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The Tracewater Homes Podcast brings you inside the world of modern homebuilding, market trends, and the partnerships shaping the future of residential construction. Known for their innovative steel-frame homes, Tracewater dives into what today’s buyers want, how the industry is evolving, and the experts who help bring every project to life. Whether you’re a homeowner, agent, or builder, this podcast delivers insights, inspiration, and behind-the-scenes conversations from the front lines of construction.
Hey everybody and welcome back to another episode of the Trace Water Homes podcast. Um, today I am joined by an entire team of people that are going to explain to you how easy it is for you to get into a brand new Trace Water home that not only can serve as your primary residence, but can also generate income for you. I am talking about our newest plan, the duplex. And we are going to go in depth as to why this plan is a great option for young people that thought that home ownership was out of reach for them. We're going to tell you exactly why that's not the case and how you can get into your own duplex with our team.
So, we've got a really easy four-step process identified where we're going to help you find a lot, an R2 zoned lot. Um, we're going to help you with the financing. We've got those people already in place. Um, we're going to go through the entire design and build process with you. The build only takes about six months. We need about three months or so for permitting, but for sure in less than a year from the time you find your lot, you could be living in your brand new duplex and have someone else paying you to live on the other side. Um, we also have property management companies that we can connect you with if you were looking to short-term rent the other side or even long-term rent. Um, there are plenty of property management companies around here that do that as well. Um, so let's uh let's get into it. Um, I guess TJ, would you uh start with maybe talking about finding the lot and how we can help, you know, potential buyers identify the right place for their duplex?
Yeah, so our team specializes in land acquisition. Uh, we have found about 800 lots in this marketplace over the last seven years um and help put people in the proper place to be able to develop those lots um and put what they want product-wise on those lots. So, it's kind of our forte. So, if you're a little bit nervous or you've got a lot of questions or if you just want us to go do it for you, you could just tell us an area you want to be at and we'll go find it. Um, we'll get it in front of Brent and and Matt and the Trace Water team, make sure it checks all the boxes for you while you're hands off. Um, and then we go ahead and pass you back off to the Trace Water team to start getting into the design-build process, uh while you're going through your financing with Tammy who knows it backwards and forwards and can do any sort of creative financing that you may need. And if you think that you can't get financing, you're probably wrong because she can work all sorts of magic. So, um I encourage you guys to let us be a part of that opportunity. Let us take the unknown out of it and go find those pieces of property for you and then hand you to the proper team that's all sitting here in this in this place here.
Thank you, TJ. And Tammy, so it it costs a lot of money upfront to buy a duplex. Isn't that right? That's what most people think. No, that's not correct. So listen up loud and clear. So when you buy a duplex for someone making this their primary residence for one side, you can do traditional financing. And what does that mean? Conventional loans are 5%, whether it's a one, two, or three, four unit duplex. FHA is three and a half and VA is 100% financing. So, this allows you to purchase a home and have income on the other side to help you make your payment or pay your payment in your primary residence. It's really an unbelievable. It's amazing. And you see this a lot because, especially on first-time home buyers with what things cost today, you know, a $3,500 payment and they're looking for a $2,000 payment, they can be in a duplex and cut that payment in half. Absolutely. That's huge.
And one thing she touched on that I just want everybody to hear loud and clear as well, VA 100% financing. So, you get into a duplex, brand new, incredible fit and finish. You're living in one side, you put no money down, and you are generating money on the other side and building an asset for your future. Absolutely. Making sure people hear that loud and clear. It is not 20% down and it is not 30% down. It's the minimum down for the program that you're looking at.
Yep, that that is huge. Um, especially, you know, like I said, for a lot of young people that have been told or are under the impression that home ownership is out of reach for them. Um, and that's just not the case at all. Um, there are so many different options out there and and you have a bunch of different programs that you can offer. Um, and then, you know, the making money on the other side of the duplex helping to offset the cost of the mortgage. I mean, it's it's huge. Um, and so it it really is a great way for people to get started, um, not only in having your own home, but now you're getting experience as a real estate investor. Um, and so, and let's add to that. So, you're worried about qualifying? We will actually use projected income for the second unit. So, we'll do a rental analysis and you can use 75% of the number that it comes at to qualify you to offset debt. That's amazing. That is huge. Um, so I mean that that helps essentially for those that don't understand bring your income up, right? It brings the income already in their income which you're using to qualify. Well, you may have a buyer that thinks they qualify for $350, and that's the case in a lot of cases. But when you look at a duplex, you can add the income that's being generated from the from the second unit. So that puts you up to the $500s. Yep. So, I mean, so you got $2,000 a month coming in on one side. $1,500 a month of that is going to be given to you as rental income, increasing your ability in increasing your buying power. Correct.
Yeah. And forgive me if I'm wrong, but didn't you do this? I did. Yes. Yeah, absolutely. So, I currently live in the Trace Water Homes duplex plan. Um, I built it first for myself before we even added it as a plan to our portfolio, um, because I had located these these lots on the west end of PCB that were rated or zoned R2. Um, and so I was allowed to put a duplex on them. Um, and then as we started talking about it, everyone on the team was kind of intrigued and, you know, said, "Hey, I might know somebody that would would be interested in something like that". And so now we've added that plan to our portfolio so that anybody can buy this plan. Um, seasoned investors or new investors alike. Um, but it is a really cool opportunity for new investors, people that are, you know, scared of what investing looks like or being a landlord. Um, they think that it's going to be too much work or that they don't have the money to get into investing. Um, and and that's just not really true at all. Um, we've just told you how we can get you in um with, you know, low down payments. We can use the rental income, the projections from the other side to help you get qualified. Um, and so it is a really great option to kind of get your foot in the door.
Yep. Um, well, I think um you know one thing we should bring up too is how this is such a great first step. You know, so like in your example, um you were able to go in and do that, build the duplex. Um, you live in one side, rent the other side out long term, and now you're getting ready to do another one. Yep. So that means, you know, this is not just a one-and-done deal. This can be done over and over again and give you an opportunity to really start to build an asset base that'll help you build some long-term wealth. Absolutely. Didn't you call it House Hack? Yeah, yeah, absolutely. I like that, House Hack. That uh I think that actually maybe originated in like the Bigger Podcast or Bigger Pockets podcast. Um, they they started talking about that quite a few years ago: House Hacking. Um, but they were talking usually about buying existing duplexes like we talked about in our last segment. Um, when people hear duplex, they think of like old 1980s. It's run down. It's beat up. It's in a college town. You know that kind. That's right. Um, well, that's what the history was. Exactly. And housing has changed today. You have to change with it.
For sure. Um, and so this is, you know, brand new construction. And Matt, I'll maybe let you talk a little bit about that. Um, but um again for those that uh are maybe hesitant or think that they don't have what it takes to like be a landlord or they're just kind of scared of what that looks like. Um, I mean as I mentioned before, we can connect you with property management companies. Um, but at Trace Water Homes, the the products that we've chosen to use um and the way that we build these duplexes really help to mitigate a lot of um those landlord headaches. Um, I mean, for one, just right off the bat, it's new construction. Um, so you've already reduced the amount of calls that you're going to get right there from, you know, drains leaking or appliances not working. Everything's new. Um, so that's a huge thing right off the bat. Um, and then Matt, I guess I'll let you go into maybe some of the other products that we use that would help, you know, reduce maintenance costs and kind of alleviate some of those headaches for a new landlord.
Yeah, yeah, absolutely. I mean, you know, it starts right from the the structure of the home with the steel framing. Um, it's such a benefit from so many angles. We're talking about, you know, strength, storm readiness. Uh, we're talking about fire resistance. We're talking about uh termite uh res I mean, not just resistant, termite proof. I mean, you know, termites cannot eat steel. Yeah. Um, which is, you know, an awesome thing. Um, you know, we get into siding, roofing. So, I think uh you know, our roof has a 15-year non-porrated wind warranty on it. So, you know, you're living in an area where there's, you know, you're prone to storms and you're not even worried when one comes in because you know that your home's taken care of. The siding has up to a 200 mph impact rating. So, again, you're just not worried. You've got impact windows, so the shell of the home is built so sound that you just don't have any worries with that. And then you look at the finishes on the inside. Um, like Brent said, everything's brand new. Um, you've got really nice LBP flooring throughout the house. You have, uh, you know, cabinets with, uh, soft closed doors, drawers, um, you know, granite and quartz countertops. Uh, you know, tile. You've got all the things that you would see in a really nice custom home. We've been able to take finishes like that and bring it into the Trace Water Home and bring it into this duplex plan as well. So, you're not living in that '80s duplex. You're living in a brand new home that feels brand new. And it's going to stay looking that way for a long time because we've carefully chosen all of these products so that it does.
Yeah, absolutely. And um you know, even like uh the the appliance package, stainless steel appliances, um you know, some of the things that we count as standard, we sometimes forget aren't standard everywhere else, you know. Um, that's right. So, you know, and all and all that stuff ties in to where it comes to him, who's one of the best insurance folks in the game that creates that that sense of less headache and also less cost. Um, what I would be interested to know too is what does the insurance look like? Obviously, new construction, you can hear the the finishes that they're using. Um, but what does it look like with a renter on one side and and owner occupied on the other? Chris? Yeah, let's talk about that. Cuz we were just talking about how you insure my duplex and how we structured that with uh what what did you call HO3 or? Yeah, so a typical duplex is going to, if it's a owner occupied on one side and you're renting the other, the insurance company will actually allow the owner to insure the whole thing on a standard homeowner's policy. And so, if you have both sides rented, it's a dwelling fire or a DP3. And so again, they're they're very similar policies the way they're structured, but the because of the new construction, because of how it's built, the cost is very very low comparatively to an older home or like you guys have talked about these older like '70s, '80s, whatever they might be renovated houses.
Absolutely. And it's it's really cool like the way that mine's set up um is the uh the entire structure is insured and then my personal belongings are insured on my side. But the renters on the other side have their own renter's insurance covering their belongings. So, um you're getting the cover on the entire structure, not just your half. Um, and then your renters only have to worry about covering their personal items that are inside. For sure, yeah. Especially with new, as you guys are talking about, with new investors, young people that are trying to buy property, build a portfolio of assets, it's really helpful to know that if they buy something like this, their their cost is going to be pretty, it's not going to fluctuate a lot. It's going to be pretty stable, pretty fixed cost, which is which is huge, even for, I mean, for older folks that maybe want a one-story property that have a fixed income, too.
Absolutely, yeah. And now you're generating income with the other side. So, yeah, I mean, we talk a lot about younger people with this because that's kind of the been the trend, right? Is that young people are renting, they're waiting longer to get into home ownership. Home ownership seems unattainable. But, you know, there's a whole other category here of, you know, retirees that, you know, like you said, are on a fixed income, but would maybe like to generate, you know, revenue from the other side of of the duplex. And like you said, it's one story, so it's really accessible. Um, depending on the lot, there may be, you know, some topography. Like mine has one step up in, but you're not going up multiple flights of stairs in in this home at all.
And in our market, people when people hear mother-in-law suite, it's usually above a garage that you got to take a bunch of stairs up to. Or even if it's not above a garage, let's say it is on grade, it's usually significantly smaller than the other home that that the primary is living in, call it. So, what this also can do is like for somebody like myself who's got a quadriplegic father, it's like, hey, he wants his privacy sometimes, you know what I mean? So, with that being said, having a caretaker on the other side is always nice. But if you also said, "Hey, I want to move down to the beach, but I've got a handicapped father like myself, or you've got, you know, an elderly parent, but you don't want them to be in a tiny box, or you don't want them to feel like they're being left out in a certain manner". Well, they've got the exact same mirrored product as you do next door, but you're still only just a room away to say, "Hey, is everything good?'' So, I I see it also from from the older investor or for somebody who may be on a fixed income that doesn't think they can actually leave the town that they're in to move down to the beach. It gives them an opportunity to offset that income or have another spot to put that mother-in-law or whoever that may be that they feel safe, they feel comfortable because they're still in the same environment, but they're not getting the short end of the stick of, hey, you got to walk up 15 stairs to get to it or we're in 2,000 square feet, but here's 400 square feet for you, you know? Like it kind of puts you in a position of strength there where you can utilize it how you see fit. Um, and gives you that versatility with that.
And that's the really cool thing is the versatility. I mean, we've already named so many different ways that you could use this duplex. Um, you know, and then, I mean, there are, you know, long-term renters next door, short-term renters next door. Um, you know, if you wanted to, you know, really cash in on the season, short-term, rent it during the summertime and then find somebody that'll rent it for six months in the off season, you know, or something. Yeah, snowbirds, traveling nurses, military. You know, like I had a military guy in my duplex and he wanted a duplex because he didn't want heavy maintenance because he's gone all the time. He's deploying all the time and he wanted something that he knew was going to stay very concise, not a boatload of things he had to do. Um, but at the end of the day, that versatility takes the scariness out of it as an investor. Whether you're young, whether you're older, whether you're in the middle of the road, it gives you the ability to make sure that one way or the other, you're cash flowing. You know, you're not sitting dead in the water. Um, and if you had to go move into one side like you're doing, put a renter in the other side, and now you're offsetting your payment, like Tammy said, and increasing your buying power. So, if you don't think you can afford it, and let's say you've been pre-qualled by somebody and they said you can only afford $350. Well, you're screwing up first off because you didn't get pre-qual called by Tammy because she would have told you exactly how you needed to go about this. But at the end of the day, if you're getting $2,000 a month on the on the other side that you're not living in, well, they'll take 75% of that. So, $1,500 of that you can leverage to yourself to add to your buying power. So it takes it it gives you a whole different versatility, not just from the the the building itself, but from the financing aspect, too. It's it's totally different. And so it it really helps you kind of start out and go, okay, I'm going to start with two, then I'm going to have four, then I'm going to have six, then maybe I'm going to buy an apartment complex. And if you want, you 1031 that and keep rolling that equity. So there's so many ways you can make those things work um and and really make it work in your favor.
Well, and I think that's why they call it House Hacking because it it's kind of like a hack, right? It's a door that most people don't know exists, right? Um, to be able to live in one side and and rent the other and use that income. People don't it's not widely advertised, I think, so people aren't aware of it. Um, and uh I mean it's it is a really great option to start building that that portfolio. Um, one of the things that you mentioned, TJ, um, that I'd like to touch on was, you know, people that think that, you know, maybe they couldn't afford to move down to the beach. So, most of these R2 lots in Panama City Beach are really close to the beach. Absolutely. Um, which is really cool. Um, you know, and and I think a lot of people don't realize that they are zoned R2. That's right. Um, people buy these lots and they put up, you know, single family home not realizing the potential that that lot had.
Um, one of the other things that I want to talk about for those watching, um, is just how this duplex lives. So, um, you know, it having a next-door neighbor, um, you know, you have a shared wall and some of those kinds of things that might make people hesitate a little bit. Um, but the really cool thing is one, the way it's designed, and then two, the way we build it, it feels like a single family home. Um, so you have a neighbor next door, but you wouldn't know it unless you step outside and look over and see that you're connected to somebody else's house. Um, inside both sides are are identical. Um, it's a three-bedroom, two-bath layout. Um, open concept kitchen, living, dining. Um, the primary suite is towards the back of the house and the two guest bedrooms are at the front. And so you have that nice separation there if you have kids or things like that where, you know, you're it's it's a small enough space that you know you're there for your kids if they need you, but you're not in the room right next door with them crying or things like that, you know. Um, and then uh living next door um the way that this has to be built um with a firewall between it which kind of ties back into our insurance situation. Um, so you've got a three and a half inch wall um that is spray foam insul insulated. Um, and then you've got an inch of drywall, a one inch air gap, another inch of fire rated drywall um and then another three and a half inch wall with spray foam insulation. So by the time it's all said and done, you have almost a foot of multiple layers of drywall, multiple layers of insulation. And so living in that home right now, I mean, once in a while I'll hear my neighbors, but it's really, really muffled. Having lived in apartment complexes and condos before, um, it's it's nothing like that experience where you can almost hear the conversation happening next, you know, next door. The bang on the wall. Yeah, exactly. So, this is uh it it feels really private, which is really cool. Um, and then I mean, just having your own yard as opposed to living in an apartment complex is huge. Um, the yard is fenced in the back and so I mean we can go outside and and you have this private space to listen to music, have a drink, hang out. Um, and so that that's another really. And if you wanted to, you could put your own pool. Like if you wanted a pool in the back, each one could have their own pool as well. Definitely.
Um, and and one thing people forget about too, which a lot of people think that second home affordability isn't available. Well, true. I'm one of those people that if I'm going to go buy a second home, I want to leave my toothbrush there and it's in the exact same spot when I get there. Yeah. So, well, how do you do that if you're scared of the afford the affordability behind it? You build a duplex. So, you rent one side so you still have some cash flow coming in, but that other side, you don't have to rent it. That can be your second home. Well, your second home's still generating revenue without anybody touching your stuff. Yeah. You know what I mean? So, like that's where for me, you know, I look at different markets all the time and wanting to be able to or knowing that I still need to cash flow something to make it affordable for me and to also take out the scariness of it. I'm like looking for duplex lots because I want to be able to go to my side and it's exactly how it was when I left it. The other side has been generating me money the entire time. So, it offsets that scariness where you get a true second home even though it's an investment product because it's generating money. You're still covering your taxes, your insurance, and probably still cash flowing at the prices that y'all can build at that you're making money and you have a second home for free. Like it's paying for itself at the beach, at the beach, you know? So, it's like that that also is something that really needs to be a touch point on this is that if you if you want a second home, but you can't afford it because you don't want people in your stuff, but you need cash flow, you just hacked that. Yeah, absolutely. You know what I mean? So, I think that's also something that people need to think about who are wanting to have a second home but don't want to rent it but can't afford to not rent it. Well, this this fixes that problem because you can rent one side and keep the other.
Absolutely. That that's the coolest part is that there are so many different ways that you can utilize this product, the financing that's available to you to fit your circumstances. Yep. Um, in my personal situation, I didn't intend for this to happen, but it just worked out this way. Um, my renter next door is actually my sister and brother-in-law and their two little girls, my two nieces. Um, and so that's another aspect, you know, when you talk about home affordability. Well, now you've got, you know, you could go in with your family and you could each live in one unit, you know. And and I think that's something that's kind of becoming more common nowadays, too, that that we've seen in other countries for a lot of years is like multigenerational living or families living together that really hasn't occurred a whole lot in the US, but is maybe starting to to pick up a little bit in popularity. So now you just made housing affordability, you know, a a lot more affordable, I guess. Yeah, a lot more attractive. Yes. for uh for two parties of the same family to go in on something together, which is another cool way to utilize that. So, I mean, there's just so many possibilities. And you made it easier for parents to come visit. That's right. Yeah, absolutely. That's right.
And and just like you mentioned earlier, too, y'all built this in a way that if you wanted to take it from a two to a four and a four to a six, they could attach to each other and still live that way, right? Yeah, absolutely. So if if the land was big enough, you could stack them up side by side. Um, because there's no issue with egress windows or anything like that in bedrooms. So you could just slap them together and just keep that that going. 'Cuz a lot of people hear multi-family zoning and they think apartment complex or something huge and monstrous and, you know, maybe you inherited a piece like that or maybe you bought a piece of property and didn't know it was owned that way and it is zoned that way. Well, there's also that opportunity too to get with Trace Water and say, "Hey, like building a a 100 unit, 100 door apartment complex is extremely scary for me. What would eight of these look like?" And that is a game changer. And also, it's a game changer in in what you're going to have to deal with from a standpoint of keeping the property up. You don't have elevators you're having to build. You don't have a bunch of the ADA stuff you're having to deal with. You don't have to do the fire sprinklers. I mean, your build cost alone at what y'all do it from efficiency wise, you could really lay out eight, 10, 12 of these and really cash flow these things. Um, and if you wanted to, you could live in one, you know what I mean? Um, but but at the end of the day, too, like I think that that's something to to to that speaks volumes about the product as well is it can be bigger if you really wanted it. And let's say you own a multi, you know, a multi-family property and you want to start with one. Okay. Okay, well then live in that for a little bit. You feel good about it, let's talk about starting another one and then attaching another one to it. And you can kind of grow as your revenue grows, you know. Um, so I think once again, like y'all hit the nail on the head. I think you've brought something to the consumers around here that we've kind of forgot about. Just like you said, like you see hear duplex and you think of like, you know, a college town where you go in and the walls are beat to hell and back, you know. And and like I told you guys earlier, I've done a couple remodels and I'm not doing those anymore 'cuz I don't like what's I don't like not knowing what's in the walls. I like watching people put the stuff in the walls, you know what I mean? And so understanding that and understanding exactly where you're going to land from an investment side and from a money side helps in all facets including financing, you know.
Yeah, absolutely. And, you know, not uh having to dish out, you know, major CAPEX right from the get-go. You buy one of those older 1980s, you know, duplexes and yeah, it it might be a little bit cheaper, but probably not a lot. Not that much. By the time you now all of a sudden you have to put in new roof, new HVAC systems, new appliances, new everything, you know. Um, and so here you're getting everything brand new. And so you really kind of hedge yourself against, you know, maintenance cost for quite a while. Big surprises are taken care of. Exactly. So we're talking about, you know, overall cost of ownership now. Yeah. And, you know, that's something people people look at purchase price first and then they forget to look at what's it going to cost me long term. And so, you know, you take maintenance, insurance, all of those things that we've reduced and now you're probably on par or maybe better doing new than you would be buying existing. And quicker, too. I mean, it gives you a cleaner line of sight for insurance. So, you're not scouring around going, "Oh my god, well, the the AC is only five years old, but the roof's 30 years old, but the water heater is 12 years old". Gives you a clean line of sight. Gives you a clean line of sight financing wise. So, I think that it really takes the unknown and the scariness out of the investment side of it and out of the side of just building one to live in and rent out the other side or don't rent it and let your family come stay in it on occasion, you know. Um, so I think that there's so much cool stuff that you can do as an investor or a non-investor with this duplex opportunity. And I really, really encourage anybody who's watching this to reach out to us. And if you have any questions, we would love to answer all those questions and really help take the fear out of it because you've got a team here that we work with our heart. We care about the investment. We care about you guys as people. And I think that this team here, I know all of them very personally. And they do an exceptional job in every facet of their own business. So, if you're nervous, don't be nervous. We got you. Um, and and I look forward to speaking with all of you guys. Well, thank you, TJ. I couldn't have said anything better myself. Um, does anybody? I kind of took your role there, my bad. No, no, that was that was great. I loved it. Um, does anybody else have anything that they'd like to add before we wrap things up today? I think we got it.
Wonderful. All right. Well, TJ so eloquently closed us out there. So, if uh if you have any more information, please do reach out to us and we would love to discuss all of the uh the ways that we can help make this duplex a reality for you. Um, you can find us at tracewaterhomesfl.com. Um, we're also on social media. Um, reach out and uh if you have questions about the the House Hacking piece or how I put together my deal, um I'd be happy to speak to you personally as well. So, um, reach out to the team and and they can get you in touch with me and I I can walk you through that entire process. Um, and we'll get you into a duplex of your own. Thanks everybody for watching and we'll see you next time.