For Rex Bost, as for most custom builders, the past few years have been a crash course in managing change. In the mid-2000s, Bost’s Raleigh, N.C.–based company was generating upward of $12 million in annual volume, most of it on new houses that averaged more than $2 million each. By 2010, its volume had dropped to less than $3 million. Its average new home now tips the scales at less than $1 million, and 60 percent of its volume is now in remodeling. But a lean business model—the company has only three employees, down from six before the recession—has allowed Bost to scale back relatively gracefully. And while coping with a difficult present, he has kept an eye on the future as well. In addition to Bost Homes, he runs FreeRain, a company that provides rainwater harvesting systems to residential, commercial, and institutional clients.
Bost installed a rainwater storage system on his own property in 1985, but his first for a client was a dozen years ago. “In 2000, the rates for getting a meter set for irrigation in this one municipality just skyrocketed,” he says. And after gaining the necessary expertise, “we started offering it as a green option on our custom homes.” While not every client values sustainability, those who do feel strongly about it. “They want to do it as green as they can,” he says, “and water harvesting is part of that.”
FreeRain systems direct rainwater from a surface source—typically building downspouts—to a subterranean tank, where it is stored for irrigation, running air conditioning chillers, flushing toilets, and other non-potable uses. “In commercial situations, that’s 90 percent” of all water used, Bost says. Even in residential settings, he adds, “very little of the water used is for drinking.” But without rainwater harvesting, “100 percent of it comes from municipal water supplies. With stormwater management regulations and impervious-soil restrictions, it just makes sense to collect the rainwater and use it.”
“In 2006, we started getting more and more requests from our clients’ friends and other builders,” says Bost, who began to view rainwater harvesting as a potential stand-alone business. After learning that state codes required rainwater to be treated as graywater—disinfected and dyed before use inside a building, even to flush toilets—Bost submitted a brief to the state building code council and got the code changed. “You still have to use a disinfectant device—anything from chlorine to an ultraviolet chamber—but you don’t have to dye the water,” Bost explains.
Since its launch as an independent business in 2007, FreeRain has installed some 40 systems for residential, commercial, and institutional clients. “We’re establishing ourselves in this region,” Bost says. “Little by little it’s gaining some momentum.” The recession has been a drag on business, as have relatively low municipal water rates in the area, “but statistics tell us we’re going to run short [of fresh water] and rates are going to skyrocket.” Bost has kept overhead low, using local engineering firms for system design and a landscape contractor (and FreeRain stockholder) for installation. As the market improves, “our plan is to bring in some investors and do a regional marketing campaign and then a national campaign … to get it in front of the architects and engineers who are specifying these things and give them a turnkey solution.”
In the meantime, FreeRain generates more than $250,000 in annual volume and a modest profit. Perhaps more important, it gives Bost and his employees another leg to stand on. While they remain devoted first to building and remodeling homes, he says, “it does increase our peace of mind a little bit. It’s about survival, and diversification is part of that.”
