation look like when you're trying to design something like this?

Matt Lutz
One of the things that's interesting about what you just said is on our new builds we offer an indefinite guarantee. So as long as we maintain the property, we guarantee that it's going to work as intended. And that's really important to us. When we go through the process, we do everything very transparently and open book. So

when we were working on the pool, for instance, I think we had four different subcontractors provide proposals for that. And we go through a cost-benefit analysis, looking at the costs and the maintenance and how they're going to construct it and who's good — really kind of like having a scoresheet. And so we'll recommend this person or this entity

to do the work, and we'll sit down with the client. We have an OAC — owner, architect, contractor — meeting. We try to do it every two weeks depending on the client. Sometimes it's once a month, sometimes it's every week. It really depends on what the client needs. But we'll go through the budget in those meetings. We'll go over the schedule, we'll go over quality. And then really we're spending a lot of time looking at all of these different choices —

this is what the green tile looks like, this is what the blue tile looks like, we'll mock that up, we'll say these are the costs here, these are the costs there, and this is how it impacts the rest of the house. And we'll go through that selection process with the client. Some clients are really engaged in that and they have a lot of fun. Other clients default to their design team. We don't do any design-build. We only work with

professional architects or professional designers, which I think is critical in this type of construction. Design-build, in my opinion, is great for industrial work, it's great for commercial work. For luxury residential, you want to be a great builder or a world-class designer, but mixing those two is difficult. So we really rely on our design team to come up with the ideas.

We price them out, we tell them how it's going to perform, and then it's up to us to execute the vision exactly how everybody wants it. We spend a lot of time mocking things up, testing things, and going through that to have those discussions with the client.

Stephan Shipe
Another project that showcases this idea of the design consulting side of things is a garage you built — a 30-car garage, and you had Hagerty, who's been on the podcast before, consult on humidity and the collection. Can you walk us through that project and when you pull in consultants? I imagine it's a constantly evolving

process when you start to deal with this because a 30-car garage — this is also underground, right?

Matt Lutz
Yeah, there are a lot of consultants on that, and the quicker you get your team together at the front of the project, the better the project is going to go. That includes architect, designer. Some people have interior designers, lighting designers, sound engineers. In this case, we had an architect, we had an interior design team.

And then we used Hagerty for some of the HVAC controls to help with the cars. We also used three or four different types of engineers for waterproofing, because that was a big deal — waterproofing your underground. And we also brought in Chubb Insurance. What we find a lot is

the homes that we do, we've tried to really bring in the insurance companies early on because they have a stake in that property and how that property performs, whether it's cars or artwork or whatever collectibles are in those homes. The sooner we get everybody on board, the better it goes. And that should be several months before you even break ground. If you can get

everybody on the same page, starting to have these conversations in a structured fashion, it works out really well. If you try to bring them on halfway through, or you get rid of your architect because you don't want to pay their fee, or you bring in a designer halfway, that creates friction. There's good friction and bad friction. The good friction is when

you have a design team and a contractor and an engineer, and they're arguing about the best solution to come up with the best solution for you, your home, and your lifestyle. The bad friction is when someone comes in and you get involved with turf wars or design changes or things of that nature. So if you can get the team set up upstream, knowing that there's going to be some good friction, that's when things really start to work out and it becomes a more

rewarding project for the clients in the end.

Stephan Shipe
How long does a project like that take — in that particular case, from building out the team to breaking ground, and then breaking ground to completion?

Matt Lutz
You know, it really depends on a lot of different things. The construction of the projects usually isn't that bad. You can usually do really good construction on very large or complex structures in two years. If they're extremely complex, maybe three years. It's the design that goes into it and the thinking upstream. So if you're dealing with historic commissions or a lot of

environmental constraints — we're doing a job in a conservancy right now that has a lot of requirements — that could add a year to the front-end planning. But the construction itself usually isn't too bad. The more time we spend upfront, the better the construction goes, and the better the handoff is at the end of the job.

Fast-track jobs — everybody loves to talk about the concept of a fast-track job, and we've done them. They're usually a little more chaotic and require a lot more effort because the planning just isn't there. You're really trying to plan and build at the same time.

I would prefer to spend the time upfront because it makes the construction easier and more predictable. But you can build a really nice large home in a couple of years if things are well planned.

Stephan Shipe
When you look back at your portfolio of projects, what are the ones that stand out to you as the most remarkable or most unique, that would kind of highlight some of the things that you've accomplished?

Matt Lutz
You know, there's been a handful. There's been some great industrial jobs that really stand out, but that's really not the focus here. There are probably three jobs I can think of. One, when I was a carpenter, I was asked to build a tea house in Seattle for our sister city of Kyoto alongside a really seasoned superintendent who was older than me.

So I learned how to do joinery and build things without fasteners using traditional Japanese joinery. That was amazing. The other project would have been the boat Aviva that I worked on. I was just a carpenter, but I really learned a lot about service and what it means to build at a very, very high level.

That experience probably taught me more about what we try to do at Flatwater than anything else. We have three required readings here at Flatwater for all employees, and one of them is Unreasonable Hospitality. We really try to focus on that. And when I think about that book, it goes back to my experience in the yachting industry. And then the third one — which is actually kind of funny, a lot of my employees tease me about it —

is the pool house, the natatorium. I've built and worked on some of the most amazing jobs, but that's the only project where I would say, if I had to own one of these things and maintain it and live in it, that would be it. It's an amazing project. It's really, really fun. So those would probably be the three. Each job has had

some really fun things. We did a job a couple of years ago that was really fun. The client wanted a Himalayan pink salt wall in his sauna — I'm sure you've seen those on Instagram. And I said, okay, great, no problem. So we started down the path of figuring that out. And we quickly learned that those little pink blocks,

which are food-grade salt, are about $10 to $15 a brick. So to do that wall was getting expensive. And I said, well, this doesn't make sense, this is salt. I bet I can do this for less. And so I ran down the rabbit hole with our project manager — the client didn't know anything about this, he just said, yeah, it sounds like it's too expensive, but we didn't stop. We found

out a lot about salt. We learned a ton about salt. There's actually pink salt and then there's blue salt. Blue salt has a lot of cobalt and you can actually get blue salt bricks, but the only place we could source them from was Iran. So that put that off to the side. But we found a big mine in Pakistan and we said, we need 500 bricks, can you send them? They said, yeah, no problem, but you have to buy a container.

So I scratched my head and said, okay, I'll buy a container. The bricks showed up on site a month later — giant container, the client was scratching his head. When we unloaded all the salt, it allowed us to pick the salt we wanted and make a selection. And then it allowed us to have enough salt that we actually cut them into thinner rectangles so that we could do a herringbone pattern.

We believe — we don't know for certain, but we believe — it's the only herringbone salt wall in North America because we haven't seen any others on the internet. And we did it for free, because I had all the excess salt sold before it hit the ground. We sold it to one of the distributors for like 90 cents a brick. I didn't really care. I just said, we want to give this client a really fun project. That was fun. We try to do that on every job —

we have some sort of memorable feature that the client is really interested in, and we try to pull that off.

Stephan Shipe
That matches perfectly with the unreasonable hospitality aspect. That's required reading here at Scholar Advising as well. When you have that kind of mindset in your work, do you find that it shows up more in the type of work you're doing or just in the relationship with clients and working through those projects?

Because those seem like two different things in your world — there's the finding the blue salt bricks and building out the herringbone wall, that's all the technical side of it. But I imagine the client relationship side is just as important. Which one drives that more, do you think?

Matt Lutz
I think it's different for each person on our team. We joke around a little bit that we have a very neurodivergent team. Everybody's got something they're really interested in — they're really good at tile, or they're really good at paint. Our belief is that the best subcontractors in the world do 98% of the scope of the work they're hired for. So it's our job as general contractors to do the other

2%, whatever is left over. So we end up getting involved in all different trades, all different types. And some people on our team really gravitate toward figuring out what is the technical solution to deliver on the client's vision. And other people on our team really try to get into

what's the client's vision. And then the two come together and they usually work with the design team and off they go. So it's a collaborative effort. I don't think one is more important than the other, particularly with our warranty program. It makes it really hard to not have a focus on the technical aspects of what we're trying to do, because the vision sometimes can be

executed without the technical rigor, but we're always trying to put the two together so that we have a solution that's going to live for as long as the client wants it to. So we try to do the two together. I don't know if that answers your question directly, but that's kind of what's in our head.

Stephan Shipe
Yeah, that makes sense. And when you think about technical execution from the carpentry side of things, what are the things that stand out to you? Because you always hear this — you talk to builders and it's like, well, we need this done and it's painting and they say, we'll take care of that. But then you mentioned carpentry and they say, well, we're not doing that, we've got to bring somebody in for that type of expertise. What are the things that stand out to you where if you walked into a home today, you'd be able to start pointing things out and say, that is done correctly, or this is a common misstep someone's going to fall into?

Matt Lutz
Yeah, anybody can be an armchair quarterback, I think is what they say. Anybody can point out all the flaws. I have one client who teases me all the time because I never go back to the jobs I finish unless I have to do work there, because I psychologically can't walk into those jobs — I just get frustrated with every mistake I made.

And he loves it. He thinks it's hilarious. He likes to invite me over and asks, how many mistakes did you make in this room? And so I think it's easy to point out the mistakes. It's a lot more entertaining and challenging to figure out how to

not have the mistakes happen in the first place. So we spend a lot of time on critical thinking in our firm. If you see something, say something. We just had an all-hands meeting about this. There was a piece of trim

that was a quarter of an inch out. This was in a project we're doing in downtown Denver — I was just there last week, everything was painted, all the plaster was in. And I said, well, this doesn't work. So we've got to pull it out, redo the trim, repaint, replaster that area. It's not a big deal, it's only a day's worth of work. But I can't

charge the client for it because it's rework, and it's something we could have caught four weeks ago when two people on site saw it. I think you're always going to have mistakes, but what does your culture do? How do we avoid them? How do we get out in front of the challenges so that we don't have to tear something apart later?

You've got to spot them before they happen. All of our sites, we try to run more like a commercial organization than a residential organization. So all of our jobs have an on-site superintendent the entire time. And it's his or her job to make sure that they are looking for those quality issues, speaking with the client or speaking with the design team to make sure the vision is on track, with our daily logs and documentation throughout.

Stephan Shipe
You've mentioned the warranty a few times throughout our projects and everything. Can you give us a little insight into what that actually looks like when working with a family continuously after a project like this?

Matt Lutz
Sure. We try to maintain all of our homes. We have a maintenance program, and depending upon the family and the house, some of those houses are used a lot. Some of them aren't used at all — they might be used a couple of times a year. But we maintain the homes. Some homes we're in every week, some homes we're in once every two weeks.

We're in the homes sometimes once a week, sometimes once a month. We go through a maintenance checklist. We notify the client of all the things that are going on, whether it's a drywall issue or a cleaning issue or a plumbing issue. And we say, this is what we should do to fix it.

If it's a warranty issue — bad workmanship on our side — we'll just fix it, gratis. If it's changing filters or making sure that the sprinkler system's blown down, then we contract that out.

And those are the critical things that are necessary to maintain a home. Inspect the roof, inspect the ventilation, inspect the windows, the paint, all the plumbing, and going through that. And if you stay on top of it, your house should last as long as you want it to last. Those are the things we look for, and we work directly with the client to make sure that

the home is maintained. And where we make a mistake and it shows up, we fix it. We just take it apart and fix it. We just had a big issue with a deck where I identified the mistake, our team identified the mistake, we just removed the deck and replaced it. When it's our fault, we don't even ask about it, we just get after it. So that's kind of how our program works.

Stephan Shipe
Perfect. Well, I appreciate you sharing that, and some of the stories today of how you make these projects come to life. Thank you so much for joining us today.

Matt Lutz
Thanks for having me, I really appreciate it.

Stephan Shipe
That's our show. Thanks for listening, and we'll see you next week.