Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: You may know The Property Brothers from their popular reality
Speaker 2: TV series. Well, now the Canadian siblings are embarking on
Speaker 2: a new venture to invest in entrepreneurs making moves in
Speaker 2: the housing industry. They're partnering up with Groundbreak Ventures to
Speaker 2: launch something called the Healthy Home Innovation Fund. The fund
Speaker 2: hopes to back companies finding innovative solutions that prioritize sustainability, affordability,
Speaker 2: adaptivity and connectivity in the market. Joining us now for
Speaker 2: more are the Property brother That's a lot activities the
Speaker 2: Property Drew and Jonathan Scott, co founders of Scott Brothers Global.
Speaker 2: So tell us about these activities. To you and Jonathan,
Speaker 2: what do people want and how do you get how
Speaker 2: do you give it to them cost effectively?
Speaker 3: Well, I think the biggest thing is we're in a
Speaker 3: period right now where there's so much incredible innovation that
Speaker 3: is going to transform not only how our homes operate,
Speaker 3: how we you know, secure our homes, and also the
Speaker 3: transacting within a home while you're renovating, buying and selling.
Speaker 3: So we're looking for from series to a series A
Speaker 3: right down to seed. We're looking for any companies that
Speaker 3: are providing a service or a technology that we think
Speaker 3: we can get behind and amplify. And that's why we've
Speaker 3: got a lot of interest from investors who are coming
Speaker 3: as well, saying we know there's something here that's got
Speaker 3: a lot of opportunity to grow, and we're just trying
Speaker 3: to find something unique that nobody else has touched on yet. Yeah,
Speaker 3: the main thing actually is, you know, we're looking to
Speaker 3: raise eighty five million, and that's that's just to be
Speaker 3: able to purchase and renovate Michael Jordan's house.
Speaker 4: That was the main reason for the E's that fine.
Speaker 3: I think, like John was saying, for us, you know,
Speaker 3: we've already we've always put family first, and we're really
Speaker 3: interested in finding ways to make homes more affordable, have
Speaker 3: the homework for people instead of them having to work so.
Speaker 4: Hard to afford to live where they are.
Speaker 3: So, whether we looking at sustainability or adaptivity or connectivity,
Speaker 3: there are so many ways for us to bring new
Speaker 3: innovation to the market and then utilize our face and
Speaker 3: our brand, which is a household name when it comes
Speaker 3: to home renovation design, to really help these new companies
Speaker 3: scale up. And I'm excited this is a new venture
Speaker 3: for us. So that's why we look for the best
Speaker 3: of the best partners with Groundbreak for sure.
Speaker 2: For sure, Well you're looking to raise eighty five million
Speaker 2: dollars and put that to work. And I mean there
Speaker 2: must be so many candidates out there working on solutions
Speaker 2: to the home for example, and not just the big
Speaker 2: players that we all know. You know, why would they
Speaker 2: not to be rude, but why would they need seed
Speaker 2: money at this point if it's something that's that can
Speaker 2: generate money on its own.
Speaker 3: Yeah, Well again we're looking, well, there's a lot of
Speaker 3: information out there that just hasn't seen the light of day.
Speaker 3: Or even looking at geokermal as an example, it's not
Speaker 3: cost effective right now.
Speaker 4: So there's a lot.
Speaker 3: There's a lot that is technology, a lot that's sustainably
Speaker 3: based or you know, looking at net zero construction that
Speaker 3: doesn't have the money to grow. And so we are
Speaker 3: looking at our strategic partnerships as well with our fund
Speaker 3: and LPs, you know, whether it's insurance, banking, developers, builders,
Speaker 3: you name it to be a part of this because
Speaker 3: this is something that can help their businesses thrive as well.
Speaker 3: What's interesting as well is we have a situation unlike
Speaker 3: anyone else out there where we're in people's living rooms
Speaker 3: across the country in eighty plus million homes a year
Speaker 3: with our shows, and we get feedback, real time feedback
Speaker 3: from all of our audience. Drew and I received half
Speaker 3: a million messages a week each from fans saying, here's
Speaker 3: what I need at home. Here are the problems we're encountering.
Speaker 3: I wish there was a solution for that. In the
Speaker 3: same boat, we have technology companies, engineers who've created technologies
Speaker 3: reach out to us as a first step before they've
Speaker 3: even gone to look for funding because they have an idea.
Speaker 3: So we really get an inside scoop as to where
Speaker 3: trends are going when it comes to the home space.
Speaker 4: And we've had a lot.
Speaker 3: Of incredible partners as well who have brought us companies
Speaker 3: where they think they see the opportunity for us to
Speaker 3: amplify the message and the product that they have in
Speaker 3: a way that they couldn't do if they just went
Speaker 3: to the open market.
Speaker 1: So Jonathan, on that point, and first of all, thank
Speaker 1: you for one of you shaving so I can tell
Speaker 1: you to a part. But Jonathan that on that point,
Speaker 1: when we talk about sort of what people are looking
Speaker 1: to do for their community. Obviously, I'm sure you know,
Speaker 1: affordable housing or more affordable housing is a big issue
Speaker 1: in a lot of Marcus, certainly out there in California
Speaker 1: where you guys are based here. Some of the ideas
Speaker 1: that you're expecting to generate, or maybe some of the
Speaker 1: ideas you've already gotten, are they targeting that as well?
Speaker 1: Is that something specific?
Speaker 4: One hundred percent.
Speaker 3: So one of the companies that we've acquired is a
Speaker 3: company focused solely on ADU construction and multi family construction
Speaker 3: to offset the housing crisis. What we see out there,
Speaker 3: and Drew and I are both the same. We're total
Speaker 3: data nerds. We dig in and we want to find
Speaker 3: out what's causing the problem and what's a realistic solution.
Speaker 3: Most of the offerings out there are total crap. Either
Speaker 3: the product is going to fall apart, they're overcharging community,
Speaker 3: and a lot of communities really want to spend to
Speaker 3: find a solution for the housing crisis. So we're trying
Speaker 3: to dig in and find out what's going to be
Speaker 3: good for business, what's going to be good for communities,
Speaker 3: but ultimately what's going to actually solve the problem. Because
Speaker 3: we've been waiting too long for someone to actually do
Speaker 3: something that's going to be effective. Well on that baty
Speaker 3: you look here in California. One issue here is the cost.
Speaker 3: Even if you're looking for housing trying to help people
Speaker 3: up the street, just a very basic, basic, small signal
Speaker 3: room bedroom unit, the cost is over eight hundred thousand dollars.
Speaker 4: That's something that we're cracking.
Speaker 3: The housing prices is a massive issue all across North America,
Speaker 3: and so that is one of our verticals to really
Speaker 3: strongly focus and we have strong relationships whether it's federal,
Speaker 3: state or regional here to help work on that specifically.
Speaker 3: So I'm excited again with this panelized system that can
Speaker 3: come into a new way of building your home at
Speaker 3: an affordable rate that's still a solid home. It's not
Speaker 3: something that feels cheap, thin walls, it's a real home,
Speaker 3: but it can bring that price point way down.
Speaker 1: I am curious and drew on that point. And this
Speaker 1: is a broader question just about kind of the state
Speaker 1: of the home building market, home renovation market, if you will.
Speaker 1: We saw prices really get distorted because of the pandemic
Speaker 1: prices for supplies that is has that kind of right
Speaker 1: size itself I mean, is it I guess more normalized
Speaker 1: and what we saw prior to the pandemic.
Speaker 3: I guess it depends what you're looking at for your materials.
Speaker 3: Some in some ways it's normalized. Its timelines are the
Speaker 3: thing too. The timelines were ridiculous for you know, even
Speaker 3: just ordering windows, our timeline was ten times longer than
Speaker 3: what it used to take. It's not just that though,
Speaker 3: which you know, you're well aware, the cost of debt
Speaker 3: is so high as well, and it's so hard for
Speaker 3: a family to look at getting a home or renovating
Speaker 3: a home because when you have expensive materials, long time
Speaker 3: delays and you have expensive debt is just a losing recipe.
Speaker 3: So this listening too is we're seeing a lot of
Speaker 3: the delays coming from labor shortages as well. There's just
Speaker 3: too much work happening and not enough people that can
Speaker 3: sustain the workforce. So we're going to see and we've
Speaker 3: already started to see a real surge in the trades
Speaker 3: as well. People can come out of college and be
Speaker 3: making a six figure salary right off the bat, and
Speaker 3: so I think that's a huge thing too, Balancing the
Speaker 3: jobs out there with the technologies that are coming in
Speaker 3: to make life a little healthier at home.
Speaker 2: Jonathan, One of the small things that people are starting
Speaker 2: to look for the newer things. I mean, it used
Speaker 2: to be that the kitchen was all important, or that
Speaker 2: extra bathroom or that rainforest shower. What are the next
Speaker 2: things that we will be wanting in our homes. Yeah,
Speaker 2: everyone likes the rainforest, so I guess I don't know
Speaker 2: rainforce without the buzz.
Speaker 4: Technology is everything.
Speaker 3: But we're noticing is there's going to be a real
Speaker 3: shift toward things like leak detection and AI driven leaked detection.
Speaker 3: Because water is getting more expensive, the quality of air
Speaker 3: and water at home is going to be incredibly important
Speaker 3: as well. As homes are moving toward an electrified system.
Speaker 3: It's much more efficient and the data that comes off
Speaker 3: of that as well can preemptively catch anything like an
Speaker 3: appliance breaking down or you know, something that could cause
Speaker 3: you a more expensive problem. So technology is like smart
Speaker 3: electrical panels, leak detection. These are all things that are
Speaker 3: really really high on our radar because they're actually going
Speaker 3: to help people in the their budgets at home, but
Speaker 3: they're also going to make life easier.
Speaker 4: And on top of that, for example, battery walls at home.
Speaker 3: Solar is amazing and people are shifting and regulation is
Speaker 3: also making people shift away from gas. But if you
Speaker 3: don't have battery backup, you're really missing out on a
Speaker 3: lot of opportunity to offset your costs at home and
Speaker 3: protect your family. So there's so much excited about I
Speaker 3: would definitely say that that's another reason we're excited to
Speaker 3: start allocating funds from our.
Speaker 1: Fun Yeah, and this is a great idea. And I'm
Speaker 1: just looking through kind of all these materials and preparing
Speaker 1: for this, and I really wish you guys the best.
Speaker 1: I do kind of want to end on a liner note.
Speaker 1: You were joking a little bit earlier, Drew about the
Speaker 1: Michael Jordan property. I don't even know how many square
Speaker 1: feet that is. You can see that you can build
Speaker 1: a lot of affordable homes just out of that property.
Speaker 1: But I mean, for those of us who've watched you
Speaker 1: and seen you guys, you know, you know, tear up
Speaker 1: these homes and turn them into something better. How do
Speaker 1: you deal with a home that is constructed so specifically
Speaker 1: just one person's taste and then have to put that
Speaker 1: home back on the market and make it. I guess
Speaker 1: palatable to someone else or to the masses, if you will.
Speaker 3: You know, it's the one thing we tell clients all
Speaker 3: the time, for twenty years working with clients who've been
Speaker 3: saying the same thing. It's great if you have something
Speaker 3: you personally really love, but you always have to think
Speaker 3: as though you may have to sell this house. What
Speaker 3: if your family grows you need a bigger home, or
Speaker 3: what if you your job transfers you to a different city.
Speaker 3: Always think of what if you had to move so
Speaker 3: that secret man cave that you want and the secret
Speaker 3: panel in your wall or the basketball court in the basement.
Speaker 3: I always bug my friend Michael Boublay because he dug
Speaker 3: out in his basement and put in a full hockey
Speaker 3: rank in his basement.
Speaker 4: He will never see that value back again.
Speaker 3: But it's up to them if somebody wants to possibly
Speaker 3: throw that money away. You know, Michael Jordan makes enough
Speaker 3: to be able to be okay to walk away from
Speaker 3: a few million.
Speaker 4: It's just it's a decision you have to make.
Speaker 3: An easy way to remember is we always tell people
Speaker 3: the more bold you go with an idea in design,
Speaker 3: at home or in construction, the more bold you go,
Speaker 3: the faster, it's going to go out of style, and
Speaker 3: so just be prepared.
Speaker 4: That you're going to spend on it again.
Speaker 1: Yeah, the full.
Speaker 4: Basketball court in the basement is pretty bold.
Speaker 2: Yeah, that's the great wooden floors though.
Speaker 1: Yeah.
Speaker 4: Absolutely.
Speaker 1: I guess if you have their kind of money, you know,
Speaker 1: I guess it doesn't matter here. Why not put a
Speaker 1: hockey rink in your basement or a basketball court? Maybe
Speaker 1: one day I'll get there. Hey, thanks to both of you, guys,
Speaker 1: really appreciate you join us. Drew and Jonathan Scott of course,
Speaker 1: the co founders of Scott Brothers Global. Of course HGTV
Speaker 1: stars as well.