For the past 5 years, LGI Homes has been recognized by Builder Magazine as one of the top home builders in the United States.  Moving up 11 places from 2008, LGI Homes was recently ranked No. 57 on Builder Magazine’s 2009 Builder 100 List.  This list determined based on closings and is made up of both private and public builders.  LGI Homes continues to stand out year after year by providing quality homes at affordable prices to new homebuyers. 

LGI Homes features three, four and five bedroom floor plans with two bathrooms on over-sized lots. Every home comes with quality appliances, custom cabinets, a fenced backyard, front yard landscaping and a homeowner warranty.

In addition, all LGI Homes are built with thousands of dollars worth of upgrades already included at no extra cost to you in desirable locations that are perfect to fit the needs and desired lifestyle you dream for your family. 

Call or visit one of our beautiful LGI Homes communities today and see how you can own a new home for as little as $629* a month with no down payment required.

Canyon Crossing – San Antonio, TX | Deer Creek – S Fort Worth, TX | Chisholm Springs – N Fort Worth, TX | Creekside Village – N Houston, TX | Sunrise Meadow – S Houston, TX

By:  John Caulfield, Builder Magazine

Recessions have a way of separating winners from losers. And as the housing market inches closer to recovery, indications about which companies are likely to survive or fail become clearer.

Some companies are exploiting the economic downturn to strengthen their competitive positions. Others have used the recession to reinvent themselves. And a handful of new builders and suppliers have entered the market either to create new demand or to fill voids vacated by companies that have tripped or fallen. The following list of companies to watch this year includes builders and suppliers that are poised to take advantage of an economic upswing or, at the very least, stay ahead of the pack if the recession lingers.

LGI Homes, Conroe, Texas

ON THE MOVE. LGI Homes’ business model is to convert renters to first-time buyers with aggressive marketing and affordable products. The builder expects to close 600 homes in Texas this year.

Something unexpected happened at LGI Homes in 2009: Its revenue and closings went down for the first time in four years.

The company—which in 2008 was the only builder among the top 200 that reported sales and closings gains—closed 425 homes last year, versus 476 the year before. The problem wasn’t demand, according to president Eric Lipar. “It was just harder to get buyers approved for loans,” he says.

While closings were off, LGI Homes ended 2009 with its sixteenth consecutive profitable quarter. “We made $5 million [in 2009], our gross margins were up, and our costs per sales were down,” says Lipar.

LGI’s business model is to convert Texas renters into first-time buyers. It methodically sends out flyers to apartment dwellers within 30 miles of its subdivisions and keeps its sales offices open for nearly 12 hours each day, seven days a week.

This formula is working again at the company’s newest subdivision, which is also its fourth and is located in South Fort Worth, where LGI Homes picked up 210 completed lots on which Sovereign Bank had foreclosed. The bank not only helped finance that acquisition, but provided $3.5 million in construction loans. LGI Homes also raised $2 million from private equity sources, which Lipar says made that deal possible.

In mid-December, Lipar said LGI Homes had sold 15 homes in South Fort Worth and had 15 others under contract. He’s now projecting 600 total closings for 2010, when his company will have a full year of selling under its belt in that subdivision, and expects to add new neighborhoods in Houston and the Dallas-Fort Worth markets.  [Read the entire article.]

Source: BuilderOnline.com

 By: Diana Olick, CNBC Real Estate Reporter 

I didn’t know about it either. Yes, the US Department of Agriculture has a program, instituted back in the 1940s, to assist in rural development, that has become extremely popular during these days of crunching credit. These are USDA-backed loans, so approved lenders can offer no-money down. 

Check out its growth:

• FY 2006 $3.07 billion 31,131 guarantees
• FY 2007 $3.64 billion 35,322 guarantees
• FY 2008 $6.98 billion 63,933 guarantees
• FY 2009 $16.2 billion 133,043 guarantees

Yes, the housing development has to be in a city or municipality that has a population of 20 thousand or less. If that community is close enough to an urban area that it’s part of a metropolitan statistical area, then it doesn’t qualify. Still, this includes a lot of areas you might not expect.

Houston-based LGI Homes never sold with a USDA loan two years ago, now they say they’re doing 20-25 a month.

One LGI community that is eligible is less than an hour’s drive from downtown Houston.

LGI CEO Eric Lipar might as well be a USDA spokesman: “The USDA allows the customer to qualify for homeownership where a lot of other programs they wouldn’t qualify and wouldn’t be able to own a home. When the customer is able to take advantage of homeownership, that’s good for the builder and LGI.”

Builders are going gangbusters pushing these loans, because they’re great for first time home buyers, who are some of their best customers. KB Home had an ad on its Web site a while back touting the 0 percent down, but it’s gone now with no explanation from KB. I asked. The community is in St. Augustine, FL and is advertised as a “quick commute to Jacksonville.”

But of course the big question is risk. USDA loan delinquencies and foreclosures are lower than FHA, but they are rising like everything else.

Take a look:

  [Read this article]

Houston, Texas – It’s earnings season for the home building industry, and amid the sea of public builder financials currently being reported, results like this stand out in contrast: For the 15^th consecutive quarter, LGI Homes, one of the nation’s top 100 single family home builders has achieved profitability. 

“Posting financials in the black is a rare occurrence for home builders in the current environment,” said Eric Lipar, CEO of the Houston-based housing and land development company that is achieving gross margins near 30%.  “We approach this business in a way that’s very different from other builders. This year, on average, we are generating 135 incoming leads per week, per subdivision. We feel like our unique sales and marketing model has really allowed us to side- step the housing and economic downturn.”

The company is focused on offering quality homes at very affordable prices to the first-time buyer market. According to Lipar, operating under the LGI Homes way gives the company a foundation for success that’s not dependent on creative financing, government stimulus or other unsustainable support.

Here is how the LGI Homes way is Different:

• Direct to Consumer
  • 30,000 direct mail pieces direct to the consumer per week/per subdivision
  • TV ads weekly
  • No reliance on Realtors
• Spec inventory – immediate move-in
• Even-flow production
• 6 floor plans per community
• No options
• 6 – 8 highly trained sales reps in each location
• On-going weekly sales training
• Proprietary lead and marketing database

Active Communities: LGI Homes is currently offering homes in four communities, Canyon Crossing in San Antonio, TX, Sunrise Meadow in Rosenberg, TX, Creekside Village in Spring, TX, and Deer Creek in Fort Worth, TX.

Accolades

• Inc. 500 Magazine, recently listed LGI Development in their 2009 list of fastest growing private companies in the US, for the third year in a row.
• According to Builder Magazine, LGI Homes is the only builder among the top 200 that has reported closings and revenue growth in each of the past three years.

About LGI Homes: LGI Homes has not just been profitable, but it has grown steadily in recent years. In 2008 LGI Homes closed 475 homes, up from 435 in 2007 and 418 in 2006. For more information on LGI Homes go to: http://www.lgihomes.com/

Additional notable awards recently received by the LGI group of companies include:

• Inc. 500 magazine recently listed LGI Development in their 2009 list of fastest growing private companies in the US, for the third year in a row.
• Professional Builder Magazine also listed LGI Homes in their 2009 Builder 400 list which celebrates the top 400 Builders nationwide, 5 years in a row.

With communities located in Houston, Fort Worth, and San Antonio, you are sure to find the perfect home.  For more information on our communities and available homes, visit www.lgihomes.com today.

During the luncheon, BUILDER also recognized LGI Homes of Conroe, Texas, as the industry’s fastest-growing private company in 2008. Eric Lipar, LGI’s president, gave a rousing acceptance speech, in which he pointed out that company’s aggressive sales and marketing efforts are bearing fruit even in this difficult year: it has averaged 70 home sales per month, and just last weekend, the builder received 450 calls from interested prospects. During Mother’s Day, LGI Homes’ three sales offices in Houston and San Antonio were visited by more than 100 customers.

“We’re really a sales and marketing company that sells houses,” Lipar said. “We sell directly to the consumer [last year, only nine of its 475 closings were attributable to real estate agents], spend an hour with them, and pull their credit histories before they are shown a house.”

It also keeps the process moving by strategic use of specs. With more than 100 completed spec homes on the ground, LGI can “move [a buyer] in 30 days,” Lipar said.

As a result, the builder is continuing to buy land and market its offerings. Lipar said that his company just signed a contract for 700 lots in the Dallas-Fort Worth area, and over the last two weeks, it has sent out 11,000 direct-mail pieces to prospects, at a cost of only $3,000 for the mailing. “So far, we’ve gotten 127 calls—for a $3,000 investment,” he noted.

In the current market, such success stands out. As Dugas followed Lipar to the podium, the Pulte CEO paid what might have been the greatest business complement to the LGI Homes leader as he playfully asked Lipar: “Is your company for sale?”

[Read the entire article]

Mike Snider likes to say that LGI Homes, where he’s executive vice president of home building, does “everything the opposite of other builders.”

That contrariness has been paying ­dividends for the Conroe, Texas–based company, whose officers claim is the only production builder among the top 200 that increased its revenue and closings in each of the last three years.

LGI has a unique business model that favors spec building, targets local renters, and follows leads with a highly trained salesforce. The company expects to break records for dollars and unit sales again in 2009 and is raising capital to ­expand beyond its two subdivisions in Houston and one in San Antonio. “There’s no reason why, in the Texas market, we can’t go to five, eight, 10 communities, take the LGI way of selling there, and be phenomenally successful,” says Eric Lipar, the builder’s president.

That confidence, in the face of a housing recession, would be laughable if it weren’t for LGI’s track record in recent years. Lipar’s father founded LGI Homes in 1995 as a land developer specializing in acreage home sites located 45 to 60 miles outside of urban centers. It continues in that business today, but five years ago its owners decided to take that business ­model into entry-level housing. A year ­later, it hired Snider, a former project ­manager at Tadian Homes in Michigan, whose training has focused on environmental sciences and land-use planning. 

“We try to keep things simple,” says Snider, starting with the homes: LGI builds from six house plans per subdivision and doesn’t offer options, so it can build houses in 45 days that range from 900 to 2,500 square feet and sell from $95,000 to $160,000. LGI prefers specs because it wants buyers to see what they’d be moving into, surrounded by lots of parks and playground space.

Every four to six weeks, LGI spends $60,000 per subdivision to send out 38,000 direct mail pieces to apartment dwellers within a 30-mile radius of each of its communities. “Repetition is key,” says Snider, in getting prospects to see how owning a house can be less expensive than renting an apartment. And that strategy is working: LGI received, on average, 95 prospect calls per week in 2008.

Unlike other builders, which have reduced their sales staffs and office hours, LGI has five to seven sales reps per subdivision. Each of the sales offices is open from 8:30 a.m. to 8 p.m., seven days a week. Every salesperson goes through 30 days of corporate-culture indoctrination and 90 days of sales training before he or she speaks to a customer.

Through its affiliation with Interlinc Mortgage, LGI can place a loan officer at each subdivision to guide renters through the ownership process. LGI pre-qualifies all prospects before they ever see a house, and most customers buy with either an FHA or USDA rural development loan. Snider says LGI is closing its customers within 30 days of their purchase.

LGI Homes purposely bought enough land in its three subdivisions to build between 700 and 900 units in each, which means it has enough land to meet its construction and sales goals for the next two years. “We believe we have a story to sell, a story that needs to be told, and a story that will allow us to grow,” says Lipar. By raising $10 million from private equity sources, Lipar says his company is gearing up for what he anticipates will be “lots of opportunities” to pick up distressed property taken over by banks “for 20, 30, 50 cents on the dollar.” The builder will open two new communities this year, and neither Lipar nor Snider seems worried that the housing recession could linger for a couple more years. “Apartment rent and occupancy [rates] are on the rise,” says Snider. “So we believe the downturn is positive for our business.”

[Read this Article]

By:  Sarah Yaussi, Big Builder Magazine

For most new-home builders, the first quarter of 2008 was hardly anything to write home about.  But for one Texas-based builder, it was more than a noteworthy quarter.  “We broke every record in the company,” says Mike Snider, LGI Homes’ executive vice president.

The company closed on 144 homes for the quarter and set all-time records for quarterly revenues and profits.

The company, which targets the first-time buyer segment, spends roughly $50,000 per subdivision every month in marketing costs.  Most of that expense is linked to extensive direct mail campaigns.  Every eight to 12 weeks, renters in local apartment complexes receive mailers advertising the company’s new homes, which compete on a monthly payment basis with apartment rents.  The shotgun strategy generates a lot of traffic. 

While this approach arguably generates a lot of unqualified buyers, Snider says it makes sense because the company is essentially selling spec inventory.  Rather than exploring a model and then customizing with options and upgrades, LGI buyers tour the actual home they will buy – and it’s ready for move-in 30 days or less.

Anxious to grow, Snider says there are expansion plans on the horizon in Houston and San Antonio, and possibly Dallas and El Paso.

[Printable Version of Full Article]