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Creating Solutions Together: Custom Builder Symposium + Design Institute
Nov. 6-8
Hilton Bayfront San Diego Hotel
San Diego
 The right design, the right building methods, the right technology. When they come together, they create the homes that dreams are made of — and the smart solutions that can give you the tools for business success and ideas that will exceed your clients' expectations.
NAHB’s Custom Builder Symposium and The Design Institute have brought you outstanding seminars that get right to the heart of issues important to designing and building great homes for your clients, as well as managing your business. This year NAHB has brought those two great educational experiences together to create an event that give you all of the solutions you need in one place — it’s like going to two conferences for the price and time commitment of one.
The event, Nov. 6-8 in San Diego, will bring you the outstanding education, networking and interactive events that are the hallmarks of the original Custom Builder Symposium, along with innovative design concepts from the Design Institute and technology trends that will help you build added value and distinction into your homes.
- Expand your range with hands-on idea generators like the design charrette and home tour highlighting good design and innovative products, including home technology
- Engage with other attendees — including suppliers — and share what’s working while developing contacts you can reach out to throughout the year
- Transform your business plans as a result of highly interactive knowledge sessions on the latest design trends, the best building practices and technology installation
Join small builders, remodelers, architects, designers and home technology experts for this up-to-the-minute industry education in a high-level, collaborative atmosphere.
For complete details and to register, visit www.nahb.org/Custom.
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21st Annual Custom Builder Symposium + Design Institute Call for Entries
Education program proposals are now being accepted for the 2009 Custom Builder Symposium + Design Institute. We invite you to participate in an opportunity to share your knowledge and be part of this premier educational event.
A committee of custom builders has developed course outlines based on topics that are relevant to the custom home building industry, and are seeking speakers to create programs that support the course objectives.
Only online proposals will be accepted. To submit a proposal click here to review the Proposal and Presentation Guidelines and course objectives.
The deadline for submitting a proposal is Friday, June 26.
For more information, call Marcia Childs at 800-368-5242 x8388 or e-mail mchilds@nahb.com.
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Undeterred by Downturn, Builder Finds Way to Give Back
The housing downturn was not going to deter Sam Bradley, CGR, GMB, CGP, of Sam Bradley Homes, from his mission. The Springfield, Mo. custom home builder and remodeler was determined to build this year’s St. Jude Dream Home Giveaway for his local association.
 The French Country-style home with 2,500 square feet of finished space that is nearing completion in the Lion’s Gate community south of Springfield is the third Dream Home that the Home Builders Association of Greater Springfield has built to help raise money for St. Jude Children’s Research Hospital in Memphis, Tenn.
Created in 1991, the St. Jude Dream Home Giveaway is the largest single, nationwide fundraiser for the hospital — known internationally for its work in finding cures and saving children with cancer and other catastrophic diseases.
“I have always believed in giving back to your community,” said Bradley, “and building the St. Jude Dream Home was a natural fit for me.”
“This December, my wife will celebrate her 40th year of remission from a cancer that, to our knowledge, only 23 people worldwide have survived. This project is very special to me and the opportunity came along at the perfect time,” he said.
The Greater Springfield HBA home is expected to be completed on May 1. The auction will be held on Sept. 15.
“Our whole association has endorsed this project,” said Bradley. “We have suppliers and different vendors participating. It’s their way of giving back to the community.”
Through the HBA’s charitable foundation, a subcommittee chooses a builder and plans and oversees the St. Jude project each year. The subcommittee then helps guide the builder through the budget and marketing of the home, as well as helping with fundraising.
Each participant — from the subcontractors to the land developer — volunteers time, services and materials for the project. Lions Gate Development donated the home site.
“When I was looking for donations and participants, I had to go beyond the scope of my normal subs to find other volunteers,” Bradley said, while noting that he was impressed with the generosity of the Springfield area building community, even in the face of the housing downturn and recession.
St. Jude was impressed as well.
“I have been amazed by the number of suppliers and trade contractors who have stepped up to the plate,” said Russ Laney of St. Jude. “When our builders agree to partner with us, we really don’t know how many vendors and suppliers are going to be able to donate.”
Because of the downturn, Bradley said many of the volunteers working on the Springfield home had to scale back from how they participated in the last two Dream Home giveaways. He said he made up for the shortfall by contacting additional people he had not worked with before, and they were more than willing to help with the project.
When Bradley needed an excavator, he contacted a new member of the HBA, someone he didn’t even know. The excavator said he would help with whatever was needed.
“It turned out that one of his family members had been treated at St. Jude. He said it was the right time for him to give back,” Bradley said.
“The funds we raise for these homes have a tremendous impact on our research,” said St. Jude’s Laney. ”Some of those people have distant or direct family members who have been treated at St. Jude, and in some way that’s their way of giving back.”
In October, Abby, who is the granddaughter of one of the volunteer suppliers and was treated for a brain tumor at St. Jude, was present for the groundbreaking on the homer. The volunteers nicknamed the home “Abby” in her honor.
The St. Jude Children’s Research Hospital Dream Home program is active in more than 40 markets across the country. Each home built for the program has a market value of between $300,000 and $700,000. Raffle tickets for the finished homes are $100.
Since the program began 18 years ago, St. Jude has raised more than $155 million with the help of HBAs and industry professionals through the Dream Home giveaway program.
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Spring Thaw in Home Buyers' Perspectives
The frozen housing market appears to be thawing as more buyers are finding the current historically low interest rates, stabilizing prices and tax credit refund incentives irresistible.
“Today’s market offers an incredible opportunity with the unprecedented combination of a 40-year low in interest rates, prices returning to normal levels in many markets, and limited-time tax incentives,” said NAHB Chairman Joe Robson.
The number of homes under contract increased in March, according to the National Association of Realtors’ Pending Home Sales Index, which increased 3.2% from February to March.
Optimism about the housing market is on the rise as well, an April 16 Gallup Poll found that 71 percent of Americans said that now is a “good time” to buy a house, an 18 point increase from one year ago and the highest level in four years.
Natasha Smith had been monitoring interest rates and home prices, but decided to take the plunge when the $8,000 first-time home buyer tax credit was enacted in February. The 25-year-old closed on a condominium in the Washington, D.C., suburb of Hyattsville, Md., in April.
“I wasn’t in a rush as I continued to watch prices fall, but when I heard about the $8,000 tax credit, I knew it was the perfect time to buy,” she said. “Combined with the low home prices and interest rates, the tax credit was the extra push I needed to get out of the family home and into a home of my own.”
For more information about the $8,000 first-time home buyer tax credit, which ends on Nov. 30, go to: www.federalhousingtaxcredit.com.
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Cash is King: How to Survive till Next Week
By Randy Noel
Cash is king. That maxim is easy to say when a builder has cash. What about when cash is low? Many only have income only when they have a house under construction. When cash is short, it’s important to be careful with the cash on hand. To keep the cash flowing, cash needs fall into the following:
- Builder’s salary: This, of course, is what the builder pays himself. Keep it as low as possible to sustain his household. This may seem selfish, but a builder must protect his personal assets to remain in business; as soon as they are lost he has no motivation to continue.
- Business staff’s salaries: By this time, only essential employees should be on staff and they should be doing as much work as possible. Without pay, they will leave as soon as possible. They must pay bills and cannot miss a payment.
- Business rent, phones, etc.: As soon as a builder closes his office or disconnects his phone, red flags go up in the building community and material and labor gets hard to find.
- Small sub-contractors paid weekly: Like your employees these contractors cannot afford to miss a week of payment, and they are the most vocal on the job site. They typically are lower priced than large subs.
- Small suppliers paid monthly: Local suppliers that have investments in inventory and offices and cannot wait for payment. They will cut a builder off quickly since they have little room for non-payments.
- Large sub-contractors paid monthly: These contractors are more likely to have reserves that will allow forbearance than smaller businesses. However they will not let you get passed the lien period. These are usually plumbers, HVAC, electricians, etc.
- Large suppliers paid monthly: These are usually national suppliers with reserves that may be able to stretch terms but not past lien periods.
- Property taxes: Property taxes on inventory. This takes time in most states to seize property for non-payment and allow redemption although builder will have to pay penalties and interest. It’s important to talk to legal council on this topic.
- Community Fees: These are fees like homeowner association fees. Like property taxes normally non-payment may be made up at the sale with penalties and interest, but seizing property is a long process.
- Maintenance on your inventory: Grass cutting, utility bills, cleaning, etc. In order to sell the inventory the builder needs to keep it in good appearance; but it falls lower on the list than expenses such as employees.
- Interest on inventory: Lenders collect monthly interest on loans and do not begin to workout forbearance until a builder is behind on interest payments. Most loans have equity positions at 80% on loans thus placing the lender in a favorable position in the inventory.
The order of paying out of a limited cash flow will vary between builders and at some point the builder simply puts out the largest fires that will consume him the quickest. Being on the back end of a failed company and looking back, the moral process is the above order particularly since banks are now getting billions from the government. The immediate goal is to appear normal for as long as possible. As soon as the community feels the builder is in trouble and the rumors begin, labor and suppliers begin to speed up collections or refuse to work or ship. Then the builder is finished.
Below are several other ways to limit and slow the cash flow out of the business.
First, seek extended terms with major suppliers. They may allow 45 day terms but rarely will go past your state’s lien period provision if it has one. Next, when signing personal guarantees, limit them to one year. This will require the supplier to annually seek the builder for renewal allowing the builder to keep on top the amount of personal guarantees in his market.
Always sign every delivery, purchase agreement, listing agreement, tax report, everything as the corporation by or as the corporation’s employee. This will keep the builder from being personally liable for anything. Next, stop handing out checks at the office and either deliver them to the job site or mail them. Once this policy is used, begin to place everyone on a week from invoice to payment schedule.
This allows more time to evaluate invoices and slows the flow of cash out the door. Never pay for incomplete work. Now is not the time to extend credit to sub-contractors. Negotiate prices before work begins. Understand the sub-contractors are hurting too and will try to make up for lack of work by raising their prices.
Never write checks without the money in the bank. Bounced checks are like a cancer to a homebuilder. Once they begin, the rumors begin if a homebuilder has the reputation for not being able to pay his bills, he will begin to lose credit with the lender and a death spiral begins. It is better to not issue the check for incomplete or substandard work, than release a check and have it bounce.
Finally, look at the list and prioritize it to whom gets paid first. When I did this for my father’s company, I always paid from the least able to withstand the financial crunch to the ones most likely to withstand the crunch. When you’re in survival mode, hard decisions need to be made. Run the business and continue to remember it is a business, everyone else still believes this.
Randy Noel, of Reve, Inc. in New Orleans is a builder and member of the Business Management and Information Technology Committee at NAHB.
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New Home Inventories Continue to Shrink in April
The number of newly built single-family homes on the market shrank to 297,000 units in April, thinning supplies to their lowest level since May 2001, according to government figures released today. The report noted that the pace of new-home sales held virtually even with the previous month, at a seasonally adjusted annual rate of 352,000 units.
“The fact that the new-homes inventory is now below the 300,000 mark shows that builders have made substantial progress in winnowing down their backlogs to a much more comfortable level,” said NAHB Chairman Joe Robson. April’s results mark two consecutive years of monthly declines in the number of unsold new homes.
“This continued reduction in the new-homes inventory helps bring supply in line with demand, which is an important step toward the market’s recovery. We can expect the pace of new home sales to bounce along the bottom a bit before picking back up towards the end of this quarter,” noted NAHB Chief Economist David Crowe.
Sales of newly built, single-family homes recorded a marginal 0.3% gain to 352,000 units in April from a downwardly revised pace in March. Meanwhile, the inventory of new homes for sale declined 4.2 percent to 297,000 units, which is a 10.1-month supply at the current sales pace.
Regionally, the pace of new home sales was mixed in April. No change was recorded in the Northeast or Midwest, while the South posted a nearly 2% increase and the West a 3.8% decline.
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Want to Know the Housing Starts Through 2017?
 Find out in HousingEconomics.com's Long-Term Forecast.
Subscribe and get downloadable Excel tables that feature the housing starts forecast, gross domestic product (GDP), demographics and more.
To learn more, visit www.housingeconomics.com.
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Save 15% at BuilderBooks During National Safety Month
BuilderBooks.com is offering 15% off all safety publications purchased online during the National Safety Council’s annual National Safety Month campaign in June and extending the offer through July.
The failure to properly train workers is one of the 15 most frequently cited Occupational Safety and Health Administration (OSHA) standards in residential construction and could cost a company up to $7,000 for a single violation.
OSHA requires employers to train their employees to recognize and avoid safety hazards on the job and to understand the applicable safety regulations.
To help meet this need, BuilderBooks offers numerous safety publications in both English and Spanish, including:
New Releases
Best Sellers
To Order
Visit www.BuilderBooks.com/Safety and enter the discount code SAFE15 on the checkout page to receive an additional 15% discount.* Offer expires on July 31.
Click here for more information.
*The 15% discount is available only on web orders. It is not good on prior purchases and cannot be combined with any other offer.
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HTA Builder Business Guide Released
 The Custom Home Builders Committee and CEDIA, are pleased to announce the publication of the Home Technology Alliance’s builder business guide Home Technology for Home Builders: A Builder’s ABCs to Profits. This resources offers brief, timely articles explaining the benefits of home technology and ways builders can use it to improve their business development.
The guide is available in PDF format at: http://www.nahb.org/fileUpload_details.aspx?contentTypeID=3&contentID=71206&subContentID=216958. It is also available through NAHB’s Member Materials Ordering Site.
We encourage you to send this information to your members and order copies for your HBAs. If you have any questions about the publication or the HTA, contact Agustín Cruz, Executive Director, Business Management, at acruz@nahb.org or (800) 368-5242, x8472.
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