Five years ago, two Brigham Young University graduates with construction management degrees, Jon Hastings and Russ Van Wagenen, were having no luck finding jobs in commercial construction. That got them thinking that, maybe, residential remodeling and home building offered more promise.
They didn’t need a lot of money at the beginning because they were taking on remodeling projects for which they were doing most of the work. The partners also didn’t pay themselves in the first year. “We lived off of our wives’ income, our sugar mommas,” laughs the 29-year-old Van Wagenen.
They subsequently raised more capital through “creative financing” with local developers as well as investments from friends and family, says Hastings, 28.
What looked at first like a fling has turned into a going concern. Last year, Tresidio Homes started 39 houses and closed 33, generating $8.5 million in revenue. It is currently active in five communities around Boise, and expects to start 50 homes this year.
For a market its size, Boise has no shortage of builders. What separates Tresidio from the pack, says Hastings, is the decision it made early on to do its design work in-house. Hastings designs all of the houses Tresidio builds and handles sales and marketing; Van Wagenen handles the financial and purchasing sides. This five-person company also has a project manager, field engineer, and drafting specialist.
“Most of the builders here send out their designs to drafting firms. Doing our own design work gives us the maximum flexibility to customize,” says Hastings. Van Wagenen adds that once customers see the designs, “they’re hooked—they either build with us or not at all, and our close percentage is pretty high.”
Tresidio’s homes range from 1,500 to 4,000 square feet, and are priced from $200,000 to $450,000. Tresidio currently offers a 40-year warranty on its structural work.
What has surprised Van Wagenen is the extent to which providing customers with a “good experience” translates into referrals and future business. “I didn’t expect that.”
Word of mouth is critical to any builder’s success here. In Boise, builders form teams to buy lots from developers that turn over the marketing of their subdivisions exclusively to real estate brokers. Consequently, Tresidio Homes doesn’t have a sales and marketing department, although Hastings says he’s won't leave marketing up to Realtors alone, and has developed promotional campaigns on his own.
Tresidio Homes is now profitable. The partners declined to discuss on the record what their long-range plans are for the company, except to say they would be “comfortable” keeping its production to around 50 houses per year. All Van Wagener would add when asked if Tresidio Homes is being prepped for eventual sale to another builder, is “it depends on what day you ask us.”
John Caulfield is senior editor for Builder magazine.
Learn more about markets featured in this article: Boise City, ID.