1 00:00:02,400 --> 00:00:06,760 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:07,160 --> 00:00:09,720 Speaker 2: You may know The Property Brothers from their popular reality 3 00:00:09,760 --> 00:00:12,600 Speaker 2: TV series. Well, now the Canadian siblings are embarking on 4 00:00:12,680 --> 00:00:15,520 Speaker 2: a new venture to invest in entrepreneurs making moves in 5 00:00:15,520 --> 00:00:19,040 Speaker 2: the housing industry. They're partnering up with Groundbreak Ventures to 6 00:00:19,120 --> 00:00:23,080 Speaker 2: launch something called the Healthy Home Innovation Fund. The fund 7 00:00:23,120 --> 00:00:28,240 Speaker 2: hopes to back companies finding innovative solutions that prioritize sustainability, affordability, 8 00:00:28,480 --> 00:00:32,879 Speaker 2: adaptivity and connectivity in the market. Joining us now for 9 00:00:33,040 --> 00:00:37,040 Speaker 2: more are the Property brother That's a lot activities the 10 00:00:37,080 --> 00:00:42,240 Speaker 2: Property Drew and Jonathan Scott, co founders of Scott Brothers Global. 11 00:00:42,520 --> 00:00:44,760 Speaker 2: So tell us about these activities. To you and Jonathan, 12 00:00:45,040 --> 00:00:47,080 Speaker 2: what do people want and how do you get how 13 00:00:47,120 --> 00:00:48,960 Speaker 2: do you give it to them cost effectively? 14 00:00:50,200 --> 00:00:51,519 Speaker 3: Well, I think the biggest thing is we're in a 15 00:00:51,600 --> 00:00:54,200 Speaker 3: period right now where there's so much incredible innovation that 16 00:00:54,320 --> 00:00:57,400 Speaker 3: is going to transform not only how our homes operate, 17 00:00:57,640 --> 00:01:00,560 Speaker 3: how we you know, secure our homes, and also the 18 00:01:00,640 --> 00:01:03,520 Speaker 3: transacting within a home while you're renovating, buying and selling. 19 00:01:03,840 --> 00:01:07,319 Speaker 3: So we're looking for from series to a series A 20 00:01:07,520 --> 00:01:10,360 Speaker 3: right down to seed. We're looking for any companies that 21 00:01:10,400 --> 00:01:12,679 Speaker 3: are providing a service or a technology that we think 22 00:01:12,720 --> 00:01:15,319 Speaker 3: we can get behind and amplify. And that's why we've 23 00:01:15,319 --> 00:01:17,120 Speaker 3: got a lot of interest from investors who are coming 24 00:01:17,200 --> 00:01:20,440 Speaker 3: as well, saying we know there's something here that's got 25 00:01:20,440 --> 00:01:23,040 Speaker 3: a lot of opportunity to grow, and we're just trying 26 00:01:23,040 --> 00:01:25,840 Speaker 3: to find something unique that nobody else has touched on yet. Yeah, 27 00:01:25,959 --> 00:01:27,840 Speaker 3: the main thing actually is, you know, we're looking to 28 00:01:27,920 --> 00:01:30,520 Speaker 3: raise eighty five million, and that's that's just to be 29 00:01:30,560 --> 00:01:32,720 Speaker 3: able to purchase and renovate Michael Jordan's house. 30 00:01:32,840 --> 00:01:35,440 Speaker 4: That was the main reason for the E's that fine. 31 00:01:36,240 --> 00:01:38,200 Speaker 3: I think, like John was saying, for us, you know, 32 00:01:38,240 --> 00:01:40,759 Speaker 3: we've already we've always put family first, and we're really 33 00:01:40,800 --> 00:01:44,160 Speaker 3: interested in finding ways to make homes more affordable, have 34 00:01:44,240 --> 00:01:46,720 Speaker 3: the homework for people instead of them having to work so. 35 00:01:46,720 --> 00:01:48,559 Speaker 4: Hard to afford to live where they are. 36 00:01:48,600 --> 00:01:51,640 Speaker 3: So, whether we looking at sustainability or adaptivity or connectivity, 37 00:01:51,920 --> 00:01:54,120 Speaker 3: there are so many ways for us to bring new 38 00:01:54,120 --> 00:01:56,360 Speaker 3: innovation to the market and then utilize our face and 39 00:01:56,400 --> 00:01:58,320 Speaker 3: our brand, which is a household name when it comes 40 00:01:58,360 --> 00:02:02,640 Speaker 3: to home renovation design, to really help these new companies 41 00:02:02,760 --> 00:02:05,840 Speaker 3: scale up. And I'm excited this is a new venture 42 00:02:05,880 --> 00:02:07,120 Speaker 3: for us. So that's why we look for the best 43 00:02:07,160 --> 00:02:09,000 Speaker 3: of the best partners with Groundbreak for sure. 44 00:02:09,040 --> 00:02:11,600 Speaker 2: For sure, Well you're looking to raise eighty five million 45 00:02:11,760 --> 00:02:14,160 Speaker 2: dollars and put that to work. And I mean there 46 00:02:14,200 --> 00:02:17,240 Speaker 2: must be so many candidates out there working on solutions 47 00:02:17,240 --> 00:02:18,919 Speaker 2: to the home for example, and not just the big 48 00:02:18,919 --> 00:02:22,280 Speaker 2: players that we all know. You know, why would they 49 00:02:22,680 --> 00:02:25,360 Speaker 2: not to be rude, but why would they need seed 50 00:02:25,400 --> 00:02:28,920 Speaker 2: money at this point if it's something that's that can 51 00:02:29,000 --> 00:02:30,079 Speaker 2: generate money on its own. 52 00:02:31,120 --> 00:02:32,799 Speaker 3: Yeah, Well again we're looking, well, there's a lot of 53 00:02:32,880 --> 00:02:35,320 Speaker 3: information out there that just hasn't seen the light of day. 54 00:02:35,520 --> 00:02:38,160 Speaker 3: Or even looking at geokermal as an example, it's not 55 00:02:38,240 --> 00:02:39,959 Speaker 3: cost effective right now. 56 00:02:40,040 --> 00:02:41,160 Speaker 4: So there's a lot. 57 00:02:41,280 --> 00:02:44,919 Speaker 3: There's a lot that is technology, a lot that's sustainably 58 00:02:44,919 --> 00:02:48,080 Speaker 3: based or you know, looking at net zero construction that 59 00:02:48,360 --> 00:02:50,440 Speaker 3: doesn't have the money to grow. And so we are 60 00:02:50,440 --> 00:02:52,840 Speaker 3: looking at our strategic partnerships as well with our fund 61 00:02:52,880 --> 00:02:56,480 Speaker 3: and LPs, you know, whether it's insurance, banking, developers, builders, 62 00:02:56,919 --> 00:02:58,880 Speaker 3: you name it to be a part of this because 63 00:02:58,919 --> 00:03:01,880 Speaker 3: this is something that can help their businesses thrive as well. 64 00:03:01,880 --> 00:03:05,320 Speaker 3: What's interesting as well is we have a situation unlike 65 00:03:05,480 --> 00:03:08,240 Speaker 3: anyone else out there where we're in people's living rooms 66 00:03:08,280 --> 00:03:11,560 Speaker 3: across the country in eighty plus million homes a year 67 00:03:11,800 --> 00:03:15,440 Speaker 3: with our shows, and we get feedback, real time feedback 68 00:03:15,440 --> 00:03:17,359 Speaker 3: from all of our audience. Drew and I received half 69 00:03:17,400 --> 00:03:20,320 Speaker 3: a million messages a week each from fans saying, here's 70 00:03:20,320 --> 00:03:22,920 Speaker 3: what I need at home. Here are the problems we're encountering. 71 00:03:22,919 --> 00:03:24,799 Speaker 3: I wish there was a solution for that. In the 72 00:03:24,840 --> 00:03:28,720 Speaker 3: same boat, we have technology companies, engineers who've created technologies 73 00:03:29,080 --> 00:03:31,320 Speaker 3: reach out to us as a first step before they've 74 00:03:31,360 --> 00:03:34,280 Speaker 3: even gone to look for funding because they have an idea. 75 00:03:34,560 --> 00:03:36,800 Speaker 3: So we really get an inside scoop as to where 76 00:03:36,840 --> 00:03:38,800 Speaker 3: trends are going when it comes to the home space. 77 00:03:39,040 --> 00:03:39,920 Speaker 4: And we've had a lot. 78 00:03:39,800 --> 00:03:42,400 Speaker 3: Of incredible partners as well who have brought us companies 79 00:03:42,440 --> 00:03:44,720 Speaker 3: where they think they see the opportunity for us to 80 00:03:44,760 --> 00:03:47,640 Speaker 3: amplify the message and the product that they have in 81 00:03:47,680 --> 00:03:49,000 Speaker 3: a way that they couldn't do if they just went 82 00:03:49,040 --> 00:03:49,840 Speaker 3: to the open market. 83 00:03:50,000 --> 00:03:52,560 Speaker 1: So Jonathan, on that point, and first of all, thank 84 00:03:52,600 --> 00:03:54,080 Speaker 1: you for one of you shaving so I can tell 85 00:03:54,120 --> 00:03:57,400 Speaker 1: you to a part. But Jonathan that on that point, 86 00:03:57,760 --> 00:03:59,800 Speaker 1: when we talk about sort of what people are looking 87 00:03:59,800 --> 00:04:01,840 Speaker 1: to do for their community. Obviously, I'm sure you know, 88 00:04:01,920 --> 00:04:04,960 Speaker 1: affordable housing or more affordable housing is a big issue 89 00:04:05,080 --> 00:04:07,160 Speaker 1: in a lot of Marcus, certainly out there in California 90 00:04:07,200 --> 00:04:09,600 Speaker 1: where you guys are based here. Some of the ideas 91 00:04:09,600 --> 00:04:11,360 Speaker 1: that you're expecting to generate, or maybe some of the 92 00:04:11,360 --> 00:04:15,120 Speaker 1: ideas you've already gotten, are they targeting that as well? 93 00:04:15,200 --> 00:04:16,279 Speaker 1: Is that something specific? 94 00:04:17,400 --> 00:04:18,159 Speaker 4: One hundred percent. 95 00:04:18,200 --> 00:04:20,160 Speaker 3: So one of the companies that we've acquired is a 96 00:04:20,360 --> 00:04:24,320 Speaker 3: company focused solely on ADU construction and multi family construction 97 00:04:24,400 --> 00:04:27,840 Speaker 3: to offset the housing crisis. What we see out there, 98 00:04:27,839 --> 00:04:30,279 Speaker 3: and Drew and I are both the same. We're total 99 00:04:30,320 --> 00:04:32,479 Speaker 3: data nerds. We dig in and we want to find 100 00:04:32,480 --> 00:04:35,280 Speaker 3: out what's causing the problem and what's a realistic solution. 101 00:04:35,880 --> 00:04:38,440 Speaker 3: Most of the offerings out there are total crap. Either 102 00:04:38,480 --> 00:04:41,880 Speaker 3: the product is going to fall apart, they're overcharging community, 103 00:04:41,880 --> 00:04:44,040 Speaker 3: and a lot of communities really want to spend to 104 00:04:44,080 --> 00:04:46,680 Speaker 3: find a solution for the housing crisis. So we're trying 105 00:04:46,720 --> 00:04:48,200 Speaker 3: to dig in and find out what's going to be 106 00:04:48,200 --> 00:04:50,160 Speaker 3: good for business, what's going to be good for communities, 107 00:04:50,160 --> 00:04:52,880 Speaker 3: but ultimately what's going to actually solve the problem. Because 108 00:04:52,920 --> 00:04:54,919 Speaker 3: we've been waiting too long for someone to actually do 109 00:04:54,960 --> 00:04:56,880 Speaker 3: something that's going to be effective. Well on that baty 110 00:04:56,920 --> 00:04:59,600 Speaker 3: you look here in California. One issue here is the cost. 111 00:05:00,000 --> 00:05:02,120 Speaker 3: Even if you're looking for housing trying to help people 112 00:05:02,200 --> 00:05:05,440 Speaker 3: up the street, just a very basic, basic, small signal 113 00:05:05,560 --> 00:05:09,840 Speaker 3: room bedroom unit, the cost is over eight hundred thousand dollars. 114 00:05:10,200 --> 00:05:11,440 Speaker 4: That's something that we're cracking. 115 00:05:11,920 --> 00:05:15,000 Speaker 3: The housing prices is a massive issue all across North America, 116 00:05:15,040 --> 00:05:17,560 Speaker 3: and so that is one of our verticals to really 117 00:05:17,600 --> 00:05:20,600 Speaker 3: strongly focus and we have strong relationships whether it's federal, 118 00:05:20,600 --> 00:05:24,600 Speaker 3: state or regional here to help work on that specifically. 119 00:05:24,640 --> 00:05:27,760 Speaker 3: So I'm excited again with this panelized system that can 120 00:05:27,760 --> 00:05:29,760 Speaker 3: come into a new way of building your home at 121 00:05:29,760 --> 00:05:32,479 Speaker 3: an affordable rate that's still a solid home. It's not 122 00:05:32,560 --> 00:05:35,560 Speaker 3: something that feels cheap, thin walls, it's a real home, 123 00:05:35,720 --> 00:05:37,600 Speaker 3: but it can bring that price point way down. 124 00:05:38,200 --> 00:05:40,159 Speaker 1: I am curious and drew on that point. And this 125 00:05:40,240 --> 00:05:42,520 Speaker 1: is a broader question just about kind of the state 126 00:05:42,600 --> 00:05:45,799 Speaker 1: of the home building market, home renovation market, if you will. 127 00:05:46,000 --> 00:05:48,400 Speaker 1: We saw prices really get distorted because of the pandemic 128 00:05:48,440 --> 00:05:50,880 Speaker 1: prices for supplies that is has that kind of right 129 00:05:50,960 --> 00:05:53,880 Speaker 1: size itself I mean, is it I guess more normalized 130 00:05:53,920 --> 00:05:55,720 Speaker 1: and what we saw prior to the pandemic. 131 00:05:56,360 --> 00:05:59,080 Speaker 3: I guess it depends what you're looking at for your materials. 132 00:05:59,200 --> 00:06:02,120 Speaker 3: Some in some ways it's normalized. Its timelines are the 133 00:06:02,160 --> 00:06:05,080 Speaker 3: thing too. The timelines were ridiculous for you know, even 134 00:06:05,160 --> 00:06:08,400 Speaker 3: just ordering windows, our timeline was ten times longer than 135 00:06:08,440 --> 00:06:10,600 Speaker 3: what it used to take. It's not just that though, 136 00:06:10,640 --> 00:06:12,680 Speaker 3: which you know, you're well aware, the cost of debt 137 00:06:12,839 --> 00:06:15,080 Speaker 3: is so high as well, and it's so hard for 138 00:06:15,120 --> 00:06:17,719 Speaker 3: a family to look at getting a home or renovating 139 00:06:17,800 --> 00:06:20,600 Speaker 3: a home because when you have expensive materials, long time 140 00:06:20,600 --> 00:06:23,680 Speaker 3: delays and you have expensive debt is just a losing recipe. 141 00:06:23,880 --> 00:06:26,720 Speaker 3: So this listening too is we're seeing a lot of 142 00:06:26,760 --> 00:06:29,240 Speaker 3: the delays coming from labor shortages as well. There's just 143 00:06:29,279 --> 00:06:31,880 Speaker 3: too much work happening and not enough people that can 144 00:06:31,880 --> 00:06:33,880 Speaker 3: sustain the workforce. So we're going to see and we've 145 00:06:33,880 --> 00:06:36,039 Speaker 3: already started to see a real surge in the trades 146 00:06:36,080 --> 00:06:38,120 Speaker 3: as well. People can come out of college and be 147 00:06:38,160 --> 00:06:42,000 Speaker 3: making a six figure salary right off the bat, and 148 00:06:42,040 --> 00:06:44,279 Speaker 3: so I think that's a huge thing too, Balancing the 149 00:06:44,400 --> 00:06:47,000 Speaker 3: jobs out there with the technologies that are coming in 150 00:06:47,040 --> 00:06:49,039 Speaker 3: to make life a little healthier at home. 151 00:06:49,160 --> 00:06:51,720 Speaker 2: Jonathan, One of the small things that people are starting 152 00:06:51,720 --> 00:06:53,440 Speaker 2: to look for the newer things. I mean, it used 153 00:06:53,440 --> 00:06:55,320 Speaker 2: to be that the kitchen was all important, or that 154 00:06:55,400 --> 00:06:58,920 Speaker 2: extra bathroom or that rainforest shower. What are the next 155 00:06:58,960 --> 00:07:02,279 Speaker 2: things that we will be wanting in our homes. Yeah, 156 00:07:04,040 --> 00:07:06,200 Speaker 2: everyone likes the rainforest, so I guess I don't know 157 00:07:06,320 --> 00:07:10,400 Speaker 2: rainforce without the buzz. 158 00:07:11,480 --> 00:07:12,720 Speaker 4: Technology is everything. 159 00:07:12,720 --> 00:07:15,520 Speaker 3: But we're noticing is there's going to be a real 160 00:07:15,680 --> 00:07:20,080 Speaker 3: shift toward things like leak detection and AI driven leaked detection. 161 00:07:20,200 --> 00:07:23,440 Speaker 3: Because water is getting more expensive, the quality of air 162 00:07:23,560 --> 00:07:25,920 Speaker 3: and water at home is going to be incredibly important 163 00:07:26,200 --> 00:07:29,280 Speaker 3: as well. As homes are moving toward an electrified system. 164 00:07:29,360 --> 00:07:31,920 Speaker 3: It's much more efficient and the data that comes off 165 00:07:31,960 --> 00:07:34,960 Speaker 3: of that as well can preemptively catch anything like an 166 00:07:35,000 --> 00:07:38,240 Speaker 3: appliance breaking down or you know, something that could cause 167 00:07:38,240 --> 00:07:41,160 Speaker 3: you a more expensive problem. So technology is like smart 168 00:07:41,200 --> 00:07:44,320 Speaker 3: electrical panels, leak detection. These are all things that are 169 00:07:44,320 --> 00:07:46,840 Speaker 3: really really high on our radar because they're actually going 170 00:07:46,880 --> 00:07:49,960 Speaker 3: to help people in the their budgets at home, but 171 00:07:50,000 --> 00:07:51,240 Speaker 3: they're also going to make life easier. 172 00:07:51,840 --> 00:07:54,320 Speaker 4: And on top of that, for example, battery walls at home. 173 00:07:54,720 --> 00:07:57,440 Speaker 3: Solar is amazing and people are shifting and regulation is 174 00:07:57,440 --> 00:08:00,040 Speaker 3: also making people shift away from gas. But if you 175 00:08:00,280 --> 00:08:02,680 Speaker 3: don't have battery backup, you're really missing out on a 176 00:08:02,680 --> 00:08:05,840 Speaker 3: lot of opportunity to offset your costs at home and 177 00:08:06,160 --> 00:08:08,880 Speaker 3: protect your family. So there's so much excited about I 178 00:08:09,120 --> 00:08:11,360 Speaker 3: would definitely say that that's another reason we're excited to 179 00:08:11,400 --> 00:08:13,720 Speaker 3: start allocating funds from our. 180 00:08:13,680 --> 00:08:16,320 Speaker 1: Fun Yeah, and this is a great idea. And I'm 181 00:08:16,320 --> 00:08:19,360 Speaker 1: just looking through kind of all these materials and preparing 182 00:08:19,400 --> 00:08:21,200 Speaker 1: for this, and I really wish you guys the best. 183 00:08:21,320 --> 00:08:23,400 Speaker 1: I do kind of want to end on a liner note. 184 00:08:23,440 --> 00:08:25,760 Speaker 1: You were joking a little bit earlier, Drew about the 185 00:08:26,000 --> 00:08:28,280 Speaker 1: Michael Jordan property. I don't even know how many square 186 00:08:28,320 --> 00:08:30,240 Speaker 1: feet that is. You can see that you can build 187 00:08:30,240 --> 00:08:32,680 Speaker 1: a lot of affordable homes just out of that property. 188 00:08:32,800 --> 00:08:34,480 Speaker 1: But I mean, for those of us who've watched you 189 00:08:34,520 --> 00:08:36,960 Speaker 1: and seen you guys, you know, you know, tear up 190 00:08:36,960 --> 00:08:39,240 Speaker 1: these homes and turn them into something better. How do 191 00:08:39,320 --> 00:08:43,319 Speaker 1: you deal with a home that is constructed so specifically 192 00:08:43,640 --> 00:08:45,880 Speaker 1: just one person's taste and then have to put that 193 00:08:45,960 --> 00:08:48,120 Speaker 1: home back on the market and make it. I guess 194 00:08:48,160 --> 00:08:50,800 Speaker 1: palatable to someone else or to the masses, if you will. 195 00:08:50,920 --> 00:08:53,360 Speaker 3: You know, it's the one thing we tell clients all 196 00:08:53,360 --> 00:08:55,679 Speaker 3: the time, for twenty years working with clients who've been 197 00:08:55,679 --> 00:08:57,840 Speaker 3: saying the same thing. It's great if you have something 198 00:08:57,880 --> 00:09:00,720 Speaker 3: you personally really love, but you always have to think 199 00:09:00,840 --> 00:09:03,200 Speaker 3: as though you may have to sell this house. What 200 00:09:03,240 --> 00:09:05,160 Speaker 3: if your family grows you need a bigger home, or 201 00:09:05,160 --> 00:09:07,920 Speaker 3: what if you your job transfers you to a different city. 202 00:09:08,160 --> 00:09:10,520 Speaker 3: Always think of what if you had to move so 203 00:09:10,880 --> 00:09:13,160 Speaker 3: that secret man cave that you want and the secret 204 00:09:13,200 --> 00:09:15,600 Speaker 3: panel in your wall or the basketball court in the basement. 205 00:09:15,840 --> 00:09:18,120 Speaker 3: I always bug my friend Michael Boublay because he dug 206 00:09:18,200 --> 00:09:19,920 Speaker 3: out in his basement and put in a full hockey 207 00:09:19,960 --> 00:09:20,760 Speaker 3: rank in his basement. 208 00:09:20,960 --> 00:09:22,960 Speaker 4: He will never see that value back again. 209 00:09:23,280 --> 00:09:26,040 Speaker 3: But it's up to them if somebody wants to possibly 210 00:09:26,080 --> 00:09:28,600 Speaker 3: throw that money away. You know, Michael Jordan makes enough 211 00:09:28,640 --> 00:09:30,040 Speaker 3: to be able to be okay to walk away from 212 00:09:30,120 --> 00:09:30,679 Speaker 3: a few million. 213 00:09:31,240 --> 00:09:32,920 Speaker 4: It's just it's a decision you have to make. 214 00:09:33,040 --> 00:09:35,480 Speaker 3: An easy way to remember is we always tell people 215 00:09:35,880 --> 00:09:38,800 Speaker 3: the more bold you go with an idea in design, 216 00:09:38,880 --> 00:09:40,880 Speaker 3: at home or in construction, the more bold you go, 217 00:09:41,000 --> 00:09:43,000 Speaker 3: the faster, it's going to go out of style, and 218 00:09:43,080 --> 00:09:44,400 Speaker 3: so just be prepared. 219 00:09:44,000 --> 00:09:45,240 Speaker 4: That you're going to spend on it again. 220 00:09:45,480 --> 00:09:46,440 Speaker 1: Yeah, the full. 221 00:09:46,320 --> 00:09:48,000 Speaker 4: Basketball court in the basement is pretty bold. 222 00:09:48,360 --> 00:09:50,240 Speaker 2: Yeah, that's the great wooden floors though. 223 00:09:50,440 --> 00:09:50,680 Speaker 1: Yeah. 224 00:09:50,720 --> 00:09:51,240 Speaker 4: Absolutely. 225 00:09:51,280 --> 00:09:53,640 Speaker 1: I guess if you have their kind of money, you know, 226 00:09:53,960 --> 00:09:55,760 Speaker 1: I guess it doesn't matter here. Why not put a 227 00:09:55,800 --> 00:09:58,280 Speaker 1: hockey rink in your basement or a basketball court? Maybe 228 00:09:58,280 --> 00:10:00,559 Speaker 1: one day I'll get there. Hey, thanks to both of you, guys, 229 00:10:00,640 --> 00:10:03,640 Speaker 1: really appreciate you join us. Drew and Jonathan Scott of course, 230 00:10:03,640 --> 00:10:07,040 Speaker 1: the co founders of Scott Brothers Global. Of course HGTV 231 00:10:07,160 --> 00:10:08,280 Speaker 1: stars as well.