In the introduction, Jason Hartman talks about an everything bubble and using a proper measuring stick when figuring out pricing. In the interview segment, he is joined by Jarrett Gross to discuss 3D printed homes. They examine the possible effects of 3D printed homes on the real estate industry, whether it’s close to reality and what’s currently being printed.
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Jason Hartman 0:53
Welcome to Episode 1666 1666. Thank you for joining us today, as we talk about a housing innovation. Is it really an innovation? Is it all it’s cracked up to be? Or not? I’m outdoors, by the way, if you can’t tell met a mastermind conference here in Tampa, Florida. So what is that innovation you ask? It is 3d printed homes? Does it make sense? Is it economically viable to 3d print a home? Now everybody knows what 3d printing is otherwise known as additive manufacturing? Where a printer Think of it like an inkjet printer prints a home in three dimensional space? Yes, that is the 3d printed home that you’ve been hearing about on this show. And you’ve probably been seeing it elsewhere. You’ve been seeing these stories that say, well, this 3d printed home was printed in just two days, and it only costs $10,000. It’s going to revolutionize housing, and make housing prices decline because there’ll be so many brand new, beautiful, although different looking, 3d printed homes available, that everything will change. It’s a game changer. Is it? Or is it overrated? Well, we’ve got a great guest for you today. This will be a two part interview, because we were with him for quite a while. We actually hired him as a consultant as well. He is here with a lot of insights on 3d printed homes. So we’ll get to that in a moment. But I must tell you, there’s been some talk about the housing bubble for sure. There’s been some talk about the stock market bubble for sure. And there has been more talk about what is known as the everything bubble. Is there an everything bubble? Well, I don’t know. Because it depends what the definition of bubble is. a bubble, it implies is something that is going to pop, it’s going to blow up really large, and it’s going to pop, and it’s going to explode. And after all the errors let out of the bubble, that means prices will deflate and people will lose money. And that will not be a pretty sight.
So are these bubbles real or not? Well, it’s a complicated question. And I don’t have the answer for you today. But I do have a couple of observations. Number one, went to the Palm Beach Boat Show over the weekend. They really shouldn’t call it a boat show. They should call it a yacht show, because that’s what it is. Where those super rich can come by these big, beautiful, gorgeous yachts, and they’re all on display. And it’s a pretty incredible show. You know, South Florida is the yachting capital of the entire world. We had the Palm Beach Boat Show. It was a fun event. It always turns into sort of a party. That was a lot of fun. Let’s talk about inflation for a moment. Inflation is part of a bubble, a bubble inflates, right? Nothing complicated there. I bought a drink at the Palm Beach Boat Show. And it was warm out. So I thought well, the ice is going to melt pretty fast. And so I want one of these sort of thermoses that they sell the drinks in? Well, if you want it in the thermos, the drink cost. Ready. $36 Yes, a $36 drink. And then I proceeded to look at the boats. And I kept hearing about how there are so many shortages and how it takes so long to get your boat or yacht nowadays. And I talked to yacht brokers, and they said business is absolutely going through the roof. It’s on fire. Everybody’s ordering boats. They’re paying premium prices and there’s a long wait if He want to buy a new one. So that has buoyed the used market. So the Pre Owned yachts are now more expensive, very similar, very reminiscent of the cash for clunkers program. Under comrade Obama many years ago, of course, just add a couple of zeros, but same idea. And then today, here at my mastermind meeting, my friend, Robert, he saw me wearing one of my nice watches lately, I just wear an Apple Watch, mostly. But he saw me wearing one of my nice watches a couple of years ago, and I told him, I was gonna buy an Apple Watch. And he says, Well, I want to buy that, that AP watch from you. So you know, for a couple of years, we’ve been going back and forth on this topic. Anyway, I brought it with me. And I brought it for him to take another look at. And I asked him if he wanted it. And he says, Yeah, so I went online, started looking at the prices. And I could not believe how much the price of that watch went up. I was absolutely amazed. Now it is beautiful watch. But I kind of had been reading about how Apple has really disrupted the Swiss watch market, and made these prices decline. And how the game changer of a software base watch is a disruptive idea. And it will change everything. Apparently not.
What does this all mean? Does this mean there is a bubble? You know, I gave a presentation today. And I’m giving another one on Wednesday to this group. And I talked about the measuring stick, and how to understand the value of anything, we need to make sure we are not just using one measuring stick, the US dollar. But we must use multiple measuring sticks. I mean, think about it, when you try to determine the value of a house, you do it with one of the three approaches that people use to value real estate, the comparison approach. So when you look at a house, you check the comps. If you want to know what your house is worth, what it’s selling for you check the comps, the comparisons, the comparable properties, you’re not going to just check one, you’re gonna check three of them, at least right you’re gonna look at three comparisons. Well, why is it that when we try to value anything else, we only check one real comp. And what I mean by this, if you’re in the United States, the comps you usually use is the US dollar. But what you must realize is that the US dollar is a moving target, the value of the dollar changes constantly. So should we compare the price of a house to just the dollar? Or should we compare it to oil, gold, corn, soybeans, lumber prices? Well, that might be self referential, as we’ve talked about before, but maybe we should price it in euros or yen, or pesos, we need to make sure our measuring stick is not the problem that we are getting a good source of valuation by having an accurate measuring stick.
You know, one time I ordered, I can’t even remember what the product was. But I ordered some product on Amazon. And it was clearly made in China. And this isn’t really a criticism of Chinese products because China make some great products. However, there are some real hokey ones too. And this product came with a little tape measure, I can’t remember what the product was. Maybe it was like a picture frame or something or picture hangers. I don’t I don’t know what it was. Anyway, it hadn’t little like throwaway tape measure. And the tape measure just seemed off to me. So I put it up against a ruler. And I found that the tape measure was actually inaccurate. Imagine if I had used that tape measure. And I had actually relied upon it relied upon its wrong measurement. I measured it against a ruler that I’ve used before and I trust and it was wrong. What if the dollar is the wrong measurement? It’s a good question. We’ve got to make sure we use the right measuring stick when measuring anything. And we should make sure we use multiple measuring sticks. So I’m going to have more on this for you. In fact, I’ll probably take the recording from my speech today and play it here on the podcast or on the YouTube channel. So look for that. But today, let’s get to part one. A Jarrett. Our guests will be with us on Wednesday as well for part two. But let’s listen to part one. And let’s see learn a little bit about 3d printed houses and let’s decide if they are a revolution or if they are just overrated and if it’s just a lot of hype i’ll let you decide if you missed our webinar last week just go to jason hartman.com slash fund as we have a replay recording up for a few days jason hartman.com slash fund a lot of you had signed up for the funding so enjoy that and without further ado let’s get to our guest and let’s talk about 3d printed homes.
Welcome, everybody. It is my pleasure to talk to you today about 3d printed housing. I have been following this for over 10 years in terms of the housing aspect of 3d printing but i’ve been following 3d printing technology for maybe i don’t know 17 or 18 years i’ve been fascinated with it and it’s coming. I’m not sure if you’re going to hear it’s quite here yet for housing maybe you will that’s up to what Jared says but we’ve spent a lot of time researching his content and talking to him it’s just a great pleasure to have him here on the show with us today. Jared, welcome. How are you.
Jarrett Gross 11:12
I’m doing well. How are you, Jason.
Jason Hartman 11:13
good you’re coming to us from austin texas right
Jarrett Gross 11:16
yeah this week i’m in austin texas it’s been different almost every month this year as i’ve been chasing different 3d printed construction projects around the country
Jason Hartman 11:24
right and around the world actually so i’m sure we’ll hear about that we’re gonna look at some of your videos and and you’ve just done a great job at this where do you actually live do you live in austin
Jarrett Gross 11:35
i’m originally from new jersey north new jersey kind of by new york city area
Jason Hartman 11:39
give us a little bit of your background i mean you’re not in the 3d printing business per se and it’s not really your background isn’t it but you got you became fascinated with the technology as have i how did you come to this and what tell us about your education and such
Jarrett Gross 11:55
yeah so in the past years i’ve worked in construction labor jobs construction management jobs starting in college and i guess it was around a similar time that i really discovered 3d printed construction from facebook video one of those like $10,000 house videos which turned out to be a myth but a myth a total myth
Jason Hartman 12:15
i’ve seen those too and everybody sends them to me and say jason isn’t this going to disrupt the housing market no i don’t think so but
Jarrett Gross 12:22
a lot of people complain about that often and it’s definitely the result of some poor journalism but it’s something that i’m almost thankful for because it was like a clickbait that really spurred the industry and without it i don’t know if so many people would have gotten involved i don’t even know if i would be involved so thanks to whoever wrote that misleading headline right after doing some more research i discovered the $10,000 house was a myth but i was still enthralled with the technology and the idea of automating construction especially with all the economic factors right now in the construction labor force and the construction materials costs arising i just think that at some point down the line there’s no way construction won’t be automated so i want to be there when that happens right
Jason Hartman 13:04
good stuff so what are you doing now then i mean you’re you’re consulting with us which is great we had a consulting call with you yesterday and you’ve given us a lot of tips and insights into the industry i’m fascinated with to i have been for a long time what do you do now
Jarrett Gross 13:20
right now i’m going to these various projects and i have my own podcast where i have the ceos of companies that are either building 3d printers or construction companies doing the projects just to try to talk about and expose some of the details that people aren’t necessarily privy to i guess in the beginning it started with i paid $30 to win sunday at a tour of their facility didn’t really know anything about videography or cameras or anything but i knew that i was there at the site and that was an opportunity not everyone got to have so i thought i could share that with people and after that it kind of had like a snowball effect where that got some views and the views then gave me more exposure to more companies and now it seems like i’ve just kind of become the youtube guy for 3d printed construction
Jason Hartman 14:03
sure that’s great and just so listeners and viewers know when sun is the chinese company that has built the largest 3d printed home in the world i believe i spoke with him last week and you know had an interesting call with him as well go ahead if you’re ready and share your screen and you’ve got some videos to share with us today and a couple of charts and graphs to i believe and we’re looking forward to seeing that
Jarrett Gross 14:29
here’s the very first video that i ever posted on youtube here at the twin sun facility in shanghai china so in this facility i got to see all the different stuff they’ve printed they had a lot of small prints this is some stuff that would go in the ocean to it’s actually like a retaining wall that you might see at a jetty or something like that they’ve experimented with all kinds of different things they had $200 million of funding so with that money they basically just printed everything they could trying to figure out where the best value propositions where this is a smart toilet that operates with like mulch
Jason Hartman 15:03
that doesn’t have anything to do with 3d printing or toilet. Right? The building
Jarrett Gross 15:06
is printed the toilets not okay. I think that’s been for like third world countries without access to plumbing necessarily. So then you go on to these 3d printed houses that they have. They’re like little studios, kind of,
Jason Hartman 15:19
actually, let’s just pause for a moment. Maybe some people don’t even know what 3d printing is. Okay? So let’s just explain that contextually. This is also known as additive manufacturing, okay, where basically think of like an inkjet printer that you have printing on flat paper. Well, this prints in three dimensions, where it basically prints maybe with concrete or other materials, composite materials, even metal, and it can build a three dimensional structure. You know, 3d printers are used to build a lot of small things. Now, I was talking to an orthodontist recently. And he 3d prints retainers, for your teeth, your mouth, and so forth. But these are 3d printed houses, office buildings, things like that. Is there anything more you want to just say, to tell people what 3d printing is, before we dive into the
Jarrett Gross 16:10
Yeah, I think most people have heard of typical desktop, 3d printing in plastic to consider this, they just have to scale it up in their minds. And most of these printers are just large versions of that kind of a gantry system. And instead of plastic, you’re printing and concrete. And so it doesn’t harden immediately. It’s not heated at the extruder head, it does emit heat, because as concrete cures, it emits some heat. But the process while being very similar on a macro scale, there’s a lot of subtle differences that I don’t think are too important for the average listener.
Jason Hartman 16:40
Great. So go ahead and show us more on the video.
Jarrett Gross 16:43
Yeah, so the homes that they had in China, they said these were built for $10,000. Each, I’m pretty sure that that was a claim they made just to be on par with the other companies publicity, unless it’s just coincidence, I don’t know. But they’re not mass producing them. China’s amazing at construction, they’re known for shenzen speed is one floor a day, they’ll build. So they’re definitely some of the biggest innovators. But this is all within their their facility where they’re experimenting with is technology not being brought into the real world here some foundation work that they’re doing with printed concrete that was printed off site, and then brought on to the facility. And then they also have a really big building that they’re working on, that uses mostly precast concrete, and some printed columns, and mostly just decorative stuff. So as we go into the next slide, you can see around 1996, Contour Crafting claims to be the first company to do kind of contemporary 3d printed construction, there was one patent from a guy in 19, the 1940s for a concrete printing apparatus that never really got off the ground. But it’s tricky, because a lot of people claim to invent it have the first 3d printed house, it’s really difficult to truly track back the origin or the true inventor of who did it first, in 2004, when sun develops their print nozzle. And then since then, recently, the number of projects is just skyrocket, and now tons and tons of people are getting involved.
Jason Hartman 18:18
Okay, so it was really when sun in 2004 that had the print nozzle for, like residential construction, right before that 3d printing was pretty much a desktop type of application. Right? Yeah, that’s
Jarrett Gross 18:33
valid. I think there were other uses for 3d printing that were maybe more large scale, Autodesk has invested in a bunch of companies doing different types of materials and different scales. But when son was definitely early to the game, not as early as Contour Crafting, obviously. But when it comes to housing and building real estate when son was pretty early to the game there.
Jason Hartman 18:51
Okay, great. Before we get too into the weeds on, you know, what’s going on with the industry, you just have tremendous insight on all this stuff. And we’re glad to have you to share it. But let’s just kind of back up and talk about the macro view. And like what this means to people watching and listening to this, what this means to real estate investors, what it means to, you know, for affordable housing and so forth. Because, you know, one of the key components of real estate value for investors property, for example, is that there is a cost to build it and a cost to create it and the land that has value. The big question is, would 3d printing disrupt this and make it a whole lot cheaper to build a home than it is today? And this is very misleading folks. I actually kind of wish it were true, because I think it just be really good for the world and I think would give people a lot more discretionary money to spend on a lot of other things or to build more fabulous houses than they live in now and so forth. But you know, when you hear these prices quoted for that $10,000 Home, that’s just for the structure, right? That doesn’t include plumbing, electrical Foundation, land, engineering, all kinds of imaginary number
Jarrett Gross 20:07
for publicity. Even the structure may not necessarily be achievable at that costs the material because it’s made in such tiny batch sizes. It’s a custom concrete, it’s quite expensive. I hear what you’re saying completely. And that’s my vision, ultimately, for the industry is an affordable housing solution. If it doesn’t get there, eventually, then I definitely chose the wrong fields. But I’m thinking that it’s kind of like the light bulb. So after they invented the light bulb, whether it was Edison, or he stole the idea, whatever,
Jason Hartman 20:37
probably stole it from Tesla,
Jarrett Gross 20:38
but okay, after making it emit light with electricity, it took 100 more models to achieve a light bulb that was cheap enough to be adopted by environment. Yeah. So I think this is kind of similar, where we’ve had a couple of 3d printed houses, maybe there’s like, half a dozen overseas. Now we have five in America. And I really think it’s going to need to hit that 100 Mark, to really discover all of the various efficiencies and mine for the value that this technology has to offer.
Jason Hartman 21:10
Okay, that’s good. So, I mean, the $10,000 houses that just a complete lie, then, yes, yeah. Okay. Are they somehow kind of, you know, fudging on that number, like they couldn’t even build the structure for it? You don’t think because it’s not just regular concrete, it needs to be a special type of concrete?
Jarrett Gross 21:30
Well, the thing is, it wasn’t the companies that were claiming to have built a 3d printed house. Initially, it was some journalistic outlet. When I talked to iKON, I think they had said, there was like a claim of a $4,000 house, but that was a rounding error. It was supposed to be they missed a zero, it was supposed to be $40,000.
Jason Hartman 21:48
Wow.
Jarrett Gross 21:49
And that was for the structure without it wasn’t a complete bill that didn’t include the land, obviously, or the utilities necessarily. And so it’s not a lie, per se. It’s not that these companies are trying to deceive. But it’s just that what catches the attention. Like somebody wrote that article, it probably got 10 times more clicks than it would have if the number was accurate.
Jason Hartman 22:10
Yeah, sadly, that’s the world we live in. But yeah, so world of hype. Okay. All right. Let’s go ahead. Anything else you want to talk about on this chart?
Jarrett Gross 22:19
No, I think that’s all this slide in the next slide, really just demonstrating the increase in interest. This is the Google search traffic. So you can see back in 2016, or 2015, relative to now the traffic was very low for 3d printed houses. And then this is right where the $10,000 house article came out. So there was that huge spike right there. This might have been the $4,000 house claim, but either this one or this one, these were the two big journalistic pushes many years ago, this is around the time I discovered the technology. So instead, it was kind of flat. But recently, with the announcement of the Sq 4d printed homes in New York and the icon homes in Austin, there was a spike again. And it’s a sustained spike. So the traffic has been consistently like four or five times higher than it was before. So when you see trends like this in Google search, a spike, but not just the spike, a sustained spike, it generally is a sign of a something a trend that’s emerging in the world. Okay, so now here’s the first house I visited in America, this one was conveniently located only an hour and a half away from my home. So I took some drone footage and walked around the interior, it was built by Sq 4d with this printer here. It’s disassembled there, but before it had like, been much taller, obviously. And it’s on tracks. So the tracks were set up lengthwise on either side of the building. And had they wanted to, they could have extended those tracks to infinity, and printed as many homes in a row as they had wanted, right. Either one huge structure or a whole bunch of this could be a way to develop subdivisions, where you could just put a track and go down and print one home and then print the house next door and the next house in the next house. It’s like when I went to the Toyota factory in Japan, you know, that was just so impressive how different cars, they go down the line and the robots can just assemble a completely different kind of car. And the next one’s completely, you
Jason Hartman 24:21
know, they’re not all the same. They’re not all Model T’s right? It’s amazing how, how specialized they can be. And here they’re building the 3d printed structure except the roof, right? The roof is traditional, obviously.
Jarrett Gross 24:34
Yeah, the roof is just a typical is like a barn roof or something like that. Different companies use different roofing solutions. It’s not something that’s been innovated or really considered much because there’s still so much work to do with just the printed walls. So they have a few walls in here since then, that they’ve spackled over because i mean i don’t know if you can really see clearly but in the back, it’s not like the smoothest lines necessarily. They printed out without a tent so they can finish this with like shotcrete or spackle and get just a typical smooth concrete finish
Jason Hartman 25:06
so what are some of the challenges they’re having like you mentioned the walls are a challenge enough they can’t do the roof in 3d printed they do have concrete roofs by the way you know i’ve researched this and in for example the beautiful famous sydney opera house in australia is a concrete roof so that is something that is done tremendous insulation by the way what are the challenges just with the walls i mean getting them even getting the look good of course if it’s the standard 3d printing it’s like we see on the screen now they’ve got these sort of layers of like a tube of toothpaste if you were squeezing it out and putting another row on top and another row on top of that it’s definitely not what people expect in a traditional home
Jarrett Gross 25:46
one of the big things is balancing the cost of the material with decreasing the likelihood of a crack so concrete cracks pretty much by law it always cracks eventually and whether it’s a micro fracture or a noticeable fracture it’s pretty challenging to have a concrete mixture that won’t crack and you can put supports in rebar supports fiber supports but unless whatever you’re supporting it with his intention when the concrete is cured it’s not going to prevent a crack it’s just going to keep it together after a crack so people obviously aren’t going to be comfortable with visible cracks in their home and mitigating this whether it’s with some kind of paint just to go over it or something you fix after the fact that’s a pretty sizable concern i
Jason Hartman 26:31
would say okay
Jarrett Gross 26:33
so this is a project from a company called emerging objects in colorado they are printing in mud this is really unique because it’s obviously really cheap they’re able to dig up the dirt that’s local around the where they’ve printed and by mixing it with water and straw they’re able to extrude it from a printer and get this result which when you look at concrete it has cement which emits co2 this is like the most sustainable option and the most low cost option now obviously it’s a mud hut
Jason Hartman 27:06
how is it strong enough
Jarrett Gross 27:08
it’s actually surprisingly strong the mixture is called an adobe mixture and historically it was used in kind of like this region in colorado by people that back then texas and mexico wasn’t such a fine line and it was like almost the native americans i’m definitely classifying it wrong but people lived in huts that they made out of this adobe structure so it’s been used for many many years and after it rains and then dries out it actually continues to get stronger is it a solution for a house that you or i would live in probably not right okay so this is a
Jason Hartman 27:44
project nachi i love this where are we going to talk about the golden ratio here we
Jarrett Gross 27:49
can a little bit so 20 additive manufacturing as a company in canada i was really lucky to visit this is their facility in the front there and then in the back is where they printed the fibonacci house they’re really like math and golden ratio so they designed this house to i guess have all those characteristics and theoretically it’s an optimal living space for up to four people
Jason Hartman 28:15
so you know there are some who build and design houses rent and want to live in houses based around fung shui some who just want a nice floor plan whatever that means right and there are certain things that make a good or bad floor plan of course now it’s fibonacci in your house has to follow the fibonacci sequence that’s a pretty tall order but this doesn’t necessarily have anything to do with 3d printing it’s just easier to do this on a 3d printer this could all be done with traditional construction although it’d be very difficult and very expensive
Jarrett Gross 28:49
exactly that was the point of this project it was to find a way to make 3d printed construction more efficient than traditional construction and this their answer to that question
Jason Hartman 28:57
right okay
Jarrett Gross 28:59
so this is their printer they operated within this facility since then they’ve made a model that operates outside they call tillikum so before the concrete prints they need to extrude the material make sure it’s the right consistency there’s two different types of materials you see this one with the red the red extruder that was over here is a two material print and so that one has the regular concrete and then an accelerant the unique part about this is you can print in arches because the concrete will harden instantly because of the accelerant this this method is 10 times more expensive per cubic meter than typical concrete but it does allow you to do some really cool architecture credible stuff so this printhead just the plain gray is just a one material print which is much more cost effective here they’re printing a sign for a playground this is a kootenay salmon it’s like an indigenous salmon to their region and it’s anatomically identical To the the actual fish. So they took a, an outline of the fish and then impose that on a software and then with an outline created this exact fish model. And so is that possible with other methods? Possibly, but if you want it in concrete, creating that perfect form really difficult, really difficult.
Jason Hartman 30:18
Yeah, with a 3d printer, you can do a lot of really interesting shapes. In fact, most of the construction that you see when it comes to the few single family homes that we’ve seen out there have rounded walls. There is one company I remember that you profiled that actually makes square corners. It’s more like a brick shape. I think they do 3d printed bricks actually write
Jarrett Gross 30:42
data Brem does, they like slice the edges of their print, and that gives them really sharp edges. There’s another company fast brick robotics that I guess they make the bricks off site, but they load the bricks on pallets into a truck. And then that truck with a boon arm that stabilizes to a laser in the corner of the build site lays the blocks down in the exact pattern that will construct the building kind of like cinder blocks or bricks and they have indents in the blocks for the wiring and the plumbing to go in the future. So theoretically makes everything just like plug and play for all the different subcontractors. Sure,
Jason Hartman 31:19
This will be continued on the next episode.
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