Scott Felder Homes (SFH) has been a well-established builder in the Austin and San Antonio markets for years; it delivered about 220 homes in 2015. But when Dallas-based BR Homebuilding Group purchased the company in September 2014, it wasn’t long before SFH began plans for expansion.
Bobby Ray, owner of BR Homebuilding Group, says his company bought SFH with the intent of launching a start-up in Dallas immediately. “We knew enough people that we would do a start-up here," he says. “That was always the plan.”
The month after the acquisition, Blake Friesenhahn was hired as Dallas-Ft. Worth division president for SFH and Larry Delzell came aboard as the division’s vice president of land acquisition. Since then, their focus has been finding dirt.
“If you’re going into new development in Dallas,” Friesenhahn says, “those are usually contracted about a year before the lots are actually developed. So we had a very difficult time, which we anticipated, finding developed lots to which we could build on right away.”
So SFH’s objective shifted to master-planned communities. It currently has land at nine different sites in the Dallas market and more than 600 lots under contract. There are other positions in the works, Friesenhahn says, that would put the company over 700 lots later this year.
In 2015, SFH didn’t close any homes in the Dallas market but did construct a model home to showcase their products coming on line in the future. From February through April, Friesenhahn expects to start building models at five sites in Frisco and Prosper, Texas. The company is keying in on people looking to buy a move-up home with sales prices around $500,000. Friesenhahn says the land SFH has acquired in the market are all in prime locations. “We’re not taking any positions in what we consider a C market,” he says.
“If you look at the positions we’ve got,” Friesenhahn adds, “all but just a couple of them are master-planned communities and have very good builder groups in them. We feel very fortunate that the developers are willing to work with us.”
One of its positions that’s far from a C market is the master-planned, $2 billion Legacy West development in Plano, Texas. SFH will build 127 single-family homes ranging from 1,900 to 3,600 square feet. The homes will be predominately two stories, but there will be some three-story options, Friesenhahn says. Home construction will begin in August or September, he adds.
“It’s very unique,” says Ray of Legacy West. “It’s one that a lot of builders wanted, and still do.” There are roughly 150 names on a waiting list, he adds, and the company has yet to do any marketing for it.
Friesenhahn says that the Scott Felder brand was well known in Dallas before its expansion there, especially among real estate and financial institutions. The challenge, he adds, “will be on the operations side in terms of getting all the trades and suppliers.” He will be hiring about 25 people over the next year to help smooth the process, but labor shortages are a problem SFH and every builder in the market is dealing with, he says.
The goal is to deliver 400 homes in Dallas in 2020, Friesenhahn notes. He expects SFH will close on between 30 and 50 homes in the market this year and then move up to 100 homes a year.
For SFH, things are about to get much busier in Dallas. “We spent the first year lining up our land positions,” Ray says. “Now the fun’s over and now we have to go to work. We have a lot of models to build and people to get hired.”