Going With The Flow
Growth comes with the territory for South Carolina's Mungo Cos.
Stewart Mungo (left), president of land development; Steven Mungo, CEO, Mungo Cos., Irmo, S.C.
Credit: Brett Flashnick
Mungo Cos. of Irmo, S.C., has thought about expanding into Greenville and even of hopping south to Savannah or Augusta, Ga. But Steven Mungo, its CEO and co-owner (with brother Stewart), isn’t rushing anywhere. “At some point, enough is enough,” he asserts. “I don’t want to be D.R. Horton.” You’d never know that, though, by Mungo Cos.’ recent track record. Founded in 1954 by their father, Michael, this builder was relatively sleepy during its first half-century. But over the last five years, it’s grown along with South Carolina’s economy.
In 2003, the builder started a commercial division, Mungo Construction, which focuses on government-financed affordable housing. That division did 220 units in 2007 and expects to do 263 this year.
The builder expanded into Charleston, S.C., in 2005 with Harbor Homes, which has since branched out to Myrtle Beach, S.C., taking advantage of a common subcontractor base. Two years later, Mungo Cos. bought First American, a builder based in Apex, N.C., that was building about 50 homes per year in the $300,000 range but needed a financial partner to expand.
Stewart Mungo, who oversees the company’s land development division, suggests that Mungo Cos. is like other organizations that succeed by reinventing themselves. Harbor Homes, for example, gave the company “a fresh start,” says Steve, to avoid past mistakes and incorporate what was working. Harbor Homes operates under an overhead contribution model, so 90 percent of its direct expenses are production. Even as the Charleston market softened, Mungo says this division, which controls around 225 lots, is positioned for future growth. “We’re negotiating for another two years’ worth of lots.”
Diverse mix: Mungo Cos. offers customers a range of products, from government-financed affordable houses to semi-custom dwellings.
Credit: courtesy Mungo Cos.
Mungo Cos.’ custom home division, Sovereign Homes, which launched in 1989, built 13 homes in 2007, but hadn’t taken off as much as Steve had hoped. So last year, he installed a new division president, Allyson Way Hank, and shifted the division’s construction to semi-custom with standard models and options. “The demographics in Columbia, S.C., [where Sovereign builds] aren’t great for the high end; you can buy a custom home there for $300,000 because builders don’t know what they should be making. But we think Sovereign could be a 30-home-per-year division.”
The brothers readily attribute their victories to the health of the markets their company serves. But Mungo Cos. has done smart things, too, like cross-training employees to work in multiple divisions. Its next stage of reinvention could be green development. After running into wetlands issues, Mungo Cos. hired biologist Jim Lewis as its corporate environmentalist. The company is currently setting up a mitigation bank to eventually sell wetlands credits to the Department of Transportation.