Simple but Effective. Gutters, which are rarely included on affordable homes in Fayetteville, N.C., are among the eight low-cost upgrades that Westan Homes offers as standard features to distinguish itself from larger builders. Photo Credit: Westan Homes

Westan Homes is the ultimate do-it-yourself start-up.

It has no full-time employees other than principals Greg West and Robert Stanley. Since starting their first home last December, they’ve been paying a construction supervisor on a house-by-house basis.

Westan Homes also prints all of its house plans and marketing materials internally. On evenings and weekends, West taught himself how to use Facebook to help get Westan’s message out to customers. “Check it out and ‘like’ us, if you like,” he told BUILDER.

In a market loaded with bigger builders, Westan is making inroads. It's success strategy? Build slightly smaller-than-average houses with high-impact, low-budget upgrades. Westan's other advantage against large public builders is that the founders are locals who know the market intimately and who are contributing to local charities.

Playing With the Big Boys
On its surface at least, Westan Homes seems to be a highly quixotic venture in a market where it competes with such established builders as D.R. Horton, H&H Homes (where West was president for three years), Caviness & Cates, McKee Homes, and Savvy Homes (which delivers houses priced at $70 per square foot).

Market conditions haven’t been ideal recently, either, as building permits in the Fayetteville SMA were down 72 percent in July compared with the same month a year earlier, according to the Federal Reserve Bank of Richmond.

Still, West and Stanley—both 47 years old, who met when they worked as sales reps for a local pharmaceutical firm—are confident about their business’s future. And they know this market like the back of their hands: West has been a realtor here since 1992, and Stanley ran his own construction companies during the last decade. West says the company is on track to close 20 houses in 2013, and expects to close 40 units next year.

“When we started, we asked ourselves ‘what is our niche going to be?’ ” West recalls. “The average market price was $205,000, so we decided to come in under that by building a slightly smaller house, but one that includes high-impact, low-cost upgrades that had either been stripped out by other builders [during the recession] or weren’t there in the first place.”

Thus emerged Bright Ideas, an online marketing campaign that promotes eight upgrades that Westan Homes offers as standard features. These include USB charging stations, pullout trashcans, upstairs laundry rooms, a built-in pest control system, keyless garage entry, gutters, hands-free pantry lights, and 2x6 exterior walls. Westan created short YouTube videos for each upgrade.

West says he got the idea for the basic upgrade strategy by looking through trade publications. And adding these features has had little impact on the overall selling price of the houses; for example, the keyless garage entry is only $25 and the hands-free pantry light $60. In a market where gutters are usually included only on higher-end homes, West saw this upgrade as helping homeowners prevent rainwater coming off of their roofs from drowning their lawns.

Other Strategies
Beyond Bright Ideas, West and Stanley are trying to elevate Westan Homes’s reputation with buyers as a company dedicated to community service. It is currently supporting three groups: The United Service Organizations of North Carolina; Communities in Schools, whose goal is to prevent dropouts; and Operation InAsMuch, which helps churches encourage their congregants to help their neediest neighbors.

“We look forward to writing bigger checks to these and other groups as we grow,” says West, who is active in the local Chamber of Commerce and Board of Education.

But expanding in a spec-driven market like Fayetteville will require Westan Homes to get more inventory on the ground. In August, the company only had 11 homes available, and West thinks it needs at least 20 at any given time. Now that the company has a sales track record, it’s been able to pry some construction financing from a few regional banks.

Westan Homes

Headquarters                 Fayetteville, N.C.

Founded                       January 2012

2012 Closings                zero

Markets Served              Cumberland and Harnett Counties, N.C.

Home prices                  $150,000s to $180,000s

Success Strategy           Low-cost high-impact upgrades, affordability

Learn more about markets featured in this article: Fayetteville, NC.