IT'S ANOTHER HOT, HUMID, summer day in Ft. Myers, Fla., yet First Home Builders' model home park is jammed with visitors. With this much traffic in what is decidedly the off-season in this Mecca of tourists and snowbirds, you have to wonder what the place looks like when the crowds begin arriving en masse in January.
There's only one “problem”: Only about one in every 100 folks who end up buying homes from what was Southwest Florida's largest privately held home building firm—Hovnanian Enterprises acquired the company in August—actually owns their own lot. Which begs the question, when you are an on-your-lot builder who expects to deliver 3,000 houses in 2005, how do you keep the pipeline full?
The answer, says sales manager Matt Embroski, is just about any way you can. “You just have to beat the bushes,” he says. “We buy almost everything we can possibly get our hands on.”
AN ART FORM At least that's what Embroski and the rest of the Cape Coral-based builder's hierarchy would like us to think. As it turns out, though, First Home Builders has a very scientific approach to acquiring lots. And the company is not about to share it with anyone else.
Hermann says “all the big builders”—KB Home, Beazer, and Ryland, just to name a few—have finally discovered Southwest Florida, an area roughly bordered by Sarasota to the north and Naples to the south.
“They're all trying to figure out what we do,” he says. “My land guy received five job offers the day the sale to Hovnanian was announced. They all told him they were going to be here. Fortunately for us, Hovnanian decided to buy us to get into this market. So I'm not talking; I'm trying to protect our back yard.”
Besides, to hear Hermann tell it, other builders probably aren't interested in a system in which First Home Builders acquires individual lots, obtains all the necessary approvals to develop them, and then sells them—lock, stock, and house—in an entirely turnkey operation that includes financing.
Never mind that the country's fastest-growing private builder for the past two years has 4,000 signed contracts in hand on any given day. Or that it carries an inventory of 2,700 lots, on average.
“This is an extremely complex operation,” says Hermann. “Keep in mind that this is largely swamp, so you've got to know what you are buying. It takes a lot of research. It's harder than you think; you can lose a lot of money real quick.”
Learn more about markets featured in this article: Cape Coral, FL.