Equity Funding Blog

Entrepreneur Spotlight – Brad Kittel

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This is the second post in an ongoing series we’re calling “Entrepreneur Spotlight” where we get the chance to speak with entrepreneurs and listen to their stories. Here we feature Brad Kittel of Tiny Texas Houses. You can check out their EquityNet profile here.

Thirty years ago, Brad Kittel was zigzagging across the nation in an old converted school bus to write the great American novel with virtually no money to his name. When his bus finally gave out on him on the west coast, he quickly found himself eating out of dumpsters and digging for whatever he could to sell or trade for repairs.

A few years later, Kittel ended up in Austin, Texas where he began an incredibly successful career in real estate and was eventually presented with an Entrepreneur of the Year award after several years in the industry. In 2006, he founded Tiny Texas Houses and began building homes that are less than 600 square feet with 99 percent salvaged material. With an ethos of “sustainability through salvage,” Tiny Texas Homes has become a leader in the tiny homes industry. We had the opportunity to speak with Brad not too long ago to discuss his interesting past and vision for the future of sustainability.

Where did your initial interest in salvage come from?

I’ve been digging in dumpsters since I was about seven years old. That was always a part of my life. I traveled a lot growing up. I moved something like 17 times before graduating high school. I was born in Germany – an Army brat – so that’s why I was always digging in dumpsters. When someone got shipped out, they could only take 2500 pounds with them so the rest always ended up in dumpsters. So, when they left, I was digging in those dumpsters, pulling out other kids toys and stuff like that.

I also got to see a lot of tiny spaces and what a compressed society looks like after centuries instead of just a couple hundred years like in America. I mean, there’s thousand-year-old houses all over Europe and I got to see firsthand what those societies were like.

I got lucky. My dad started off as a private in the army and worked his way through. I got to stand in the Eifel Tower when I was a child, drink out of St. Bernadette’s cathedral’s fountains, and walked Machu Picchu, so my experience base is different than that of most other people’s. I think I don’t fit into most of society for that reason. There are those people that just have to fit in, wear the right clothes, drive the right car, and act like everybody else. Then, there are the people that just really don’t care. I’m in that just don’t care category.

Tell us a little about that trip in your school bus and how you ended up in Texas.

Sure. I graduated college in 1981; I got in my bus and started driving all the way from Florida to Washington, kind of zigzagging my way through the states. I came out of the last set of mountains in Washington with $15 in my pocket and blew the motor out going down the mountain. Literally, rods went through the oil pan, and I had oil running down the side of the mountain. I got to a town at the bottom, picked up a newspaper and the first thing I saw was Boeing had laid off 15,000 people that day. That was the recession of 1981.

I eventually made it to Las Vegas, which had 23 percent unemployment by the time I got out there. I couldn’t get a job, and ended up eating food out of dumpsters and finding stuff I could sell to make a buck. It was an eye opener living on a nickel for about a month.

So, my bus was in bad shape. The exhaust manifolds on my bus were shot, two lifters needed to be replaced, I had expired tags, no insurance, the whole works. It sounded like I was running a machine gun in a tank as I drove down the road, but I managed to make it from Vegas to Oklahoma, ended up spending several years there to get back on my feet, and then I came here to Texas with $600 I’d saved up, my bus, and a motorcycle.

When I arrived, my intention was to try to write, but I figured I needed to raise at least a million dollars to publish my book. Back then with no internet, you had to go through publishers and with what I wanted to write, I knew it would never get off the shelf. I had 32 different jobs before finally going into business for myself. I started real estate, got a license and within 6 months I met a girl who ended up pregnant with my son and becoming my wife.

You were awarded Austin’s Entrepreneur of the Year award in the socially responsible category in 1994. What was the story behind that?

I ended up buying my first house from an older gentleman who ended up becoming one of the adopted grandparents of my son for $65k and by the end of the year, that house was worth less than $45k. That was the bust of 1986. That lasted until 1990, and at the bottom of that boom I started buying houses that were totally trashed for $13k owner finance. I would go in there and just work incessantly and pay guys to rip me off and teach me how to do it right by doing it wrong. So, I learned a lot of lessons.

I ended up building the area up and won numerous revitalization awards, building block awards, and then the Entrepreneur of the Year award in the socially responsible category in 1994 for rehabbing that area, chasing off the drug dealers and the like. I mean I was very vigilant about it. We had various ways to go about it, like supergluing coins and dropping them in the payphones to break down the communication between the guys that were selling drugs on the corners. In effect, it was so bad that I bought my building which was my office later on for my real estate business the weekend after a 17 year old was murdered by a 16 year old over who would control the corner to sell drugs for that day.

Eventually we managed to chase them all away and and over time the values of my houses went up dramatically. I had about 45 houses and owned more real estate than anybody but the University of Texas.

The houses that I fixed up and sold for $60k would now sell for $600k. I didn’t even know the word gentrification when I started. I was a poor boy and had no clue. I mean, since all these homes were owner financed, no bank would touch me because I didn’t have any credit or anything.

I managed to work my way up and after I won the entrepreneur of the year award I got financing from the bank. They were glad to loan me money. For the first time in my life I was able to borrow and so I managed to go several million in debt. I had no idea about cash flow yet and all those other things you had to learn.

You eventually left real estate and went on to found Discovery Architectural Antiques. What made you decide to leave?

The real estate business can eat up peoples’ lives and careers. It’s nights and weekends and you never get to see your family. So I looked and my son was almost 11 and I thought “I’m working 80-90 hours a week, I’ve made millions of dollars and I barely get to see my son. So, I quit. I changed. That’s when I started Discovery Architectural Antiques. That took up the next 12 years of my life with 80+ hour weeks once my son was 14 years old and did not want to hang around dad much anymore.

From there, you went on to found Texas Tiny Houses. What was the vision behind that?

I got into the business to show that we could build tiny houses that were habitable, not just novelty, and do it out of salvage. I kind of got on a roll like I do everything else, and building with at least 95 percent salvage became my standard. My goal is to show people what can be done with a concept I call Pure Salvage Building. That means that everything from the doors, floors, windows, lumber, porch posts, glass, door hardware, and even the siding has been saved and re-used to create houses that we hope will last for a century or more.

50 percent of the materials in landfills are building materials and half of that is salvageable, usable product. 20,000 houses are torn down in Detroit in one year. 14,000 in Cincinnati. There’s enough building material sitting on the ground to build the next generation of housing; all it takes to make it so is pure human energy, spirit, and the desire to build something that will last for several lifetimes. What I’m asking of the public is to see this as a resource bank that we don’t have to throw away. Now is the time to put it in all these new buildings.

I had a board today that was amazing. You can literally count 250 years across the edge of it and that’s just less than a foot of what must have been a 10-foot in diameter tree. It was part of the back of a church pew put together with square nails in 1890.

There’s always a concern for toxic materials in salvage, like lead paint and asbestos. How do you address that?

First of all – I don’t even bother messing with something if I know it has a substantial asbestos issue or something like that. You can identify asbestos in a home pretty easily and if it’s there, you really need to be careful. Carpet fiber, though, is almost identical in how it affects your lungs. I promote building with salvage but really I promote building non-toxic and the fastest way to go non-toxic is using salvage.

Mike Rowe, from Dirty Jobs and Somebody’s Gotta Do It, came out to Tiny Texas Houses last year. Could you tell us what that experience was like?

We had a lot of fun and I normally have kind of stopped doing a lot of stuff like that because they always want to make it look so novel, but of course, it’s more than that. But to me, he’s sort of a comedic interviewer. So we played. We had fun. I got to joke with him and there was that back and forth, you know? Also, at the same time, I was serious about all the stuff we did. He came in with a bandaged, sore ankle and complained briefly about pain. But after that he walked around and I kept asking, “Well, how’s your ankle doing?” and he would shoot back “Well if I feel anything again, I’ll let you know.” And it was like ‘no problem’ it was done. And, he didn’t make a big issue about it or talk about it much. But it was fun to show how these things I’m doing are working.

What’s your most satisfying moment in business?

Seeing that people are actually paying attention and seeing that the trend is growing and it’s starting to grow exponentially now we’ve gotten past the early stages of the 1 or 2 percent recognizing the possibility.

What was your biggest mistake in business?

Probably not learning to develop more relationships. I’ve always worked as a hermit, I’ll do it myself. That’s been one of my biggest drawbacks, so what I’m doing now is something – I’m no longer out to prove and control things, what I’m trying to do is to form the coalition of likeminded investors and people who want to morph this into what it needs to be.

What is something you wish you would have known when you were starting out?

I’m glad I didn’t know so much, because had I known it, as I got older I got more cautious and I would have never taken the risks. I would have never gone out and bought boarded up crack houses because no investor would touch them. I know too much now to do the things I did back then. Had I been an investor and advised somebody I would have told them “No way!” The odds are stacked against you. I had passion, enthusiasm, desire, and a goal. So, because I had that I took on odds nobody else would take on fearlessly because I was young. If I had known then what I learned later, I would have never done any of that.

I made a lot of things happen in my life and I made a lot of those things happen by sheer will and force and sometimes through my anger and fury. Yeah, if someone got in my way then they’d better look out because I was coming through, I was taking heads. And I got a lot done. I made things happen when no one else could. I didn’t believe in failure. There’s no such thing as “I can’t do it.”

What’s your best piece of advice for entrepreneurs just starting out?

Start relationships early. If you go into salvage, get to know the guys that have the trucks that can help you move materials, make connections with people who know where the old barns are, and go to the coffee shops and strike up conversations with some of the old timers there.

Make sure they get a piece of the action so there’s an incentive for them because they’re retired and few extra bucks can really brighten their day. And plus then they have new meaning in life. If you let them know that you want to go out and save the things that their generation spent their lives creating, then you’re going to have so much help because they’re going to see someone with the spark to save the past. So make new connections with the elders.

What’s your definition of success?

Cultivating meaningful relationships and connections with likeminded people. That’s my definition of success. It’s not the money you make, it’s your ability to be happy with yourself and know that you did the right thing and followed your truth. If you can find your truth and discover your passion then you’ll never live a day of work. You’ll have fun the whole time.

Editors Note: Are you interested in contributing to our Entrepreneur Spotlight Series? Shoot us an e-mail at info@equitynet.com ATTN: Entrepreneur Spotlight.

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