The Truth About America’s Housing Shortage | Doug French, Stylecraft Builders CEO

love it that's a great question we're involved with a peer group called builder20 it's through the national association of home builders there's 20 builders and i promise i'm going to land the plane that there's a point for me telling this story there's 20 builders that come together you know twice a year and one of those meetings is about financials and i can distinctly remember going to those meetings and it's kind of like they line you up not based on revenue they somewhat do but really the markers net margin and i can remember going to those those meetings and being kind of like oh my gosh like and like almost like a wake-up call like yeah we're growing our top line but our bottom line is either shrinking or staying the same And Brandon, what I realized really quickly is like every year we always ran out of houses.

There was always a period of the year, may have been April or May or whatever, the spring sowing season where if you walked in and you wanted a home and for us, we're kind of more cyclical on the school calendar.

You know, we're living in a college town.

And so it's really kind of August to August.

And every year somebody says, hey, I got to move in by August.

What do you have? We're like, sorry, like come back next year type deal.

Hey, we can build you something.

We'll get you in by January or maybe by December.

Like, oh, well, no, sorry, I can't.

I'm going to go by resale because I have to be in by August.

And so I quickly realized like there's a supply demand imbalance here.

I'm not trying to take advantage of anybody or profit gouge, but like the amount of risk we're taking for the return we are getting is not equal.

And so I realized really quickly we had a lot more pricing power than we thought we did.

And so I remember going to that builder 20 club the next year and our top line actually grown year over year and our bottom line had shrunk.

And I just was like, oh my gosh, like what are we doing? And so I think that was a wake up call.

And that's when I was really able to get in.

And the reality is this is such a capital intensive business.

And this is such a risky business.

If you cannot manage that risk, And the only way to manage that risk is to continue to invest capital back in the company.

Well, if you're not making a healthy profit, there's no capital to reinvest.

And so to me, I didn't think we were making a healthy profit.

And so I did a number of things.

I remember one of the first things I did, Brandon, was I went in and said, hey, we're gonna have a sales contest.

And almost every, I think every sales executive we had, they had some back pocket money.

They had 1200 bucks or 1500 or 1% or whatever it was at the time, right? That they can give away, really no questions asked.