How Tony Johnson Uses AI to Scale Construction and Commercial Real Estate

Tony Johnson (00:00)
We see a lot of opportunity to simplify things. As of the moment, I don’t see it ⁓ taking jobs. What I do is see it making people way more efficient and being able to do way more on a daily basis. And it keeps everyone, it eliminates a lot of roadblocks and slowing down and facilitates.

a lot of mundane tasks.

Scott Bursey (02:04)
Welcome back to the Real Estate Pros podcast. I’m your host, Scott Bursey. And on today’s show, we’re focusing on scaling a successful house buying operation. We’re joined by Tony Johnson of Timeless Construction, an exceptional operator who brings deep expertise from years of successfully implementing and growing high volume lead acquisition channels across various investment markets. Tony, thanks for joining us today.

Tony Johnson (02:30)
Thanks for having me.

Scott Bursey (02:32)
it is a pleasure. It is a sincere pleasure. And for those of our listeners who may not be familiar with your journey, please tell us, how did your career begin and what’s your main focus now?

Tony Johnson (02:43)
Sure, my career began in 2007, 2006, 2007, selling building materials that started my construction journey at 84 lumber, where I went in and went through a nice training program there, got into building material sales to the run up to the great crash. And so during that timeline, learned everything construction estimating all

products and materials that went in homes and commercial buildings sold every aspect of ⁓ materials involving in construction ⁓ and became very good at estimating ⁓ for other general contractors built relationships with subcontractors which eventually led me into getting a general contractor’s license and pursuing a construction career for myself.

Scott Bursey (03:40)
How long have you been in the construction trade now?

Tony Johnson (03:45)
So my company was formed in 2007, licensed in 2008. so I did the construction company in tandem with selling building materials for about 10 years and broke away in late 16, early 17 and went solo on the construction company. So I’m about 18 years in to my company’s journey.

Scott Bursey (04:12)
Seasoned veteran we can safely say awesome If someone’s listening to this and they’re thinking hey, this is someone I like to partner with or learn from What do you want them to know first about your business Tony?

Tony Johnson (04:16)
Yes,

My business, what I would want them to know, for, I mean, for the construction side, we don’t really, not looking for any partnering now. On my investment side, we would look potentially to partner. have a fund and we partner with accredited investors on that side for our development. And what I would want them to know is we are focused. We own and operate those properties.

and they’re focused on retail and flex industrial only and it’s all multi-tenant buildings and we utilize our experience and our construction company within that so we’re vertically integrated from ⁓ finding and acquiring the property all the way through to lease up and then property management with my internal construction team.

Scott Bursey (06:08)
wow, nice, very, very nice. No business is perfect, Tony. What’s one thing that you’re still figuring out or that you feel that the organization could perhaps improve on?

Tony Johnson (06:21)
or it’s people, people, people, right? So figuring out how to best utilize my people and ⁓ how to properly always select the right people. ⁓ And that is not only do they need to have the right experience and the right drive, but the correct culture to fit into our team culture. ⁓ you know, navigating and understanding.

all of the different metrics that you need to hit in that interview process before you bring someone on because once you bring someone on and onboard them and get them in a 30, 60, 90 day run up, you have invested significant time and energy. So when that doesn’t work out, it is a major setback and hurdle. And so when you’re growing and scaling ⁓ properly, understanding how to

Select those right people, onboard them properly, give them the proper support, set the proper expectations, and then hold them accountable to it is critically important for growth.

Scott Bursey (07:30)
absolutely, and what strategy do you implement to attract the top talent and retain the top talent?

Tony Johnson (07:38)
So, you to attract it ⁓ We go out ⁓ and we try and brand and market ⁓ our company properly and We also utilize headhunters and are very specific Not only with headhunters even on our website on the attributes that we’re looking for from someone on top of that We utilize a thing called culture index and so we survey

people based on their innate traits that are basically locked in by the time you turn 12 and then never change. So we survey and have specific traits that we’re looking for for each role. And so that is one of our first hurdles to see if someone is a match. On top of that, they need to have significant understanding and background in construction ⁓ to be able to step in.

We’re not, we do a little bit of internship, but we are more dialed in for growth right now. And for growth, we need people that have experience that we can utilize, but not too much experience where they cannot be properly molded to fit into our systems.

Scott Bursey (08:53)
well explained and how big is your team?

Tony Johnson (08:58)
We have 36 people currently on the team.

Scott Bursey (09:03)
And what do you feel is the biggest opportunity right now? This could be like a market shift, Tony, or a new offering, or just a part of your business that you’d like to double down on.

Tony Johnson (09:12)
Right, so obviously opportunities are local. So local, are in Eastern North Carolina, in Wilmington, North Carolina on the coast. we are in one of the top growing markets. Our specific county, New Hanover County, Brunswick County below us, Pender County above us, Brunswick County is one of the top growing per capita in the nation. ⁓ New Hanover and Pender are top in the state. So.

We’re seeing massive growth and when I’m seeing massive residential growth, ⁓ residential housing, multifamily, all of those coming in, what we’re seeing is the biggest opportunity is a lack of neighborhood retail, ⁓ a lack of the flex industrial opportunity to facilitate that growth where we have the trades and smaller partners that need spaces to occupy and then facilitate that construction and that growth.

on the commercial side to provide services to all the new influx of people coming into our area.

Scott Bursey (10:17)
And what specific markets are you tackling Tony?

Tony Johnson (10:55)
As far as we tackle anything, retail, ⁓ multi-family, industrial, office, hospitality, and we do some sports and entertainment. ⁓ So our niche, we are a Butler Builder, pre-engineered metal building dealer, so we love pre-engineered metal buildings. And our niche of client is someone who’s looking for a design build, partnering with us.

We take them through the entire design process, get them through all of the planning and approval process, and get them through to construction in a GMP format. So we finalize a maximum price for them as we go through the iterations, and then build on a lump sum fixed contract for them so they’re not at risk in going in overages.

Scott Bursey (11:47)
Are you focusing on North Carolina specifically?

Tony Johnson (11:51)
We’re licensed in North Carolina and South Carolina currently. We focus on the eastern half of both of those states. And we do a lot of national franchise work. we are looking to expand into other states based on those franchise partners’ needs.

Scott Bursey (12:09)
Awesome, pleased to hear that. Any challenges you’re watching closely, this could be like market risk, competition, access to deals or capital, you know that sort of thing Tony?

Tony Johnson (12:20)
I think capital has loosened up a little bit and it was going in the right direction prior to this conflict. So what we’re watching is international conflict where that’s pushed up interest rates and constrained the market a bit, pushed up oil prices, which then streamed down to material pricing all across the board. the country obviously is heavily dependent upon oil. So when oil spikes up, it’s a major indicator that all material prices

are gonna start to go through, either get ⁓ fuel costs ⁓ added, you get a surcharge added that streams down eventually, or you get material escalation in price for shipping costs, getting materials here. ⁓ So we’re always watching these events, even in construction, right? Cause it’s all material. So anything, even though we’re not doing international work, everything’s coming in. So we have tariffs to deal with.

⁓ availability of materials and then shipping costs to getting everything here. So all affects us so we have to be cognizant of that and monitoring that ⁓ when we’re doing lump sum contracts on projects. If that happens, ⁓ we’re really out ⁓ and exposed on a liability standpoint and could go into a job making big profits up front and then all of sudden escalation occurs and ⁓ we might go upside down.

depending on how our contracts are structured, if we have an escalation clause built in, which we used to, ⁓ but haven’t done some in the past year when it’s been more stable.

Scott Bursey (13:56)
broken down very nicely. And this has been on my mind since we booked you. From an operational standpoint, if you were restricted to monitoring just one key metric weekly to gauge the health of your overall acquisition pipeline, what metric provides the most immediate visibility in your mind?

Tony Johnson (14:16)
⁓ So our top metric is, know, profitability per head that we have here on staff. ⁓ And when I’m looking at real estate, it’s, you know, a profitability standpoint from development on stabilization and what that metric is to ensure I can properly at minimum double my investors’ investment and the timeline in order to do that to provide them a doubling of their investment.

Scott Bursey (14:47)
exactly how long have you been in the commercial sector now, Tony?

Tony Johnson (14:52)
the entirety of my career. everything I’ve done, I did a little bit of residential ⁓ throughout the company’s evolving. We did a mixture of residential and commercial. I like with any company as you’re trying to scale grow, you niche down and you focus on what you’re best at, what you’re most successful at. ⁓ And so when we dialed that in, we were definitely most successful at commercial. So we

Scott Bursey (14:54)
Okay.

Tony Johnson (15:21)
dissolved the residential side of our company and only focused on commercial, then we’ve further niched down within the commercial ⁓ to more of a design build focus and a focus on retail, restaurants, ⁓ and pre-engineered metal buildings from Butler. Those are our main focuses.

Scott Bursey (16:23)
Okay, and we touched on this ⁓ a little bit before the show. Where do you see AI coming into play as far as your company is concerned?

Tony Johnson (16:33)
So we are heavily focused on AI adoption utilization within construction. So we see a major opportunity there and ⁓ to be a leader ⁓ in the adoption and implementation of AI within construction. believe that ⁓ construction, most of the very large construction companies are very old school. They utilize Excel and old programs and have not.

adopted some of the newer technology. Our utilization of AI allows us to be a lot more agile and we’ve adjusted quickly. I’ve been utilizing AI ⁓ since the first iteration of Chats GBT came out. Strictly now, the majority of our work is done within Claude. Right now we’re utilizing cowork code. They have new iterations constantly coming out. It has streamlined ⁓ and ⁓

brought together all of our different facets and basically allowed us to interchange work orders, contract agreements, everything where it integrates with each other and bringing all of these different pieces together all in one centralized location and then utilizing different aspects of AI and creating different skills.

where it understands the different softwares and how to create proper workflows between softwares and then put automations in place so we’re all following the same streamlined area.

Scott Bursey (18:11)
It sounds like you’re excited about the AI implementation and the vision of AI as it relates to your company.

Tony Johnson (18:20)
We see a lot of opportunity to simplify things. As of the moment, I don’t see it ⁓ taking jobs. What I do is see it making people way more efficient and being able to do way more on a daily basis. And it keeps everyone, it eliminates a lot of roadblocks and slowing down and facilitates.

a lot of mundane tasks.

For instance, I’ve created within CLAWD an executive assistant which currently manages all my emails, puts it into folders, ⁓ replies for me to short, easy emails autonomously, but just manages them, creates to-dos for me, creates action items for me, gives me…

updates of what I have coming up daily, what I’ve completed, where I have conflicts ⁓ arising in scheduling. All of that ⁓ is a very simplistic explanation and a simplistic piece that we have. And then we have way more complex pieces that we have utilized. And so we’re seeing a lot of opportunity and, ⁓ you know, I still think that we’re just on the cusp of what this thing

can do and then we look at where robotics can go. ⁓ I don’t even know that we can fully comprehend at this moment what all ⁓ is it going to be available to us in six months and you definitely can’t see a year out from now because it’s moving so rapidly.

Scott Bursey (20:03)
It’s a night and day difference from when you started your career, isn’t it?

Tony Johnson (20:08)
It is everything, everything is changed. And so, you know, I’m very thankful I got on board with it earlier. I’m in peer to peer groups and different groups. you know, collaborating with other business owners, other investors for underwriting deals, instead of doing, for instance, when we’re looking at an investment side, you used to have to go through these extremely complex spreadsheets.

You can put this data in AI or even have AI assist you in ⁓ Excel on the spreadsheets and help you simplify your underwriting and proformas. It’s astounding.

Scott Bursey (20:51)
It really is. Yes. And I’m glad that you’re taking it to the level that you are and integrating it like you are. Tony, we love fostering connections here at Real Estate Pros. For the listeners who want to follow your journey or collaborate with you, what’s the best way for them to reach out?

Tony Johnson (21:09)
They can just reach me on ⁓ it’s Anthony Johnson at LinkedIn. So we’re on LinkedIn. Anything timeless construction, we’re at timelessco.com. And you can reach out in there and connect with me. And we have timeless capital investments, which is timelessci.com. If anybody wants to look at investment opportunities, we again work with accredited investors.

Scott Bursey (21:36)
Tony, thank you so much for joining us today.

Tony Johnson (21:39)
Thanks so much for having me.

Scott Bursey (21:41)
And for our listeners, we appreciate each and every one of you. If you got value from today’s episode, please subscribe. We have more conversations coming up with exceptional operators, just like Tony. Until next time, keep your standards high and your vision clear. We’ll see you in the next episode, everyone.