Episode 38 - Herb Rogove & Wayne Norbeck, Liv-Connected

The Prefab Pod

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Prefab Review

Hi, my name is Michael Frank and this is The Prefab Pod presented by Prefab Review where we interview leading people and companies in the prefab housing industry. Today, we're speaking with Herb Rogove and Wayne Norbeck of Liv-Connected - a modular and tiny house provider out of New York. Herb is the CEO and Wayne is a partner and the director of business and design strategy. Thanks for joining guys.

Liv-Connected

Thank you for having us. Great to be here.

Wayne Norbeck

Yeah, great to be here.

Prefab Review

To start off, it would be great to hear a little bit about Liv-Connected and what you actually do.

Liv-Connected

Sure, I'll jump in. About five years ago or so, I spoke to Jordan Rogov, my son and CEO of the company and also a partner Wayne in the architecture firm, and asked how we could bring architecture, design and health care together; based upon that we sat down and had a lot of discussions. I know Wayne and George have done some work in Namibia and Haiti with their architecture firm so they have some health care experience then we figured out we put that together with a nice modular well-designed system and take it to market, and we've been active now about eighteen months with our products and things are starting to pick up and we're there to fill a gap and hopefully help a lot of people with great housing, quality housing.

Prefab Review

That's awesome, you can see their models at Liv-Connectected.Com. So according to your website, this is sort of manifested through, basically, I don't know what you call them lines or products or whatever. You have your Conexus and your Via lines. Can you talk a little bit about them and how you decided on those as sort of your two initial models?

Liv-Connected

Sure, I'll just start and I'll leave Wayne who's the expert with the details. We decided that there's an interest, especially near the factory, of folks looking for tiny homes and of course there's a big movement across the country. We felt that that would be a great offering. Then some people were looking for larger homes, larger than five hundred square feet or starting at five hundred square feet. The market brought us to that conclusion: both interest and disaster homes to replace the FEMA trailers as well as people who want homes that are a little bit larger, or second homes, or people who're downsizing retirees. And then Wayne and Jordan and Joe, our third partner, came up with a great concept known as the click system and I'll turn over to Wayne to give you more details than the architectural significance of why and how we came up with that.

Wayne Norbeck

Yeah, so when we were designing this prototype and thinking about sort of you know, how disaster relief works in particular. The typical FEMA trailers are sent out on a single truck bed and they're shipped as space so to speak, so it's about eight and a half feet wide, eight and a half feet tall and they're brought out as a single unit, brought to the site and there's been a lot of sort of building science issues with them: mold and so forth, they haven't been a very uplifting type of environment to live with. So our goal was: we take the same type of shipping, that single truck, for the initial prototype and say what size house can we get on it and we developed this click system that Joe Wheeler, our other partner, had pioneered through his work through different initiatives of Virginia Tech and the solar decathlon. And so we're thinking about modular as a set of cartridges or components that can be, instead of shipping the space, you're flat packing everything and you're compressing all the space and therefore, when you come out to the site, you're taking these sort of big chunks of walls and bathrooms and kitchens and you're locking them together. But what you end up with is a house that's almost double the size of what you would get if you just had a single unit on the truck and that's the sort of secret sauce of what we're providing here.

Prefab Review

I may have missed that, that's Interesting. So for your multimodule homes, I was under the impression that everything was built modularly, or are those built on site?

Wayne Norbeck

Yeah, so well, it’s that the sort of components are all built in a factory.

Prefab Review

Right

Wayne Norbeck

So what we'll do is you'll have like for example, the whole bathroom is done as one component, the kitchen wall that contains the cabinetry and the cooktop and so forth is all one unit and then, there's sort of two solid components at either end of the house and then in between them there's roof panels that are kind of like eight feet by eight feet or so, wall panels like that floor panels. And so what you do is you come out on site and you have all these larger scale components…

Prefab Review

Right.

Wayne Norbeck

… that have been done in the factory, that's the kind of modular aspect. But it is a different approach to modular in that you're coming out and then you're assembling very quickly these other components to make the house. So when we did our very first prototype, which was a one-bedroom, we put it together in about 4 hours on site but the great thing is, is that the shipping is so much less and so much more efficient with this model and it allows for, you know, a lot more sort of volume to reach the site at a better cost.

Prefab Review

That makes sense, so I'm still trying to get my head around this. Are we speaking to all your models, or specifically just the Conexus model?

Wayne Norbeck

So that's the Conexus model and so what you end up there is with a sort of full house with that model. We also have a second line called the Via and that's the tiny home that's on a chassis and on wheels, that is done as a full on modular unit.

Prefab Review

Right? Oh okay, so I may not have understood this, so this is helpful. So the Conexus models, they're not on a trailer chassis, do they go on a manufactured foundation?

Wayne Norbeck

Correct. Yeah, then there's, you know the foundation is sort of, we like to say we're foundation agnostic. When we designed the house for the disaster relief model, we looked at doing helical piles that can screw into the ground, and then if you move the house later you can unscrew them and take them out. But you can also use Sona tubes or flat matte slab or you know a crawl space or so forth Even a basement that you can rest the house on top of.

Prefab Review

I see. Okay so, god this is really helpful. So essentially what you're making, I was in the impression that essentially what the Conexus was, and by the way everyone, I'm learning with everybody. So this is actually not 2 trailers connected, this is actually just basically elevated manufactured housing, right?

Wayne Norbeck

Yep.

Prefab Review

Meaning in terms of from a volume perspective is actually like, if I look at your angled two bedroom or your three bedroom this in some ways is a lot like a, I hope this doesn't come across as insulting, a lot like a double wide in terms of just like the volume of space and in terms of how HUD would look at it but this is architectural, it's just more distinct is that is that the right way of interpreting this?

Wayne Norbeck

Yeah, yeah, and it is a different model as you're mentioning, you know where we know the HUD requirements very well about the sort of separate volume, two separate volumes and so forth, but this is a different approach. And what we like about that is that it gives a ton of flexibility. You know if you could start out with a sort of tight house but then actually over time you can literally add on to it with more components so you can start off as a couple and you know as you have children or so forth you can expand the house. But it's also when we're contacted by clients of different needs, we can really provide all kinds of different configurations that can work really well with their site. Even though there's a very standard kit of parts that's necessary to kind of keep cost in line and have the factory be precise and efficient, we're actually able to put them together in a lot of different ways and really customize it for individuals.

Prefab Review

Okay, interesting.

Liv-Connected

And we noticed that's an important concept because even though we start off talking about the base models. Everyone always asks the question; can you add this, can you increase the space in the living area? And the answer is yeah, that we can expand it out. And typically up to fifty feet beyond that structurally and aesthetically it doesn't look as great and so we could put things side by side and, you know one of the other key philosophy is that you know young people want to be able to get into a home that's not overwhelming both financially as well as sizewise. So. You can grow with the house and the house can grow with you as you need, so that is one of the key points.

Prefab Review

Got so when you were talking about assembling something in 4 hours does that include like MEP and stuff like that? Are you just talking about the shell of the home?

Wayne Norbeck

Yeah, it actually does include the MEP. So we spent a lot of time trying to figure out how to integrate the mechanical system.

Prefab Review

Oh by the way sorry to interrupt, MEP stands for mechanical electric and basically, it's just like the internal systems. Sorry, continue.

Wayne Norbeck

Yeah, yeah, so in the base house, above the bathroom, we have a space where the mechanical sort of air handling units are located and we're using a split system. So We have a condenser outside and then it's kind of a ductless system on the interior. And even in the electrical, the way that the electrical is done, what we do is a kind of leave out a panel on each wall panel, and that allows you to have a junction box and connect the electrical, and then that gets covered up with the cladding and so forth. So yeah, all the systems are included in the models that we have right now which is really great because you're literally up and running. You have that kind of you say a half-day period of putting the house together then there's a little bit of sort of trim work that has to be done but you're ready fast and that's been incredibly meaningful for all of our clients because instead of you know, looking at a kind of nine-month process or you know, so forth, they can compress that down to almost nothing, which is really great.

Prefab Review

Who does that work? When you think about this concept of site work, this is not necessarily typical, right? You have the brand or the company that does the design work and they flatpack the kit of parts to the module and then there's sort of a third-party contractor who does the last 20 to 60% of the house depending on if it's modular or a kit. So is that your model or are you all doing this kind of site work?

Wayne Norbeck

Yeah, it's the same model where there is a third-party contractor on site that's doing the assembly and also prepping the site beforehand of course. But what happens is, that percentage of time really shrinks that the contractor is necessary and that's been so key for us that there's very limited work once the house arrives for them to do. Then we also need to do a final inspection out there. We do our progress inspections all in the factory, we work with a company called NTA, National Testing Association, that inspects in the factory for the regulations across the country, so they do all the progress inspections there, bring it out to site then there's sort of the final space.

Prefab Review

This isn't like a state modular thing right, or State manufactured housing thing, where you're getting approved in the factory, right? It sounds like you still need to be approved on-site on this stuff because it's..

Wayne Norbeck

Just for a final inspection, everything is done,but we do have the kind of state of approvals that are happening within the factory before it's shipped out.

Prefab Review

Got it and then, that's interesting. Do you need a crane to put your units together or are these going without a crane?

Wayne Norbeck

A crane is great and it can make it very efficient but we're also able to use a telehandler. We can put them together with that. So there's some flexibility. You know if you're doing something like a larger house or you're doing multiple houses then a crane can be more efficient but a crane is not necessary. We did not use a crane to do our Prototypes.

Prefab Review

The biggest thing that I think that drives half of the companies in the industry nuts, that we do, but is also really helpful, is we try to accurately find out what stuff costs. Because in this industry, it's actually really hard because people understandably, like manufacturers, are like “well I can tell you what my modules cost or I can tell you what my kit costs, but I can't tell you exactly what the site cost is” and I get that. But when I'm looking at your 3 bedroom on your website right now. It says 3 bedrooms, two baths plus utility, 1205 square feet starting at $448,000. Does that $448,000 encompass site work as well or does that just encompass the kit? Does that include transport?

Wayne Norbeck

That's the house price itself. So then what we do is we determine where the site is located, if you're on the East Coast, West Coast, or so forth and then we get a shipping quote for that. And then we also help the clients sort of team up with the local contractor that we were talking about to get the site costs figured out because they can, but it can vary so widely depending on the site configuration. You know, we do give guidance, we provide estimates to our clients on what we've seen in the past and kind of ranges. But of course that all has to be sort of clearly identified.

Prefab Review

So maybe we can if it's okay, maybe we can work through one? So your factory is in Pennsylvania right? Okay so one area fairly close to Pennsylvania that we've done quite a lot of work in, is kind of upstate New York sort of Hudson Valley you know Woodstock, Saugerties that area which is I don't think too far from that, right? But it is what I would call a quite expensive but not the most expensive market. You know? I mean it's not as expensive as the San Francisco Bay Area and it's probably not quite as expensive as the Hamptons or LA but it's more expensive than most other areas. Just from a cost of labor standpoint, if we assume that just the house itself is $448, I mean we assume that we're moving it you know to Saugerties or Woodstock or whatever on a flat lot that we're lucky enough to have like utilities stubbed pretty close to the property etc. what would you be looking at kind of for the rest of the costs?

Wayne Norbeck

You know it depends on topography and so forth. But you know, typically…

Prefab Review

Yeah, but let's assume that this is flat as close to Urban Infill as in that area as you can, so a fairly unchallenging site in an expensive market.

Wayne Norbeck

Right? So you know, it can be anywhere from you know I'd say like $30,000 to $60,000 somewhere in that zone is what we typically see for a fairly standard site.

Prefab Review

And that includes transport and all that stuff?

Wayne Norbeck

Well, transport would be on top of that a little bit. So it's you know it's probably like another 10 grand or so to get it up there.

Liv-Connected

Just to give you an idea. Let's say we go from Lancaster to New York and above would be a little over $2,000 for every five hundred Square Foot flat-pack truck, and what we're using, non-wide load, which obviously decreases the cost a bit too.

Prefab Review

Right. Yeah, you mentioned that there are 8 versus 16 which a lot of companies use. Got it. So that's actually a much better ratio than we see with lots of other companies, in fact. A lot of the companies we see end up being closer to like sixty-forty Fifty-fifty. So that's pretty impressive. So that's how I guess these work. How many homes have you built to date?

Liv-Connected

We've built right now, it's probably more of internal issues, we've just been producing the homes for about eighteen months, probably close to 50, the tiny homes, and we have orders. We're delivering early part of 2024 for about maybe half a dozen or so and we've got a couple in the pipeline that we're hoping it'll come to fruition within the next month or so.

Prefab Review

Then these are the tiny homes or have you delivered into Conexus as well, or is it all the tiny homes?

Liv-Connected

Tiny homes to this point, and like I said we have contracts already signed and sealed and delivered and right now beginning quarter one of 2024 will actually be manufacturing the homes.

Prefab Review

Got it.

Liv-Connected

We just got the permits approved for one of the homes in Vermont this past week.

Prefab Review

Interesting and then you were saying, just to be clear, these end up being considered by the state just like normal site-built homes. Are they considered manufactured homes? Are they considered modular homes?

Wayne Norbeck

Yeah I mean I think they're typically considered modular homes so that’s the designation where you've seen, but you know it can depend on individual sort of jurisdictions.

Prefab Review

Yeah, the big part of the reason that we care about this, maybe you can talk a little bit about the extent that you have orders on these bigger homes. You've dealt with this, one of the things that can be a little challenging about the sort of modular side of this business for customers, is the financing, meaning that more of the costs are incurred in the factory, there's a smaller subset of banks that lend on sort of the modular draw process. Do you have specific lenders who worked with or how has that worked so far?

Liv-Connected

We do have a very strong partnership with the Rocket Mortgage and they'll do it, as long as you have the land, that's not a problem. And if you do need a construction loan, we're working with the US Bank. Those are the two that we've been working with most closely at this point, but we're open to talking to anyone at this point.

Prefab Review

Yeah, totally yeah. I actually didn't realize Rocket did new construction stuff. But yeah, US Bank we’ve seen quite frequently in this market. It would be great to hear a little bit since you're sort of a newer company, and I watched an Instagram store or some type of video about this from your son Herb, about sort of the factory relationship and how you went about creating that.

Liv-Connected

Oh yeah, Atomic Design, they also have a subsidiary of them called Atomic Homes which we work with and very close. Jordan actually, after architecture school, worked with them. He did set designs in New York City and you know they come from the Pennsylvania Dutch area where craftsmanship and carpentry was just extremely well done, the quality and the experience of these folks. It was during covid and no concerts were going on, so Jordan reached out to Daniel who's the CEO of the company and we started talking and came up with some ideas and they'd just been extremely amazing partners to the point now where we recently moved this past winter or this past year moved into an over Hundred Thousand Square Foot factory where we're producing our products and they're used to building quality products that they could put up quickly and take down quickly and get on to the next concert. So with a lot of their expertise, we've developed an extremely nice product.

Prefab Review

Good. So for the tiny homes, it'd be great to hear a little bit about the permitting process for that. What are the uses for the tiny homes that you typically see? Are people just parking them on their land somewhere rural, and not using permits? Are they getting permission? Are they using them in RV Parks? How is this working?

Wayne Norbeck

Ah, yeah I think it's more the latter where you know we're technically classified as a park model RV. So you know when we do sort of site analysis for them, we make sure from a zoning perspective that it's permitted. A lot of times people can also use them as sort of an accessory dwelling on their own land or you know we'll team up with folks who are looking at tiny home communities. Our sales agent actually owns some tiny home communities and that's been a great generator business for us as we got kicked off here. You also have to sort of tie them into the utilities and so forth you got to make sure that that's done above board.

Prefab Review

Got it. So typically these have like normal RV hookups?

Wayne Norbeck

Yeah, yeah, so you have like a waste line and waterline and electrical hookup at you know, kind of each site that you're looking at.

Prefab Review

Got it and that, of course, will be different for your Conexus models right?

Wayne Norbeck

Yeah, well the same thing. It's different in that those are more like sort of single-family situations that you're providing the utilities to, but yeah I mean actually it's not that much different. It's the same exact utilities that we need.

Prefab Review

Got it cool. Let's see what other questions we have. In terms of customizations, one of the questions that we've got mixed answers to is, what's the ability for your homes to handle snow loads?

Wayne Norbeck

The houses are designed, you know, exactly like a regular house. So for the conexus line, we're following all the applicable building codes that you have all over the country. So the structural loads are meeting all of those requirements on the tiny home side. It's quite innovative in that you know a lot of the tiny home industry is sort of almost like glorified shed builders that have been putting these together and when you tour tiny home communities. You will see all kinds of different levels of construction and some of which you're wondering how long it will last. What Atomic has done is they've worked with structural engineers to kind of pioneer a different framing method because the VIAS are not tied to sort of residential building code. They're open to other types of framing techniques and what they've done is developed a whole system using one-inch thick structural plywood which they can have cut on a CNC machine very precisely. And then it's assembled to make the framing of the VIAS and that's all been sort of load tested above and beyond what's required for residential as well and then what's great about it is it's a very rigid and sort of stiff framing technique. And these houses really last as opposed to what you're typically seeing in the tiny home market.

Prefab Review

Got it. That's helpful. Um, let's see, how have most customers found you to date? Is it mostly, I see you've gotten a bit of media, Is it mostly earned media or, how have you got connected to your early customers?

Liv-Connected

Combination. Website, we tried to make the websites appealing so that they understand it's a one-stop shop if you need it. We take them through, they just reach out, we reach back to them. And of course the social media where everyone is and we've gotten quite a few leads from there as well.

Prefab Review

Great, cool. This has been wonderful learning a bit about your company. Anytime we have experts on our podcast, we try to, I mentioned to you how many before we got on how many questions we get from our audience, so if it's cool, can I give you ah both a few questions? Perfect. Okay, I guess one of the questions we get a lot is, about the resale value of tiny homes. To the extent that you know, do you think you can talk about if someone buys them are we looking at a car where it's like you know 20% of the value goes off when the car goes off the lot, or is there sort of another parable like you know closer to a house.

Wayne Norbeck

Yeah, what we've been told from our sales agent is that the houses are holding their value. So it's not like a car, like people can actually build equity and be able to sell them at a very similar or better value than when they're purchasing them. So that's been really refreshing because it's become something where we feel like we're offering a solution you know for the housing crisis for people that need to be in that certain price range. That's a really good alternative.

Prefab Review

Got it. Can you talk a little bit more about the sort of health innovations you have as options for your homes?

Liv-Connected

Absolutely. One of the backgrounds for my professional career has been involved in telehealth and digital health, being involved in that since the turn of the century. And had a company that was one of the first to market at providing health care through telemedicine and one of the things I think is important for us is aging in place. We don't want to be warehoused in a nursing facility. So we feel with the current direction in which digital health is going, we could keep people in their homes. If someone happens to be admitted to the hospital for a major surgical procedure; we could get them out of the hospital quicker to home where we could do remote patient monitoring and this extends beyond the seniors. For example, if you have a child who gets sick, it's usually Sunday at ten o'clock at night, do you want to take them to an ER? No. They're not that sick, you want to sit in their urgent care? No. You can stay at home and have a telemedicine consult and there are digital health tools that we can help you navigate to pit select. And do a full examination where a virtual pediatrician can take a look in the ears and make a diagnosis of an ear infection. Or if you're in your 30s or 40s and you work all day long and you ignore your sinus infection. You can't get to a facility such as an urgent care or a doctor's office. We could do the same thing in the comfort of the privacy of our own home. So the whole idea is as you get older if you fall we could build in using lidar technology developed in Israel where people if they fall to the floor within a minute and half a text message goes out to the caregiver. Be it a family member or physician and they could investigate why that your loved one is on the floor and there are other devices so these are all incorporated as part of an add on pack just like solar or off the grid. And we think it's important because I think more and more people will agree that you could get good health care at home now. Obviously it's an emergency or urgency, you go to the hospital but we feel that a lot of those trips are unnecessary and why can't we do that at home.

Prefab Review

That makes sense. Another question we got was, how should I evaluate tiny house quality? So you spoke a little bit to Wayne about the varying quality of when you go to those tiny home communities, right? It goes from pretty Diy to pretty professional. if I'm someone who just wants a nice, well-built tiny home. What are the specific things potential customers should be looking for?

Wayne Norbeck

Well, I would recommend learning about the sort of company that the home is coming from or the contractor that put the home together as much as possible., you know it's… We take it incredibly seriously. You know how detailed and you know relating all of our work back to building science, energy performance and so forth, but there are a lot of people who cut corners, especially in tiny homes. The building code is not quite there yet, you know as we understand it. The codes are being developed now that will have more of an impact on these houses. So I think you want to do due diligence. You want to go with a reputable company that's providing them and you know ask them. Ask them how the wall assemblies are put together if they're meeting the building code. You know what kind of loads the houses can withstand and if there are examples of people that you can reach out to who have been in them for a long period of time I would definitely recommend that as well.

Prefab Review

Got it. Well thank you guys so much for taking the time to chat with me, the question that we ask everyone, sort of as a final question. It would be great to hear the answer from each of you: what are you most excited about for your company or for the industry in the near future?

Liv-Connected

Oh, for me, it's part of a legacy lifelong dream to be able to provide homes to take care of you normally it’s the other way around you take care of the home and the architectural design that Jordan Wayne and Joe have done, really is an excellent example of how we could take that and then merge it into the needs of health care and quality of life and so that's really exciting. I can see that in the future and as people begin to understand what we have to offer and how they could benefit from that. Again, the house will take care of them.

Wayne Norbeck

I would like to mention that one of the really exciting initiatives that we have right now is that, you know, we learned through this process that the rules across the country are so different and it became challenging for us as a company to deal with that because it's difficult to order materials in bulk, for example, or build a kind of stock of house or something to keep the prices down. So what we're targeting now is looking at sort of HUD-approved houses, and the regulations around those and we've been working with congressional leaders as we speak frankly to try to change those rules and open that up so that it's possible that more different types of housing not just the kind of limitations of what we have right now for HUD open that up so that we can have more of a national standard on housing and we estimate that could have you know anywhere from like a 15 to 30% impact on cost and we just really love that we could. Make an impact like that and improve affordability in this country.

Prefab Review

That's terrific, I'm really excited to see the rollout your multi-module homes and see how this all develops. We're big fans of anyone doing anything innovative here Anyway, Thanks again. It's been great talking to you.

Liv-Connected

Thank you.

Wayne Norbeck

Yeah, yeah, thank you.

Prefab Review

Again for those who want more information about liv-conneced visit liv-conneced.com and as always you can visit us at prefabreview.com, thanks again.

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