This month marks the first anniversary of Dallas-based Landon Homes, the home builder started by John Landon, the former co-CEO of Meritage Homes, which itself was formed in 1996 when Landon merged his nine-year-old company, Legacy Homes, with Monterey Homes. Landon resigned suddenly from Meritage in May 2007, walking away with a $13.3 million compensation package and more than $52 million from the sale of his Meritage stock back to the company.
After a two-year hiatus, Landon, now 51, returned to his “passion” for home building, and his company should complete 100 homes in 2009. The builder’s motto is “Better Built By Design,” and Landon sees its opportunity in affordable, energy-efficient homes. Landon Homes controls enough land (much of it undeveloped) to build 1,000 homes.
Q: What lured you back into home building?
A: I saw many similarities between now and 1987, when I started Legacy. Then, builders were going out of business, banks were failing, and the RTC [Resolution Trust Corp.] was going quite strong. How could anyone have imagined, rolling forward 20 years, things would be even more catastrophic?
Q: Your homes range from 1,700 to 4,600 square feet and are priced from the $160s to the mid $300s. What’s different about them?
A: The value equation now is using technology to make houses more efficient to operate. All of our exterior walls are built using 2x6 construction, which allows for 57 percent more insulation. All of the headers are insulated, too. We refer to our houses as “hybrids,” and tell customers they will immediately save $60 to $80 per month in energy bills. That’s exciting.
Q: What mistakes must startup builders avoid?
A: Don’t worry about how big you are, and be disciplined and focused on what you do best. Right-size the company, and keep it right-sized as you grow. And put yourself in a position to sell homes; many startups stay small because they aren’t very good at marketing themselves.