{"id":276,"date":"2020-11-15T15:59:43","date_gmt":"2020-11-15T15:59:43","guid":{"rendered":"http:\/\/modularhomesearch.com\/?p=276"},"modified":"2020-11-15T15:59:43","modified_gmt":"2020-11-15T15:59:43","slug":"qa-with-dream-finders-homes-ceo-on-the-past-present-and-future-11","status":"publish","type":"post","link":"https:\/\/modularhomesearch.com\/index.php\/2020\/11\/15\/qa-with-dream-finders-homes-ceo-on-the-past-present-and-future-11\/","title":{"rendered":"Q+A WITH DREAM FINDERS HOMES’ CEO ON THE PAST, PRESENT, AND FUTURE"},"content":{"rendered":"
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Kagan McLeod<\/span><\/figcaption><\/figure>\n<\/div>\n

At the end of 2008, during the Great Recession, Patrick Zalupski saw an opportunity to launch a home building company in\u00a0Jacksonville, Florida<\/a>. Twelve years later and in the midst of the COVID-19 pandemic, Dream Finders Homes, which focuses on entry-level and first-time move-up buyers, is on track to do 3,000 closings in seven states and bring in just over $1 billion in revenue. We talked to him about how he got started and what his game plan is going forward.<\/p>\n

BUILDER: What inspired you to start the company?<\/b><\/p>\n

Zalupski:<\/b>\u00a0After graduating in 2003 with a degree in finance, I worked at FedEx corporate headquarters for 18 months. I was quick to realize that it wasn\u2019t going to provide the opportunity that I wanted. I ended up moving to Jacksonville and helping my mom, who is a Realtor. I learned how she priced homes and what buyers were looking for. Her husband was buying foreclosures and rehabbing homes, and gutting them. So I learned how to do all that, the tile and the drywall and the siding\u2014almost every aspect other than structural framing. It was a really good learning experience. I bought a foreclosure in 2005 and renovated it, and got into new construction the following year. I was working on a nine-unit condo project during the recession. My epiphany was that condos are the first to go and the last to come back, so I should have been doing single-family detached.<\/p>\n

Running up to the recession, you couldn\u2019t find a way into the market because the national builders were buying up 500 lots at a time. We saw an opportunity to finally get in and at attractive prices because the market had corrected significantly. We were buying homesites for $24,000 that had been selling for $80,000 two years before, so that was a real value proposition. We thought there were buyers that had been passed up by the rapid price appreciation\u2014that was our target market.<\/p>\n

BUILDER: How did you finance the start of the company?<\/b><\/p>\n

Zalupski:<\/b>\u00a0I took out a $200,000 loan in 2008 from the Clay County Housing Finance Authority, which has the mission of providing affordable housing. I had a partner, who was the general contractor for the company. We were able to build three homes after I convinced the developer to let us pay him for the homesites after we sold the homes. All buyers had to meet the affordable housing income thresholds, which provided some restrictions to maneuver. But the good news was the buyers at the lower end were about the only buyers in the market. We built under those restrictions until we were able to get a traditional bank facility in 2011. We went from 27 closings in 2009 to 261 closings in 2012, and I think my partner got stressed out about it. I bought out my partner\u2019s half of the company in 2013.<\/p>\n

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Courtesy Dream Finders Homes<\/span><\/figcaption><\/figure>\n<\/div>\n

BUILDER: How do you differentiate yourself from the rest of the market?<\/b><\/p>\n

Zalupski:<\/b>\u00a0We always try to give more bells and whistles than the competition for the same or less price. \u2018More features for less money\u2019 is still the slogan we use today. We were putting in granite countertops and stainless appliances, windows and insulation for greater energy efficiency, architectural roof shingles, and so forth, before most production builders were using them as standard features. It\u2019s finding that delicate balance of price and quality.<\/p>\n

During COVID, we\u2019re working on making it easier to buy a home online. We\u2019re rolling out a mobile app and a website with interactive floor plans. Prices of land are going up, so we\u2019re reinventing the price point to maintain affordability by offering nice wood-look vinyl floor and laminate options. This way buyers can get into the home and upgrade what they really want, but they\u2019re not forced to have a wood-plank tile or Silestone quartz countertop.<\/p>\n

BUILDER: You tout the ability to customize the structure of a home, which is unusual for entry-level production homes. How are you able to do that?<\/b><\/p>\n

Zalupski:<\/b>\u00a0When you start a company in the depths of a recession, you have to do whatever it takes to be successful. So if a buyer came and said, \u2018I found this online,\u2019 or \u2018I want to use this sink from Home Depot,\u2019 we were going to do it. It\u2019s just a core value of the company. We have a very small custom home division. But if someone comes into our production communities, they can literally get a price request for a custom feature from our purchasing team. We make them put up nonrefundable money, around $300, to make sure it\u2019s something they really want to do. About 5% of our customers do this. And once we\u2019ve done something the first time, it\u2019s easy to make it a standard option.<\/p>\n

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Courtesy Dream Finders Homes<\/span><\/figcaption><\/figure>\n<\/div>\n

BUILDER: How do you decide to enter other markets?<\/b><\/p>\n

Zalupski:<\/b>\u00a0It\u2019s all based on opportunity. We have relationships in those markets, and developers come to us. They know the company and the product, and give us favorable terms. That\u2019s how we started in\u00a0Savannah<\/a>, Georgia, our first market outside of Florida, in 2013. The developers are typically working with a lot of builders, so you don\u2019t have to commit to the whole project. The only risk is building a couple of homes. If it doesn\u2019t work out, you can sell them and make a few bucks or lose a few bucks, but your company isn\u2019t going under because of that. And the upside is that you\u2019re building in a community that has 3,000 homesites.<\/p>\n