Staking a Claim

RANI HONG WAS A HOMELESS 8-year-old girl in India when an American family named Clark adopted her in 1979. One year later, Rani's future husband, Trong Hong, arrived in the United States from Vietnam when he was 9 years old under virtually the same circumstances. It was fitting that they would later marry and then become partners in Tronie Corp., the Olympia, Wash.–based home building enterprise they started in 1997, which generates $6 million in annual sales from the 15 to 20 custom homes it builds.

“We came from living on the streets, having nothing. But we were determined to make it,” she says.

That same determination drives other minority and women builders who are staking their claims in this large and sometimes alien business culture. While there are few statistics tracking their numbers, these groups of owners aren't the anomalies they might have been a generation ago.

FIRST CHOICE: Allen Warren says that African-American home buyers in the Sacramento, Calif., area “almost automatically” seek out his company, New Faze Development, which has been in business 15 years and currently builds more than 100 homes annually.

One-third of the 2,100-plus members in the NAHB Women's Council are builders, estimates Carmel Naman, the council's assistant staff vice president. Julie Fielek, who owns Fielek Builders, near Ann Arbor, Mich., is serving as the first woman president of the Michigan HBAin that chapter's 52-year history.

Emil Martinez traces his builder roots to his Mexican-American father, who built homes in Durango, Colo. Educated as an architectural engineer, Martinez worked on the construction side for several builders, including Richmond American Homes, before he and his wife, Christine, used savings and a bank loan to start Tucson, Ariz.–based Ducati Homes in 2000. Five years later, Ducati Homes controls 400 lots and is on track to build 95 homes, which is about the annual production pace at which he'd like to keep his company.

SPEAK THE LANGUAGE: Trong Hong and his wife, Rani, came to America as adopted children from, respectively, Vietnam and India. Asian buyers seek out their eight-year-old company, Olympia, Wash.–based Tronie Corp., says Rani, because she and her husband are bilingual. Tronie specializes in move-up custom homes (such as the one at right) that, she says, are distinguished by their details.

Martinez, 38, doesn't see his ethnicity as an advantage or disadvantage for his business, which builds in diverse middle-class communities. But race and gender have been known to surface in builders' relationships with customers. Hong notes that buyers of Asian descent seek out Tronie Corp. because its owners are bilingual, “which is difficult to find in this market.” And Allen Warren, the 40-year-old black owner of Sacramento, Calif.–based New Faze Development, a 15-year-old company that builds more than 100 homes per year, observes that “the African-American community is apprehensive about how it is perceived and will come to us almost automatically.” Indeed, black customers constitute a sizable portion of black-owned builders' clientele. Courtney Gray, a builder of Jamaican descent, says he relocated to Atlanta from New York to start his business, Conyers, Ga.–based Gray Design, in 1995 because of Atlanta's plethora of affluent minorities. Black-owned Amenity Plus Homes in Houston sells entry-level and move-up homes and recently completed a project whose buyers were evenly divided among whites, blacks, and Hispanics. Yet 70 percent of Amenity's usual customers are black, says owner Jaromey Roberts II.

FOLLOWED THE BUYERS: Jamaican-born Courtney Gray, who has been in the United States since the mid-1980s, relocated to the Atlanta market to open Conyers, Ga.–based Gray Design in 1995, primarily to tap into the area's high concentration of well-to-do minority homeowners and buyers.

Women more readily acknowledge that gender plays some role in their home designs and interactions with buyers. “The first thing a guy looks at is where his toys fit, but what I look at is how workable the house is—the kitchen, the storage, whether the dishwasher is close to the sink,” says Roberta Colmer, who co-owns Calabasas, Calif.–based Colmer Construction with her husband, Wayne. Joanne Chappell-Theunissen attributes part of the success of Howling Hammer Builders—the Mount Pleasant, Mich.–based design/build firm she owns with her husband, Mike—to her taking the lead in dealing with clients: “Men don't like explaining things, but women are more sensitive to what the buyer is feeling, and more approachable.”

But sharing a buyer's skin color, language, or chromosome makeup is no guarantee of a sale, as Nicole Goolsby discovered when the female partner of a couple her Lake Norman, N.C.–based company, Rion Homes, was pitching declared that she was “uncomfortable” with a woman building her house. “And she was a professional,” says Goolsby.

Before launching Rion Homes in April 1999, Goolsby managed construction for a local developer. Quite a few of the 17 owners BUILDER contacted were in construction before going out on their own. George Williams, the 57-year-old black owner of Dallas-based Vivid Custom Builders, was a framer before he borrowed money to start his business in 1983. Joseph Shieh, the Chinese-American principal in Alexandria, Va.–based McShay Homes, toiled on the procurement side for U.S. Home and other builders. Gray says he has a degree in building and was a construction superintendent in the 1980s. And Liz Jackson, president of San Diego–based Jackson-Pendo Development, managed projects for other builders.

After her last employer, Pacific Bay Homes, folded, Jackson and her husband, Jim, whose background is in land development, started Jackson-Pendo in 2002. But she actually entered the industry through the side door of Kenneth Leventhal, the real estate consultant. Other builder-owners took more roundabout routes: Fielek was a 30-something gym teacher when she went back to school to learn drafting and design. Linda Lock was an X-ray technician supervisor before she switched careers and went to work for Brighton, Mich.–based Maplewood Building and Development, which in 2000 sold its construction business to Lock and her husband, Jerry, who at the time was an engineer with Ford.

Some builder-owners sprang from the financial arena. Roberts, whose father built houses in the 1940s and 1950s, was a mortgage banker who did rehab financing in Houston's inner city, “which got me interested in building.” After playing minor-league baseball for the New York Yankees, Warren joined Dean Witter Reynolds as a broker and recognized quickly that many investors had accumulated their wealth from real estate. Polly Lauser had been working for Merrill Lynch 18 years when her husband, Ron, a builder and Realtor, asked her to join his new company, Vancouver, Wash.–based Wedgewood Homes, in the mid-1990s. “I was making a lot of money at Merrill, but Ron's offer turned out to be an epiphany for me,” she recalls.

Lauser says one of her contributions to Wedgewood has been to “systematize” its operations. “Too many builders reinvent the wheel on every project when they don't have too.” Now, her husband handles “the muddy stuff” in the field while she concentrates on “the creative side,” like design and marketing. That division of labor seems common in husband-and-wife operations, with some exceptions such as Lock, who is Maplewood's licensed builder.

Diane DeSimone, who holds a Ph.D in international marketing, dreamed about building homes when she worked for Nortel, where she spent two decades. But her plan to build mid-priced housing for seniors fell on deaf ears with lenders because she had no construction or development experience. So she and her husband, John, put up $150,000 to launch Argyle, Texas–based Derecor Homes in 2000 and found another investor, Nancy Troth, for $150,000 more. Troth's son, Richard, a builder, came on board to teach the owners “how homes get built,” says DeSimone.

LEADERSHIP ROLE: Julie Fielek, who owns Fielek Builders, is the first woman president of the Michigan HBA in that group's 52-year history. Fielek's company, which now includes her daughter and son, Wendy and Matt, who each have their builder's license, has recently diversified into construction management and commercial projects.

Financing is critical to any new business, and perhaps more so for minority and women builders, who typically get their companies airborne with loans from financial institutions, family members, and friends. Gray, the Atlanta builder, refers to his banker, Larry Hunter, as a father figure for all the help Gray has received from him. Other builders, however, have less-than-fond memories of their lenders. “I had calluses on my knees from all the begging I did,” recalls Fielek, who started out by purchasing eight developed lots that a local bank had repossessed.

Goolsby funded her startup using zero-percent-interest credit cards. “I gave myself a $16,000 ‘loan' and kept moving it around to different cards for the first 18 months.” Warren convinced his mother to let him develop five acres his family owned and had planned to build a Little League field on in honor of Warren's father. Using an outside contractor, New Faze built 26 homes on that site, and Warren's colorful résumé attracted lots of initial publicity.

New Faze, which controls 2,000 lots, has grown to the point that it can focus on larger infill projects, such as Alchemy at R Street, a mixed-use development in Sacramento that will include eight detached homes priced in the upper $200,000 range, 13 lofts, and 800 square feet of retail space. In September, New Faze will begin construction on Antelope Place in North Highlands, a Sacramento suburb, with 112 condominiums and 27,000 square feet of retail. Warren now talks about diversifying into active adult, and even developing ranches in Hawaii.

Fielek's company recently expanded into construction management through a project in Detroit called Woodbridge Estates, with 47 single-family homes, two tenplexes, six fourplexes, and five duplexes. Howling Hammer shifted its construction to bigger houses after a local hospital's expansion brought in Hindu-Indian health-care employees with larger families. That decision is paying dividends in 2005, when the company's revenue is projected to increase to $4.5 million from $3 million in 2004. Colmer Construction recently completed two very different projects: one in Chatsworth, Calif., where all of the lots are at least 20,000 square feet and include horse paths, and another that squeezes 30 homes, ranging from 2,100 to 3,000 square feet and $800,000 to $1 million, onto a bluff overlooking Morro Bay, near San Simeon, Calif.

Developing market niches such as “green” building or on-your-lot construction has helped some of these builders set themselves apart. St. Cloud, Minn.–based Willenbring Construction allows buyers to reduce their purchase price by up to $7,000 through sweat equity, says Diane Willenbring, who started the company with her builder-husband, Duane, in 1977. On the opposite end of this spectrum one finds Austin, Texas–based Jauregui Architect Builder, which designs and constructs Mediterranean-style homes that sell for up to $5 million and attract affluent local professionals and foreign nationals from Asia and Latin America. “It's a cultural thing,” explains owner Luis Jauregui, who left Mexico in 1971 to earn an architecture degree from Texas A&M and started his company 10 years later. “Our customers prefer our international flavor.”

Shortly after DeSimone started her business, her company began following the Energy Star guidelines specified by the DOE, a move that's become an effective marketing tool. Derecor also distributes structural insulated panels, which DeSimone says her company used in the construction of an Energy Star house it showcased at a local Parade of Homes event.

Rion Homes came into its own after its local HBA chose the company to build its display house in 2000. Now, Rion gets one-fifth of its customers through referrals. “I'm getting more recognition from Realtors,” says Goolsby, who recently received an “intermediary” builder's license, which allows Rion to construct larger, pricier houses. But Goolsby isn't planning to increase her company's production capacity much. About half of these builders say they'd prefer to keep their operations as is, either to preserve family businesses that now include sons and daughters or to maintain their hands-on approach to design, building, and selling.

Other builders, though, have loftier aspirations. Jauregui intends to build in all four of Texas' largest cities eventually and will open a sales office in Dallas next year. Tronie and Fielek are pursuing more commercial work. Jackson's company, which controls 88 lots in San Diego county, recently got into higher-density projects and expects to triple its production to 60 homes in 2006 and to between 75 and 125 homes per year eventually.

Roberts wants to increase Amenity's production to between 100 and 120 homes per year, but he says minority owners don't get enough chances to participate in larger projects because developers think they are undercapitalized. To alter those perceptions and raise his company's profile, Roberts networks aggressively through trade associations. “You have to give people the opportunity to know you.”

TO LEARN MORE ABOUT THE COMPANIES MENTIONED IN THIS STORY, VISIT OUR WEB SITE AT WWW.BUILDERONLINE.COM, CLICK ON “THE MAGAZINE” TAB, AND THEN CLICK ON “BUILDER ARTICLE LINKS.”

Brief looks at prominent building companies owned by minorities and women.

Founded in 1995. Black-owned. Builds around 55 homes per year and targets mostly entry-level buyers (70 percent of whom are black) with homes that range from 1,500 to 4,500 square feet and $90,000 to $140,000. Revenue falls between $4.5 million and $4.8 million.

Founded in 1988. Woman-owned (co-owns with husband). Builds 25 to 75 homes per year that range from 1,600 to 3,000 square feet and $400,000 to $1.5 million. Recently completed a project that specifically targeted workforce buyers, such as police officers and fire and rescue workers, and had 600 sign-ups for 25 homes. Annual revenue ranges from $5 million to $10 million. Ten employees, including son and daughter.

Founded in 2000. Woman-owned (husband is silent partner). Started in rural markets such as Ponder, Texas, where it purchased a few lots and built 2,000-square-foot homes that sold for $135,000 to $145,000, then advanced to small development projects where the homes got larger and considerably more expensive ($225,000 to $260,000). Long-range plan to develop a 50-acre senior living community with 150 to 200 apartments and 75 to 100 zero-lot line homes.

Founded in 2000. Hispanic-owned (co-owns with wife). Specializes in semi-custom homes. The company built 84 homes in 2004, a year when it was named Small-Volume Builder of the Year by the Southern Arizona HBA. Homes range from 2,800 to 3,000 square feet and average $300,000. Customer base is diverse.

Founded in early 1980s. Woman-owned. Builds three to five custom homes per year but has diversified into condo and mixed-use projects as well as construction management. Recently completed its first commercial office building. Revenue this year will be around $3 million.

Founded in 1995. Black-owned. Sold 23 homes in 2004, ranging from 3,000 to 5,500 square feet and $350,000 to $650,000. Revenue is $8 million. Company is unusual in that it outsources virtually everything, including accounting and marketing. Owner expects to build 20 homes in 2005. Majority of customers are black.

Founded in 1978; husband and wife didn't go into business together until 1998. Woman-owned (co-owns with husband). Builds 10 to 12 homes per year, ranging from 2,500 to 3,500 square feet and $300,000 to $500,000. Sales this year to increase to $4.5 million from $3 million in 2004, thanks partly to referrals. Company emphasizes eco-friendly building practices.

Founded in 2002. Woman-owned (co-owns with husband). Nine employees, $18 million in annual sales. Homes range from 3,200 to 4,400 square feet and $800,000 to $1.5 million. Prior to forming company, co-owner Jim Jackson was a key player in the development of the 3,300-unit Villages of La Costa master planned community in Carlsbad, Calif. He and wife Liz have big expansion plans and are already broadening their mix to include smaller, less-expensive houses.

Founded in 1981. Hispanic-owned. Will build 10 to 12 homes this year, which will range from 7,000 to 15,000 square feet and $1.5 million to $5 million. Annual revenue is around $18 million. The company has 27 employees and attracts an international clientele. Owner wants to expand throughout Texas and has even ventured into Mississippi.

SUNNY DAYS: Roberta and Wayne Colmer's 17-year-old company, Colmer Construction, offers a wide range of home styles and prices. One recent example is a project in Morro Bay, Calif. (above left), where Colmer built 30 homes, ranging from 2,100 to 3,000 square feet and $800,000 to $1 million, on 5,000-square-foot lots located on a bluff.

Founded in 2000. Woman-owned. Builds four to seven projects a year, ranging in price from $298,000 to $600,000, and from 1,700 to 5,000 square feet. Revenue from $1.5 million to $2 million annually. Owner's son, Eric, joined company after graduating from Arizona State University with degree in architecture. Company eventually wants to get into land development but doesn't want to get too much bigger.

Founded in 1997. Asian-owned (other principal owner is white male). Builds around 100 homes a year in Washington metro area, from townhouses that start at 2,000 square feet and $260,000 to single-family homes at 4,000 square feet and $900,000. Company does $50 million in sales and has 24 employees. It currently owns 50 lots and controls 70 more.

Founded in 1990. Black-owned. Owner is a former minor league baseball player and stockbroker. Firm generates $20 million in revenue from 100-plus units it builds annually. Currently focusing on urban infill projects, but owner says he's looking at a resort project that would be on 4,000 acres. Owner on advisory board of Wells Fargo Bank, through which he provides mortgage financing for about half of his deliveries.

Founded in 1999. Woman-owned. Builds between five and eight homes per year, mostly on waterfront properties, ranging from 2,500 to 3,500 square feet and $350,000 to $500,000. Customer base is primarily first-time custom buyers and empty-nesters, and one-fifth of Rion's jobs come from referrals. Owner will become chair of the NAHB's Women's Council next year.

Founded in 1997. Asian-owned (wife and husband are co-owners). Does $6 million a year building 15 to 20 homes that range from 2,200 to 4,500 square feet and $300,000 to $600,000. Company owns land on which it will soon venture into multifamily construction for the first time. It also recently got into commercial when it did some tenant improvements in medical facilities.

Founded 1983. Black-owned. Builds six to 10 homes per year, ranging from 3,000 to 6,000 square feet and $400,000 to $600,000. Owner plays up the fact that his company qualifies as a Graduate Master Builder, an NAHB educational program he says helps weed out undercapitalized or questionable people getting into the building trade. Owner is president of HBA of Greater Dallas' Southeast division.

Founded in 1996. Woman-owned (co-owns with husband). Specializes in upscale ranch homes that range from 4,000 to 5,000 square feet and start at $700,000. Owner describes target customer as “recently retired, with money in their pockets and attuned to the quality of the structure.” Owners are on their jobsites every day.

Founded in 1977. Woman-owned (co-owns with husband). Does 10 single-family homes a year that average 2,000 square feet and $190,000. Generates about $2 million in sales annually. Allows customers to reduce home price through sweat equity. Most customers are through word of mouth or Parade of Homes exposure.